Wisconsin spouses create many joint financial and legal arrangements during marriage, so if that marriage should dissolve, it does not mean that all joint financial arrangements are automatically dissolved as well. In fact, it is very possible for ex-spouses to still share joint accounts or have financial agreements that name each other as beneficiaries after a divorce. These arrangements can cause significant problems if they are not dealt with.
CNBC.com points out that jointly owned credit cards are one potential problem. If both spouses remain on a credit card, a former spouse can rack up big expenses on the card and leave the other spouse with the bill. Paying off the debt can put a drain on the other spouse’s finances and if the debt is large, may also impact the spouse’s credit score. Some credit card companies can remove an authorized user, so it may be possible to reduce credit card usage to just one spouse. If not, it may be better to close the card out altogether.
Bank accounts can be another problem. Spouses should separate their bank accounts as early as possible going into a divorce. If one spouse keeps money in an account that is still jointly used by the other spouse, that money could be gone in an instant if the other spouse decides to empty out the account.
Married couples also share medical insurance policies. If spouses divorce, they should see to it that their health insurance does not name each other as liable for each other’s medical expenses. If not, a person could wake up one day and find a hefty bill in their mailbox for a medical procedure undertaken by an ex-spouse.
Divorcing spouses should also decouple from each other when it comes to property ownership. Ex-spouses may still be responsible for paying off a mortgage if the terms are not changed after a divorce. One party may decide to act out of spite and stop making payments to damage the other party’s finances or to force that person to give up interest in a piece of real estate.
Power of attorney arrangements are another problem to watch for. Married couples will sometimes name each other to act as a power of attorney in case the other party is incapacitated. However, some divorcing couples do not change this arrangement. Fortunately, according to the Wisconsin Department of Health Services, Wisconsin law annuls these arrangements in the case of a divorce. Still, spouses may waive state law and retain each other as a power of attorney even after a divorce if they spell it out in the agreement.