With respect to stocks, bonds, mutual funds and other related cash assets, refrain from spending until after the divorce. If you suspect that your spouse may dissipate assets, write a letter to your broker, bank or financial institution immediately informing them of your impending divorce, and that you will not authorize withdrawals on any accounts without both signatures verified against the original signature cards at the institution. Once you’ve initiated the divorce, seek a court order freezing the assets in all of your accounts except for day-to-day living expenses. In some states, like Connecticut, these orders are automatic upon the filing of the divorce.
You are under the court’s microscope with respect to dissipating assets. If you need to use any of your savings to pay bills, make sure there is not a court order already in place prohibiting you from doing so. If there is, and you need to use some of the frozen monies, you must first obtain the Court’s permission. If you are permitted to use your assets to pay ordinary and necessary living expenses, keep records of how the money was spent, as well as a record of why the living expenses were ordinary and necessary. If the judge perceives you as dissipating assets, you may have a real problem at subsequent court proceedings or a trial. For a good article on dissipation of assets, see http://www.divorcedex.com/divorce/Dissipation-of-Assets-321.shtml.
Don’t plan on being tricky by closing accounts and then diverting the money to an untraceable account. All a judge needs to see is a bank statement with, say, $5000 two days before you filed divorce papers, and then a $5000 withdrawal two months after, with no disclosure concerning the whereabouts of the money, to determine that you’re a money-hider. If a judge believes you’ve hidden even a small amount of money, the next question will be “how credible are the rest of this person’s representations?”
Because you are under a microscope during your divorce, keeping a paper trail of how you spend your money is important. Keep a notebook in which you record all major financial transactions, including receipt or payment of child support, medical bills for the children, any savings that you utilize or any accounts that you cash out, bank statements, credit card statements, and so forth. You aren’t necessarily going to need these records, but if you do need them, you aren’t going to want to have to dig around the bottom of a shoe box or call MasterCard in order to find them. You can always throw the paper trail away later if you do not need it. Another terrific article on dissipated marital assets appears at http://www.womansdivorce.com/dissipated-marital-assets.html.
Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.
For more information contact Peace Talks www.peace-talks.com
(C) 2008 Peace Talks Mediation Services, Inc.
Related posts:
- How do We Use Our Assets for Mutual Benefit?
- Cash, Stocks and Other Assets in a Divorce
- Property: Equitable Division of States
- Community Property States
Tags: Creating Fair Settlements, Your Responsibilities, Your Rights
