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How to minimize the financial damage of a divorce

A divorce will likely have a significant impact on your finances. However, there are steps that you can take to minimize the damage that the end of your marriage may have on your fiscal situation. Let’s take a look at some of the specific actions that you should take before filing divorce papers with an Illinois court.

Monitor your credit report

Keeping an eye on your credit report may alert you to any unauthorized activity that occurs before, during or after the divorce is finalized. You may also want to submit a fraud alert to each of the three major credit bureaus. The alert tells creditors to contact you before allowing any accounts to be opened in your name.

Place assets in a trust

Placing assets in a trust may shield them from being divided in a divorce settlement. However, it’s important to note that they need to be put in the trust before divorce proceedings begin. Otherwise, your spouse may be able to argue that you are willfully hiding assets in an effort to obtain a favorable outcome in the matter.

Purchase an insurance policy

If you own a business, it may be a good idea to purchase an insurance policy as soon as you know that a divorce is likely to occur. In fact, you should do so as soon as your company is open for business. An insurance policy may be able to cover the cost of buying out your spouse. A divorce attorney may be able to talk more about how taking this step may help protect what is likely your primary source of income.

In a divorce settlement, you may receive alimony, child support payments and other financial resources. Furthermore, you may be entitled to a large share of marital assets that may appreciate over time. This may help negate some of the cost of ending your marriage, which may make it easier to regain a sense of financial security after the divorce is finalized.

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