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How to separate finances

When California residents get a divorce, they may only think about separating their physical belongings when they begin to divide their property. However, it is just as important to divide finances, especially as this may be more complicated.

People usually have to set up their own finances during a divorce. Finder.com says it is important for couples to close their joint accounts. Divorcing couples may want to go to the bank together so they both know where the money in the account is going and how much there is. Each spouse can typically receive half the money in the account. Before closing the account, it is a good idea to set up individual accounts for each spouse so they can transfer certain financial transactions to a different account without worrying about bounced checks.

As couples separate their finances, they typically need several records. According to Nerd Wallet, people should make sure they have copies of their tax returns, credit card statements and retirement account statements. It is also a good idea to compile a list of the debts and assets a couple has. This can help people understand which accounts they will need to separate and how much each spouse might get.

As they set up their own finances, it is a good idea for people to understand their expenses. People should generally look at their budget to see how much they spend on bills and food each month. This can help them estimate what their budget might look like when they are financially independent. Additionally, people may want to consider future expenses, such as replacing appliances and paying for college tuition. Some people may want to establish a new beneficiary for their life insurance once they begin divorce proceedings. However, it is a good idea to wait before making large changes like this. Divorce brings many financial changes, and people should typically adjust to their new situation before they make more changes. 

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