Some divorces are amicable. Other divorces are plagued by negative or abusive behaviours that increase stress and inflict emotional pain. Surviving a high conflict divorce requires a strong support team and smart legal strategies.
One of the ways you can protect yourself is by safeguarding assets and finances. Let’s talk about common financial mistakes in a high conflict divorce and tips to avoid them. For more information and customized legal advice, we welcome you to reach out to our British Columbia divorce attorney.
Common financial mistakes in a high conflict divorce
Divorce has significant financial consequences. These consequences tend to be amplified in high conflict cases, where one spouse uses finances to manipulate or hurt the other spouse or children of the marriage. Your spouse may hide assets or income, rack up debt, deplete assets, drain bank accounts, withhold support, or try to force the sale of your family home. Or, your spouse may dig in their heels and take unreasonable positions to drag out the divorce process and drive up legal fees.
The most common financial mistakes in high conflict divorces are failing to prepare, failing to think strategically, and failing to get legal advice as soon as possible. Read on for specific steps you can take to avoid these mistakes and protect your assets.
Tips for protecting yourself and your assets in a high conflict divorce
#1: Prepare a list of assets and debts
Write out a list identifying all family property and debt. Include all assets and debts, whether they’re in your sole name or in joint names with your spouse (or another family member, business partner, third party, etc.).
Make note of the assets and debts each of you brought into the marriage, including the value of the asset or debt at the time your relationship commenced. Next, make note of current assets and debts, including the balances and values of each. Lastly, make note of any assets or debts that have been acquired since your separation.
This inventory of assets and debts will help ensure nothing is overlooked, especially when things get stressful. Don’t worry if you aren’t sure of the exact values; a BC divorce attorney can help obtain valuations and other evidence to substantiate the value of assets and debt.
#2: Document everything
As soon as possible, gather copies of up-to-date property and financial records as well as documents relating to assets and debt you brought into the marriage. You should also secure copies of income tax returns for the last three years and statements for investment accounts, RRSPs, pensions, mortgages, lines of credit and other debt instruments, whether in your name or your joint names. Take photographs of important documents or of valuable assets in the home if needed.
These documents and records will be necessary to substantiate your property division claims. They will also be invaluable if your spouse attempts to hide or deplete assets or lies about a debt or piece of property.
#3. Separate your finances
If you have a joint account with your spouse, consider asking the bank to close it after you’ve divided funds in the account. If you keep joint accounts open, it may be prudent to ask the bank to put limits on cash withdrawals or to require both account holders to sign for withdrawals over a certain amount. Open a new bank account in your sole name so your money is not commingled with your spouse’s money going forward.
Consider cancelling joint credit cards, removing your spouse from your credit card account, or asking the credit card company to lower the credit limit to minimize risk. Also, consider opening credit cards in your sole name to establish or strengthen your credit.
#4. Get court orders in place if your spouse isn’t playing fair
Neither spouse is allowed to sell jointly held assets or property after separation without consent or a court order. Assets in one spouse’s name (other than the family home) can be sold, but that spouse will need to account for the sale proceeds or property derived from the sale of such assets in the divorce proceeding.
If your spouse isn’t playing by the rules, get legal advice from an experienced BC divorce attorney
right away. Your lawyer can start court proceedings and ask the court to make temporary orders to protect and preserve property. In addition, if all bank accounts are in your spouse's name, your lawyer can apply to the court for a financial restraining order to make sure your spouse doesn't take all the money out of the account.
#5. Don’t rush to settle
High conflict divorces are extremely challenging. It’s understandable to feel like you just want it to be over. But you should not rush into a settlement or make decisions when you are upset, anxious, or scared.
Instead, take the time to consult with a family lawyer. Your lawyer can explain your rights so you can make informed decisions. Your lawyer can help lay out the best strategy for your situation, so you know what to expect and the general timelines along the way. Your lawyer will also act as a boundary so you no longer have to interact directly with your former spouse. Communications from your ex go through your lawyer, which reduces conflict and gives you the time and space you need.
Advice and support from our BC family law firm
Going through a high conflict divorce is never easy. No matter what family law questions or financial issues you might be facing, our British Columbia divorce attorney is here to help. We welcome you to contact Valerie by email at valerie@family-law.ca or telephone at 604-526-3333.
Valerie M. Little Law Corporation is a British Columbia family law firm that is centrally located in New Westminster and serves the surrounding areas of Burnaby, Maple Ridge, Coquitlam, Port Coquitlam, Vancouver, North Vancouver, West Vancouver, Port Moody, Richmond, Surrey, Cloverdale, Delta, and Langley.
For more information about our British Columbia family law firm or to schedule a consultation with our British Columbia divorce attorney, please contact us today. Get the answers you need to move forward with your life.
Let’s talk today and take steps to safeguard your finances, your family, and your future.