Tag Archive for: asset division

First Steps in Dividing Assets in Your PA Divorce

Dividing assets in a divorce is often one of the more stressful steps of the process. Pennsylvania follows an equitable distribution policy, meaning the courts attempt to divide a divorcing couple’s assets fairly between them. This is often easier said than done. 

Following these initial steps can help you begin to separate property from your spouse and start moving forward financially. 

Pinpoint the Date of Separation 

What day did you and your spouse separate and/or begin the divorce process? Write down this date. This will help you determine which assets and debts are considered community property or marital assets and which are separate. 

The assets you acquire after the date of separation could be considered separate property. This date is also important in determining the length of the marriage and the start date for spousal support or child support, if applicable. 

Close All Joint Bank Accounts and Open Your Own

Begin by opening your own separate bank account and start putting your paychecks and other income into it. This will allow you to begin accruing your own money that is completely separate from your spouse. Furthermore, you won’t have to worry about accidentally stealing from their share of the funds when you begin paying legal fees or other associated expenses from the divorce. 

Eventually, you will want to close any joint bank accounts that you share with your spouse. However, in the beginning, you may want to keep a joint account open from which you can pay household and other shared bills until you decide who will be responsible for paying which bills.

Close All Credit Cards and Examine Your Debt

Next, contact your credit card companies and close any shared accounts as well. Open your own credit cards that are solely in your name. 

If any of your shared credit cards are in the red, talk to your attorney about how to proceed. Along with dividing assets in a divorce, you must divide shared debts fairly. 

Hold On to Pensions and Brokerage Accounts for Now

You may assume that the next step should be to divide pensions or brokerage accounts between you. Instead, hold off on this until you have spoken with your attorney. You may need a qualified domestic relations order (QDRO) to gain permission to divide the accounts between you. 

Talk to Your Mortgage Broker About Keeping the House 

You may also assume that you will keep the house and that your spouse will find somewhere else to live. While this might be your preference, it isn’t always doable. You should speak with your mortgage broker about the requirements to maintain the mortgage on your own. 

If you cannot afford the mortgage based on your finances, you may need to sell the house as part of the property division agreement. Alternatively, perhaps you could sacrifice other assets to keep the house. 

Let Karen Ann Ulmer, P.C., Assist in Your Asset Division 

Dividing assets in a divorce may feel overwhelming, but our attorneys are here to guide you through this process. We can help with asset valuation and maintain your right to equitable distribution. Contact Karen Ann Ulmer, P.C., today at (866) 349-4149 to book a confidential consultation.

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Money Issues – Before, During, and After Divorce

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Money is one of the most common causes of divorce. Some studies show it as the number one cause. When a couple has different values regarding money, or when one or both partners make poor choices with their money, serious marital stress results, and this stress can flow into the divorce process and continue to be a problem after divorce.

Before divorce

Not surprisingly, most couples who divorce over money issues do not keep a budget. When there is no clear understanding of how much money is coming in and where it is going, there will be more disagreements. Overspending and credit card debt are major issues in divorce, often because one spouse spends more than the other. This is because the partners have different views about money.

This often leads to “financial infidelity” – keeping secrets from the other partner about how money was spent or on what, which naturally causes arguments and resentment when the secrets are discovered.

Financial infidelity is much more common when couples keep separate finances. Couples who keep joint finances are less likely to divorce over money and are also less likely to experience financial cheating. Couples with separate finances often know little about each other’s financial choices, often not even knowing their partner’s salary.

Spouses might keep separate accounts so they can have control over their “own” money. If they have different views about the use of money, a spouse might keep a separate account just to keep the other partner from “wasting” his or her “own” money. The problem with this view is that in marriage and in divorce, money is communal. It affects the whole household and is meant to support the whole household. Thus, hiding financial information from a spouse can cause serious distrust and strain on the relationship.

During divorce

If you fought about money while you were married, this will certainly spill into the divorce. That is why it is so important to have a divorce lawyer act as an experienced third party who can help you navigate the difficult waters of divorce.

During a divorce, you will be dividing your property and assets as well as your debts. The first thing to do is to cancel all joint credit card accounts and open separate ones. The debt on those closed accounts will become part of the divorce process, but by canceling joint accounts you can avoid any future debt that your spouse incurs being applied to you.

If financial infidelity has happened during marriage, expect that it will continue. Sometimes a spouse tries to spend money in order to draw down the joint assets (this is called dissipation). An experienced divorce lawyer will be able to recognize this. You may also need to contract the services of a forensic accountant who is an expert in going through finances and finding fraud or hidden money. Your lawyer should be able to recommend someone.

Tax changes, pension and retirement plan issues, life insurance, and costs of ongoing child support will all be important issues to discuss with your lawyer.

After divorce

If you did not do it during the divorce, as soon as possible afterward change your beneficiary information. Also make sure you close other joint accounts, like iTunes, streaming services, frequent flyers, etc. This article lists some other common steps to take.

If your money habits and attitudes contributed to the divorce, you may need to examine them. Recognize any bad habits in the use of money that need to change, and create a budget. Refrain from major purchases for some time after divorce. This gives you time to judge the situation and make decisions that are not emotionally charged. This also includes avoiding spending sprees.

When money issues fuel a divorce, it is important to obtain expert guidance so you avoid making decisions that will negatively impact you and your children in the future. Talk to one of our experts to see what we can do to help you through your divorce.

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