Nolo's Essential Guide to Divorce - Emily Doskow [21]
When you file for divorce, the court automatically issues an order that restricts both you and your spouse from taking or transferring any of your jointly owned property. You must leave your joint savings, checking, and investment accounts and everything else as they are unless you and your spouse agree to use them. It's best to agree on how you'll use joint money and stick to those agreements. It's perfectly fine, if you've always used a joint checking account to pay household expenses, to keep doing that.
If you and your spouse agree that one of you can take some of the jointly owned property, make sure you write down the agreement. And whether you take your share on your own say-so before filing, or according to agreements you made with your spouse at any point, you'll need to account for all of it later when you and your spouse formally divide up your property. If the court later decides you took more than your share, you'll have to pay it back somehow-either by trading some other asset for it or by paying cash.
Just because the law and the court papers say you can't transfer money after court papers are filed doesn't mean people don't try. If you think your spouse might try to transfer co-owned property after you've filed, immediately notify your bank and brokerage house that you are in the process of a divorce and that they should not allow withdrawals or transfers without the written consent of both spouses. Send a letter advising the financial institution that it must honor the court orders that are an automatic part of your divorce. Enclose a copy of the form that contains the restraining orders, and something that shows your case number and the date you filed for divorce.
You might want to do the same with the plan administrator for your spouse's retirement plan, and don't forget about any equity line of credit you have. And if you or your spouse uses the Internet to make investment transactions, immediately send an email to the trading firm advising them that a divorce action has been filed and that no further transactions should be made on the account without both spouses' authorization.
Protecting Your Financial Privacy
Your financial information is now your own-make sure it stays that way. If you and your spouse are still living together, it's prudent for you to get a post office box where you can receive personal and business mail. And if you have a shared family computer, don't use it for divorce-related email correspondence or document preparation. Even after you delete something, a skilled computer user can retrieve it.
Decide How to File Your Tax Returns
Depending on when in the year you separate, you may have to deal with the issue of tax filing quite early in your divorce process. You can file jointly for any tax year in which your divorce was pending, but not for the tax year in which it became final. You are considered to have been divorced for the entire year in which your divorce becomes final. So if you separate in July, and get a final decree of divorce the next May, you can file jointly for the separation year but not for the following year.
If you have a preference for filing one way or the other, you can also time your divorce (consistent with the court's timing, of course) so that you make the divorce effective before or after the tax year ends.
In many situations, joint tax filing for married couples is advantageous-for one thing, you can take the child care credit only if you're filing a joint return. But it's not always the best option, so be sure you have your tax professional calculate the tax liability in a variety of ways to see what will work best. Sometimes, one spouse will balk at the idea of filing jointly, either on general principle or because of fear of being liable for the taxes or penalties related to that return. You can't force your spouse to file jointly, but you can always ask.
Divorcing spouses in community property states should consult a tax professional before making filing decisions. These states treat income earned from separate property (for example, dividend