When a marriage or civil partnership comes to an end, it can be a messy business. When emotions run high, people can stoop to any level to express their anger or sadness, and all too often, they take aim at their ex’s finances. It is best to protect your assets as soon as possible during the divorce proceedings as in some cases, ex-spouses will take steps to hide money, give trusts to another beneficiary temporarily, or move accounts out of the country. For most couples, the main asset is the home. The way you protect it will vary depending on the type of mortgage ownership involved. Here we outline the key steps to take to protect your financial assets during a divorce.
How to Protect Your Home
When you are joint tenants, neither party can sell the home without the other’s permission and any profit from the sale would be split equally between you. Should you die, full ownership would pass to your ex. Some people change their mortgage arrangement to tenants in common prior to the completion of divorce to prevent this from happening.
If the mortgage is set up as tenants in common, you will have already decided how much of the property each of you owns, which means you can do what you want with your share.
If the home is only in your ex’s name, it may be worth registering an interest in the property so you would be informed of any sale and a court would take you into account during a settlement. If you can show evidence that you paid mortgage payments or bills and that you have dependent children, you may have a right to live in the home.
Who is Liable for Home Payments?
If you are a homeowner, whoever is named on the mortgage is liable — which means you should both continue to make payments — but contact the lender to discuss your options now that you have separated. Missing payments could have severe consequences for your credit in the future.
If you are renting via a joint tenancy agreement, you should tell your landlord what has happened. Anyone named on the tenancy has the right to live there, but you can ask the landlord to amend the contract so it is only in one of your names. You will be liable for the rent for a fixed term tenancy even if you are not living there. However, if you are not named on the tenancy, your ex can ask you to leave.
Savings, Trusts, Valuables, Stocks and Shares
If you have other financial assets such as savings or valuables, stocks, shares or trusts, you will need to consider how you will divide or protect them during the divorce. For example, savings accounts and valuable possessions such as antiques may be divided to an extent, but there may be contested issues. However, some savings accounts may not touched without incurring a penalty. For advice on handling trusts in a divorce, you should contact an experienced solicitor or financial adviser who can help you to protect these complex assets. If you have shares or other investments, they will need to be valued. If you intend to transfer them to your ex, you may need to pay tax or charges.
Bank Accounts, Credit Cards and Loans
You may want to prevent your ex from being able to withdraw money from a joint account. It is sensible to contact the bank to request that both parties must provide consent from now on before withdrawals are made. You can continue to pay enough money into the account to cover mortgage or rental payments and bills and set up a separate account for yourself. Another option is to freeze the account temporarily to prevent your ex from taking money.
You will both be liable for any credit cards or loans which are in both of your names, so at least one of you must continue to make the repayments. If you are concerned that your ex may spend money on a credit card which is in your name, you can get them blocked.