Why should you establish accounts in your name during divorce?

Divorce can be one of the most challenging periods in a person’s life. It inspires a host of emotional, legal and financial complexities. In Minnesota, as in many other jurisdictions, the division of assets plays a critical role in the divorce process.

If your marriage is ending, know that one important task you must complete before your divorce is finalized involves establishing personal financial accounts

Financial independence and clarity

Establishing your own financial accounts is a crucial step towards achieving financial independence post-divorce. It allows you complete control over your income, savings and expenditures, without the complications of joint account management.

This independence is empowering and provides a clear picture of your financial situation, which is essential for making informed decisions during and after the divorce proceedings. Having separate accounts simplifies separating assets and can prevent potential disputes over transactions completed during the divorce process.

Protecting your financial future

Opening your financial accounts also plays a pivotal role in protecting your financial future. Joint accounts allow both parties access, which can lead to mismanagement or misuse of funds during the emotionally charged divorce process. By establishing accounts in your name, you safeguard your assets from unauthorized use and ensure your financial future is yours.

This step is also crucial for establishing credit in your name, mainly if most of the couple’s previous financial activities were undertaken jointly. A personal credit history is essential for future financial transactions, such as applying for loans, credit cards or purchasing property.

Emotional well-being

Establishing financial independence through your accounts can significantly contribute to your emotional well-being. Divorce is inherently stressful, and intertwined finances can add a layer of complexity and tension. Having separate accounts provides a sense of security and control during uncertainty, which allows you to focus on your emotional recovery and the next chapters of your life.

While you’re setting up your own accounts, you can put together a financial snapshot that lets you know where your finances stand. This can be helpful during the property division process so you can find out exactly which assets to prioritize, which you may not be in a position to maintain, etc. This can lead to a more informed financial future more broadly.