Most married couples share at least some financial accounts or responsibilities, such as joint credit cards, mortgages, retirement accounts, or savings. And when divorce happens, these obligations don’t automatically disappear.
The mortgage payment still needs to come from somewhere next month. There’s still debt on a joint credit card that needs paid. And there are several bank accounts accessible to both of you, and you’re not sure how their funds should be handled.
This leads to some pressing questions: Who pays what? Should you move money to protect it, or could that look like hiding assets? How should everything be divided?
Understanding your options can help you approach each decision with confidence rather than confusion.
How joint finances are addressed during divorce
In some divorces, couples can reach a mutual agreement on how to handle their shared finances. In other situations—for example, if there is a high-conflict dynamic in the relationship or the divorcing couple is dealing with complex financial issues—court orders can be helpful tools for creating structure and accountability. This is particularly important if you’ve experienced financial abuse or when an ex has controlled finances without offering transparency in return.
Managing finances through an agreement
When you and your spouse can work cooperatively, you have the flexibility to make financial decisions based on what makes practical sense for your family. Each family is unique, but you might make decisions on issues like how to:
- Divide ongoing costs like mortgage or rent, utility bills, insurance, and shared living expenses
- Manage any shared debt, including credit cards, car loans, and student loans
- Share the costs of daycare, babysitters, after-school care, and extracurricular activities
- Handle contributions to any shared savings or investment accounts
Working through these decisions collaboratively can pose challenges—divorce and financial matters are inherently stressful, after all—but a supportive, future-focused attorney can be a valuable asset in this process. They can help you identify your short- and long-term financial goals and come up with effective strategies to negotiate with your soon-to-be ex.
When court orders provide structure
Sometimes formal guidelines become necessary. This isn’t necessarily because anyone did anything wrong, but because structure helps when parties have a difficult history with one another or if there has been financial conflict between them. In these situations, the court can step in and help address financial concerns by establishing orders that:
- Set guidelines for managing joint accounts during the divorce process
- Assign specific payment responsibilities (mortgage, insurance, children’s expenses)
- Restrict major financial decisions until the divorce is finalized
- Provide temporary financial support when needed
Whether you come to a mutual agreement with your former spouse or need court support, though, the goal is ultimately the same: maintaining financial stability for both parties while working toward a resolution.
Four steps to protecting your financial future during divorce
Coming to a resolution on financial issues can take time. Working through the court system can be a lengthy process, and even mediation or negotiation doesn’t resolve issues overnight. These four steps can help you protect your finances during this time of decisions and transition.
Note: If you’ve experienced financial abuse or haven’t had access to financial information during your marriage, these steps may look different for you. Your attorney can help you obtain financial documentation through discovery tools like interrogatories and subpoenas, and can request temporary support through a pendente lite order to help you maintain stability while building a clearer financial picture.
1. Keep detailed financial records
Our financial lives can be complex and often include numerous hidden costs. However, with thorough financial documentation, you can ensure that all important information is accounted for in conversations.
Your financial records should include costs like:
- Essential monthly expenses
- Housing costs (mortgage or rent payments, utilities, property taxes, homeowners or renters insurance, routine maintenance, and seasonal repair costs)
- Transportation expenses (car payments, insurance premiums, gas, routine maintenance, registration fees, and parking costs)
- Insurance premiums (health, life, disability, and any additional coverage you carry)
- Family and children’s expenses
- Children’s needs (childcare, school expenses, extracurricular activities, healthcare costs, and clothing)
- Healthcare expenses (medical visits, prescription costs, dental care, vision care, and any ongoing treatments)
- Daily living costs (groceries, household supplies, personal care items, and regular subscriptions)
- Financial obligations and savings
- Debt payments (credit cards, student loans, personal loans, and minimum payment requirements)
- Retirement contributions (401(k), IRA, or pension contributions you’re currently making)
- Savings patterns (emergency fund contributions, college savings, or other regular savings habits)
Track family expenses across all accounts and look out for infrequent charges or costs that may occur quarterly or semi-annually (e.g., taxes, professional memberships, summer camps for your children). The goal isn’t to catch your spouse doing anything wrong, but rather to gain a better understanding of your finances for both settlement discussions and planning your post-divorce budget.
2. Maintain ongoing financial obligations
During a divorce, it can seem like life is at a standstill. But while that is a very normal emotional response, it’s important to stay on top of financial obligations.
Credit card payments, insurance premiums, and mortgage obligations (among other things) need consistent attention, and accidentally skipping a payment can complicate your settlement and post-divorce financial life. Missed payments can complicate your settlement in several ways:
- Damage to both parties’ credit scores, which directly affects your ability to qualify for post-divorce loans, mortgages, or rental applications
- Late payment fees and increased interest rates that create additional debt requiring division
- Additional debt that must be allocated during property division, potentially reducing your share of other assets
- Evidence that can be used to argue financial irresponsibility, which may influence decisions about asset division or support arrangements
If maintaining payments during this transition is difficult, consider talking with your attorney about establishing payment responsibilities with a pendente lite order. This temporary court order outlines who pays what during the divorce process. (Note that this doesn’t mean you need additional court orders; this type of order simply acts as a bridge to further decisions.)
3. Avoid large financial moves
Divorce brings many necessary costs, including moving expenses, security deposits, furnishing a new home, establishing separate insurance policies, and setting up utilities.
These are expected transitions that courts understand. However, other large purchases can raise red flags during settlement negotiations:
- Luxury items like jewelry, art, or high-end electronics that exceed your usual spending patterns
- Expensive vacations or entertainment that appear frivolous during financial disclosure
- New vehicles, boats, or recreational equipment when your current ones are functional
- Major home renovations or improvements to property that’s being divided
- Large cash withdrawals or transfers without clear documentation of where the money went
- Business investments or startup costs that weren’t previously discussed
These purchases may be viewed as red flags because they could appear to be an attempt to hide assets or reduce marital funds. Opposing counsel might also question whether you’re experiencing financial hardship if you’re also making large discretionary purchases at the same time.
4. Be mindful of how you treat long-term retirement assets
Long-term assets—such as 401(k)s, IRAs, or savings accounts—can represent some of your most substantial marital assets. It follows, then, that they also raise a number of questions and decisions.
If you’re still working, you might be wondering whether to continue contributing to your retirement accounts or if those contributions will complicate your settlement. Should you change your beneficiaries immediately, or wait until the divorce is finalized? If you have loans out against a retirement account, who is responsible for them? If you’re not working, you may be wondering how the divorce will impact the distribution of funds and benefits.
Comprehensive financial documentation is especially important in helping answer these questions. This information helps your attorney understand the full scope of what needs to be addressed and head off potential complications.
An experienced attorney can also help you navigate the specific rules for different types of retirement accounts. Some require special court orders to divide properly, while others can be transferred through different processes. If you’re facing financial pressure, they may also be able to help you pursue temporary support arrangements or structured payment plans.
A knowledgeable NJ divorce attorney can help safeguard your assets
Every divorce presents unique circumstances, and obtaining guidance tailored to your specific accounts and circumstances can help protect both your immediate finances and long-term security. Yet understanding your options—whether through court orders or independent decision-making—can help provide a clear framework for approaching each financial choice.
Contact our team to coordinate your strategy planning session.
