Protect Your Money in a Divorce

Planning ahead and keeping your end goal front and center are key. But so is looking for hidden assets.

Written by Lisa Lombardi / June 1, 2022

Quick Bites

  • Divorce doesn’t necessarily have to be a financial hit if you plan how to go about it strategically.
  • Knowing your family’s finances can help you plan for life on your own.
  • Watch for signs of asset hiding, though there is usually a paper trail.
  • Before negotiating, ask yourself, “What’s my main goal?” But also ask, what does my soon-to-be-ex-spouse want? That will help you when you weigh what to give up to get what you want.
  • Don’t forget self-care—you don’t want to let your emotions hinder reaching your goal.

The past two years have been hard on many parts of our lives—including our marriages.

“Divorces have gone up in the pandemic,” says Olivia Summerhill, a Certified Financial Planner who specializes in divorce. “We see more couples fighting over money issues and communicating less about it—even when spending more time together.”

LegalTemplates reports a 34% increase in people initiating divorce in the first year of the pandemic. And that’s on top of the more than 630,000 couples in the U.S. calling it quits each year, according to the most recent CDC statistics.[1] Needless to say, there are a lot of families’ financial well-being at stake.

Staying financially healthy during this difficult time is an especially crucial issue for women: U.S. census statistics show women are more likely than men to end up in poverty in the year following a divorce.[2]

Still, while splitting up disrupts your finances, it doesn’t have to cause permanent trouble if you know how to protect yourself. Consider this insider advice from financial experts to safeguard your bottom line when separating and going through a divorce.

Inside this article

  1. Know what you’ve got
  2. Take tips with a grain of salt
  3. Get your ducks in a row
  4. Crunch numbers for the future
  5. Ask a slew of questions
  6. Stay alert for hidden assets
  7. Be flexible
  8. Watch out for common mistakes
  9. Focus on your own happy ending

First, know what you’ve got

Money-wise, that is. Even if you aren’t contemplating divorce, it’s essential to be completely up on your household finances, says Hirsch A. Serman, a financial coach, certified public accountant and host of the Financial Wellness Radio Show. Yet all too often, “only one person in the relationship is managing the finances, which means that one spouse is relatively ignorant of the financial situation,” he says.

If you have no idea where the accounts are or what your family’s yearly income or budget is, that’s the first place to start, says Summerhill. “Start by knowing where accounts are and getting copies of the past few years of your tax returns,” she says. Next, bone up on your monthly and yearly budget. “Get familiar with your spending patterns and how much you need to survive independently,” she advises.

Take money tips with a grain of salt

So your friend or co-worker who has been through the big D is sharing their financial and legal pointers? Think before you act on them. Every divorce is unique and it’s key that all the financial advice you’re getting is relevant to your exact situation, Serman says.

You’ll want to enlist a professional team (such as an attorney, financial planner and a therapist) as well as what Serman calls an emotional team (positive people who love you, support groups) to help you through the process.

Next, get your financial ducks in a row

To get a snapshot of your creditworthiness, check your credit score. You can get a snapshot for free through Chase, Experian or Equifax. Your next step? “Apply for your credit card and open a bank account in your name only,” Summerhill says.

Crunch numbers for the future

It’s critical to focus on what your life will look like after the divorce, Serman says. But often, people don’t do this because “they are going through an extremely challenging time and it is difficult to focus beyond what is happening today.”

However, when you drill down to what you will need financially in your new life, you have a clear target that will set you up for money success. Serman has his clients build what he calls a “divorce budget.”

Start with your essential spends only (home, transportation, food, etc.), then look at your discretionary spends (entertainment, gifts, streaming services, etc.). This lets you know the threshold of what you can’t go below.

All too often, people want the divorce to just be over and will push to settle without considering their own future best interests. “This can be devastating financially and leave someone destitute if they are not careful,” he warns.

Ask a slew of questions

Your divorce lawyer and financial advisor are there to help you navigate these tricky waters, and they’re also there to empower you to manage your money in your next stage of life. In other words, they want you to understand everything and get a full grasp on all aspects of your finances and legal affairs.

So be sure to speak up if something isn’t clear or you have another idea. You need to become an expert in your own situation, Summerhill says: “The more knowledge you have before getting divorced, the better off you are.”

Stay alert for hidden assets (but don’t stress about them)

Surprisingly, it happens across the wealth spectrum. “I work with billionaires and encounter hidden assets often, but this is a practice all socioeconomic levels can, unfortunately, see in divorce,” says Summerhill.

What are the signs to watch for? While some clues—like money being diverted from a paycheck to another account or passwords changed on joint accounts—are easy to spot, Serman says, some are harder (think extra taxes being withheld from the paycheck so there’s a refund after the divorce). The following are other red flags to have on your radar:

An upgraded lifestyle

Is your partner suddenly jetting to Fiji and Telluride, when before you took one modest trip to the Cape? Are they renovating a kitchen or sending the kids to private school? That might suggest there is a hidden stash of cash.

Suddenly, no yearly bonus

If your partner gets a bonus every single year but this year they didn’t get one, that could be fishy, Serman says. They may have asked for a deferred bonus or some other arrangement to hide those earnings from you.

Splashy new purchases

Are they tooling around in a new Tesla? Suddenly toting a Birkin bag? Red alert. “If someone is spending beyond their usual lifestyle, one of two things should be happening,” Serman explains. “Assets should be going down or debt should be going up. If it’s not, chances are they are hiding assets and not being forthcoming with their financial activities.”

The good news is if you have a diligent financial planner and divorce attorney, they will be on the lookout for shady practices. “It is not an enormous concern for most situations because many of the details that one spouse was trying to hide are on the tax return or have a paper trail,” Summerhill points out.

Be flexible … to help your own cause

What’s your most important goal? What is your ex shooting for?

“Know what you want at the end and focus on getting as much as you can by offering everything else through the negotiation,” Serman advises. In fact, when Serman asks clients what their priorities are, they generally know. But, he continues, “when I ask what their spouse wants, they usually have never even thought that was something to consider.”

Why think about what the other party wants? It tells you where you can have “easy wins,” he explains, where the difficult negotiations will be, and what to offer to get more of what you want.

Watch out for the two most common mistakes

There are two blunders that can really cost you and threaten your secure footing, according to Summerhill. The first one is assuming that a bulldog of a divorce attorney has your best interests at heart when they may just drain your funds and make the process more drawn out.

The second mistake? ”Valuing the house incorrectly or staying in a home that sets you up for financial failure in the future,” she says.

Focus on your own happy ending

“Emotions can be the most expensive part of your divorce,” cautions Serman. If you put your energy and focus into exacting revenge, you may not be negotiating in a way that helps you get what will actually set you up for a bright future. “This is an opportunity to re-create yourself,” he says. “Focus on your future and what will bring you joy.”

Also remember self-care, he adds: “You have had a lot of time spent working through a difficult (often toxic) experience. Fill the void with what will make you happy and create a beautiful and fulfilling life.”

Article Sources
  1. “Marriages and Divorces: Change in the Reporting of Marriage and Divorce Statistics,” CDC,
  2. “Number, Timing and Duration of Marriages and Divorces,” U.S Census Bureau, April 22, 2021,

About the Author

Lisa Lombardi

Lisa Lombardi

Lisa is a writer and editor who has worked at Quick & Simple, Health, Redbook, and more.

Full bio

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