Going through a divorce takes an emotional and financial toll on both people involved. Wading through the legal issues of separating your finances at the same time that you are separating a life together adds stress to an already painful time. With big changes to your budget, living expenses, and future financial planning ahead, it’s best to begin preparing before you file the paperwork. It helps to know these 10 important ways to prepare your finances for divorce.
Find Financial Documents
Once you know that a divorce is inevitable, gather any paperwork or electronic files that help to paint an overall financial picture. Look for documents such as the following:
- Bank statements,
- Recent pay stubs,
- Tax returns,
- Investment statements,
- Retirement accounts and plans,
- Social Security statements.
You’ll need all of these documents during the legal proceedings ahead. An attorney can help you gain a court order if your spouse tries to prevent you from gathering financial information.
Open a P.O. Box
Before you begin communicating with attorneys and filing paperwork, open a P.O. box for all of your divorce-related correspondence. This ensures your privacy and the security of important documents.
Track Your Expenses
Carefully review monthly expenditures, including those for entertainment. Documenting this information helps with the later division of assets and debts as well as for determining spousal and child support.
Decide If You Need Temporary Child or Spousal Support
You may need to complete court filings to ensure that your spouse pays temporary child or spousal support throughout the divorce proceedings so you can meet your financial obligations until the court makes a final decision on the division of assets and long-term spousal and child support.
Resist Temptation to Make Big Financial Changes
Refrain from making major changes to your finances before your divorce. Divorce proceedings determine the division of debts and assets. If you make preemptive changes to your will, retirement plan, investments, and life insurance beneficiaries, a judge may look unfavorably at your case.
List Non-Marital Assets
Be sure to make a list of non-marital assets or any assets that belonged solely to you prior to your marriage such as properties, inheritances, and gifts given to you before your marriage.
Determine Legal Fees
Before hiring an attorney, investigate the average legal costs for divorce proceedings in your area. You’ll need to prepare for payment of legal fees before you file. If you’re able to speak to your spouse, consider discussing spending comparative conservative amounts on legal fees.
Open New Checking and Savings Accounts
An important part of finalizing your divorce is separating your finances from those of your spouse. Prepare for this by opening your own checking and savings accounts. You may also wish to apply for a credit card in your name only.
Keep Spending Under Control
Making large purchases before your divorce finalizes could qualify the purchased items as joint property. It also makes it appear that you’re trying to divert assets before the divorce. Also, keep note of your spouse’s spending during this time and document any large purchases.
Ask For Help When You Need It
Navigating the financial aspects of divorce is tricky. Be sure to get the help of an experienced attorney for your legal needs. It’s also critical to ask for protection if you feel threatened by your spouse during the emotional and financial upheaval of a divorce.