New Year Tends to Ring in More Divorce Filings
More likely than not, January 2012 will ring in an increase in divorce filings. More divorce cases are filed in January than any other month, possibly because people want a fresh start after New Year’s Eve or because they want to avoid disrupting their families during the holidays, according to Psychology Today. Whether or not this phenomenon continues in the new year, divorcing spouses can protect their personal and financial interests by planning ahead.
To-Do List for Those Contemplating Divorce
Thinking ahead and anticipating the legal consequences of divorce, as well as the impact it will probably have on both spouses’ finances, can make the transition from married to single life smoother. According to Forbes, those contemplating divorce should complete such tasks as:
- Collecting financial documents
- Checking credit reports
- Researching divorce professionals
- Opening separate bank and credit card accounts
- Considering whether to file a separate tax return
Examples of financial documents are bank, credit card and brokerage account statements, as well as mortgage loan paperwork. This information is necessary for the property distribution that will take place either through settlement or the court’s divorce judgment and decree. Each spouse should keep their own copies of all of these documents.
Credit reports can give an indication of any unusual credit card activity by a spouse, according to Forbes. If the credit cards are in both spouses’ names, either spouse can be financially responsible for the transactions of the other. For this reason, spouses contemplating divorce should open new bank and credit card accounts that will be kept separate from their joint accounts.
A Shield from Liability
Finally, spouses have the option of filing their tax returns separately, which might make more sense from a legal standpoint than a financial one. Married couples can file jointly and often do so in order to save money on taxes. By filing separately, however, a spouse can avoid liability if the other spouse takes improper deductions or underreports income, according to Reuters Money. Otherwise, the innocent spouse must meet stringent IRS requirements to show they were unaware of these actions.
Spouses going through the divorce process and those contemplating it should consult with an experienced divorce attorney who will protect their rights by helping them plan for the likely legal and financial consequences of divorce.