Separating Finances When You Are Separating

by Guest Contributer

The following is a guest post by Angie Picardo is a staff writer for NerdWallet, a personal finance website dedicated to helping consumers. If you would like to write an article for Money Q&A, please visit our Guest Posting Guidelines page.

People getting a divorceToday, it is almost rare to know people who’ve never been divorced. However, just because we are more familiar with divorce does not mean we are well equipped to handle divorce finances. How can those separating separate finances in a healthy, respectful, and responsible way? Here are some key steps to consider.

First of all, keeping emotions from influencing financial decisions is an important first step. Of course, while this may sound like a “duh,” many people know what can happen in the heat of the moment. Think of your future, and if you have children, your children’s future.

Next, begin researching all of the personal and joint financial information you have and can obtain. It is vital to be aware of your situation and not be naive; when things don’t look right, do more research and get answers. Try to be as objective as possible about your financial situation. This will only benefit you later when you need to make decisions, noted above.

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You may decide to keep your joint account if you have children. However, to split a joint account, you will need to call the bank and ask them to close it, with or without your spouse’s consent. Divide the money in half between you and your spouse; if things go awry, you can always give the money back.

To divide assets, you will most likely need to hire a divorce financial planner to help you, as dividing assets is complicated and usually rife with emotion. There are two types of property: separate and marital. Separate property ranges from any property owned before the marriage as well as gifts received prior to the marriage from a third party. However, separate property becomes marital property when a spouse is involved, such as remodeling your separately-owned properties and adding your spouse as a co-owner. All other property acquired during marriage is marital property—all of it. How marital property gets divided legally depends on what state you reside in. Nine states are Community Property States, considering each spouse an equal owner with a 50-50 split: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. All other states are Equitable Distribution States, and dividing assets depend on a variety of factors, including and definitely not limited to: length of marriage; financial situation of each spouse; and standard of living established during marriage. The goal here is to have a fair split, which may or not be 50-50.

Last but not least, an important point to consider in separating finances is debt. Debt is handled similarly to assets. If you live in a Community Property State, then debt is split down the middle for both of you to pay, even if it was only your spouse who acquired debt in his or her name during the marriage. Nevertheless, get your name off the debt your spouse will keep. This will help your credit score and make repayment between the both of you clearer. In Equitable Distribution States, the same rule of thumb applies as with assets.

Phew! Sounds like a lot to deal with? You bet it is. Hiring a financial divorce planner is a good idea, even if the divorce is mutual and as pleasant as one can be. With a professional and objective third party, you’ll have less legal fees and a smoother divorce. Hiring an attorney will be needed when things aren’t so rosy.  is a good online resource to learn more about divorce and the state you reside in, too.

It is no easy financial task getting divorced. Heck, is any financial task easy, besides spending money? With proper planning, preparation, and open communication, separating finances while separating will not only ease any bumps along the road, but support you in a healthy financial future, too, for you and your ex. 

Angie Picardo is a staff writer for NerdWallet, a personal finance website dedicated to helping consumers find the best credit cards.

About Guest Contributer

This article was written by a guest author. For more information about this author, please see the bio information listed in the article. If you would like to write an article for Money Q&A, please visit our Guest Posting Guidelines page.

Guest Contributer has written 125 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.

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{ 24 comments… read them below or add one }

Elizabeth @ Simple Finance

What ironic timing; my husband’s best friend was just over for dinner, and he was talking about his impending divorce and what a tough time he and his soon-to-be ex are divvying assets – and he’s a lawyer, to boot! I’m going to forward him your post, I think it could help him.
Elizabeth @ Simple Finance recently posted..Which Insurance Policy is Best for You?My Profile


Hank Coleman

Argh! That’s not very comforting that he is struggling with it too. I guess it goes to show you that we all need help no matter our profession or specialty.
Hank Coleman recently posted..Infographic: Money Questions We All AskMy Profile


Sarah Park

This is just one of the aspects to deal with when taking a divorce and its quite a lot of work already. Hiring a financial divorce planner is really a great idea.
Sarah Park recently posted..5 Ways to Get Rid of Losers in Your LifeMy Profile


Hank Coleman

I have come to realize that there is a great benefit to hiring people to help you. I’ve been putting off for years to try and hire professionals to help me such as a CPA, book keeper, etc. But, after I start to make mistakes, then I quickly realized that I need help and the money spent on them is well worth it.
Hank Coleman recently posted..Infographic: Money Questions We All AskMy Profile



Going through the process of divorce can be really draining. Dividing your assets and liabilities would certainly require help from divorce experts. I just hope my marriage would last so that I would not have to go through this painful process.


Tie the Money Knot

Many people are ill-prepared for such situations, and sadly don’t have a clue about the rules until they’re in the situation already. With the divorce rate what it is, it would be beneficial to know the rules behind distribution of assets.
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Separating Finances When You Are Separating


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