In my work, Cecilia’s story is not an isolated incident. Inevitably, as I unwind each woman’s story, I find that financial infidelity often accompanies sexual infidelity. And virtually every woman is stunned to discover this. Don’t let this happen to you. Take the following steps now to protect yourself and your children, and do not be naïve. Your husband may have pledged to look out for your best interests financially and otherwise during your marriage, but when your marriage is in trouble, it is up to you to arm yourself with money and information so that you have an edge. These are the first steps to take control of your future.
DIVORCE HACKS
You will need funds to retain a lawyer and support yourself for several months until you can either negotiate support or obtain a court order. Take these steps to set aside the financial resources you need.
OPEN A BANK ACCOUNT IN YOUR NAME
Open this account at a different bank than the one where you and your husband share a joint account.
SET ASIDE MONEY FOR LIVING EXPENSES AND TO HIRE AN ATTORNEY
Did you know that you can take half the money out of your joint account and put it in a separate account in your own name if you live in one of the nine community-property states like California? You may not want to take out half the money all at once because it will alert your spouse to your intentions, and it may cause checks to bounce. At first, take out smaller amounts and put them in your new account, so that when the time comes, you can hire an attorney and cover your living costs for several months.
INSIDER TIP
In community-property states, assets earned and acquired during the marriage are split 50/50. There are nine community-property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
SECURE YOUR ASSETS
During a divorce, I’ve seen valuable wine collections disappear, coin collections go missing, and money evaporate. Do not be surprised when your husband tells the judge that he has no idea what happened to the silver coins your grandfather left you — and the judge shrugs and moves on. Take steps now to protect what is yours; remove or hide valuable items. It is much easier to return items you have removed in order to protect them than it is to locate items someone else has spirited away.
INSIDER TIP
Most states follow equitable distribution laws. In these states, property will be divided between the spouses in a fair and equitable manner. There is no set rule in determining who receives what or how much. The court considers a variety of factors. For example, the court may look at the relative earning contributions of the spouses, the value of one spouse staying at home or raising the children, and the earning potential of each. A spouse can receive between one-third and two-thirds of the marital property.
CHECK YOUR CREDIT SCORE
You need to build your own credit. Few numbers in life matter as much to your financial outlook and well-being as your credit score (known as the FICO score). A good credit score is crucial for financial success. It is one factor used by lenders to determine your creditworthiness for a mortgage, loan, or credit card. Your score can affect whether you are approved for credit and the interest rate you are charged. Prospective employers often check your credit score when you interview for a job. It is important to know what your credit score is and to improve it if it’s not in the “good” range.
The three major credit-reporting agencies are Equifax, Experian, and TransUnion. You need to check your score with each agency because your score may differ between them. This is because some lenders report to all three credit agencies, but others do not. Since your credit report can contain errors that adversely affect your score, you need to check all three to make certain that they are accurately reporting. Further, in 2017, Equifax suffered a major data breach, so if you have a credit report with them, check out the Federal Trade Commission’s website for what to do.
You can easily access your score online for free and track your credit-building progress on sites such as CreditKarma.com or AnnualCreditReport.com. A “good” credit score is generally considered to be 720 or higher. Lenders, however, have different standards for what they consider to be a good credit score, and so it is important to keep building your score to receive the most favorable interest rates and the highest rates of credit approval. Later, I’ll provide concrete tips for building your credit. For now, simply take the first step to find out what your credit score is.
OPEN TWO CREDIT CARDS IN YOUR OWN NAME
You need to be the primary cardholder on at least two credit cards, if possible. You can have a wallet full of credit cards, but if your husband is the primary cardholder and you are the secondary, he can cancel those cards without your permission. So get at least two cards in your name now, while you can use your combined credit score to get approved. Once you are divorced, it may be harder to get credit in your own name if you don’t have substantial income of your own.
When you meet with your attorney, he or she will ask for your financial documents. Save yourself time and money by collecting these documents now.
GATHER AND COPY ALL FINANCIAL DOCUMENTS, EVEN THOSE IN YOUR SPOUSE’S NAME
Copy anything with a dollar sign attached to it, such as bank accounts, investments, and retirement plans. Many women tell me their husband insists he is going to keep “his” 401K or pension. Wrong. If you live in a community-property state, half of any pension or retirement fund earned by your husband during the marriage is yours. If you live in an equitable property state, you are entitled to your fair share of his 401K or pension. Here is a checklist of documents your lawyer will want when you meet:
• Employment information: Paycheck stubs for you and your spouse for the last twelve months (or at least the last three months to the current date).
• Tax returns: Include the last three years of state and federal income tax returns.
• Pension and retirement programs: Copies of 401Ks, investment programs, stock, stock options, and bonds provided through the employer for you and/or your spouse.
• Insurance: Documents regarding insurance provided through the employer for you and/or your spouse.
• Real property: Deeds showing the legal description of any real property owned individually or jointly with your spouse, escrow papers from the time of purchase, current mortgage statements, current real property tax statements, homeowners or fire insurance policies on all real properties, and tax assessor’s statements.
• Stock portfolio: List of corporate stocks and/or stock certificates owned by you and your spouse, individually