It’s sounds drastic: Sever all of your financial ties in the divorce.

After all, you were married to this person, you have kids together. And keeping some kind of connection doesn’t seem risky…but it is.

No matter how good your relationship is, no matter how well you communicate, you can’t predict the future. Except for this: Things will change.

Keeping even a small financial connection – like a joint emergency credit card or an old joint savings account – could end up doing significant damage to your financial future. And so many things could happen with your ex:

  • Health issues
  • Job loss
  • Disability
  • Loan defaults
  • Business bankruptcy
  • Personal bankruptcy
  • Death

If your finances aren’t completely separate, any one of those things could leave you on the hook, and put your – and your kids’ – financial future in jeopardy.

That’s why it’s crucial to make a clean financial break NOW.

Take these 8 steps to completely separate your finances:

  1. Cancel every joint credit card
  2. Close every joint bank account
  3. Refinance every loan into just one of your names
  4. Retitle major assets (your car, your house) to single owner
  5. Get new lease agreements (for a car or apartment) and remove one of your names
  6. Remove your (or your ex’s) name from any bills that are in both your names
  7. Cancel old insurance policies or have them moved into only one of your names
  8. Change the beneficiaries on insurance, retirement accounts, investment accounts, and bank accounts

To make sure you don’t overlook anything, get credit reports for both of you. If you have joint credit cards with open balances that can’t be canceled, freeze them (so no new charges can be made).

By taking these steps, you’re solving problems before they arise, and neatly sidestepping any negative fallout that could shatter your financial future.