Four Steps to Prepare For Divorce
No one can ever really be prepared for the end of a long-term relationship. Even though you’ve been through breakups before, it doesn’t make it any easier. After all, regardless of the reason, you’re separating yourself physically and emotionally from the person you married. You need to prepare yourself for a pending divorce.
But when it comes to divorce there are a number of things you can do to be prepared and to make the process easier, whether you and your spouse agree to a settlement or get caught up in difficult divorce litigation.
1. Get Your Financial Paperwork Together
The saying goes that marriage is about love and divorce is about money; and it’s not that far off from the truth! The division of assets and debts make up a significant portion of most divorce proceedings. When the time comes to look at divorce as an option, it’s important to make one of your first steps getting a grip on your financial affairs in order to be prepared. Having these documents available early in the process can save the time, money, and unpleasantness that can come if you wait.
Here are some key items that should be high up on your list of priorities to obtain records and annual statements for:
- Income Tax Returns for the last five years
- Business Financial Statements (if you or your spouse own a business)
- Current Income Information
- Personal Property Tax Returns
- Banking Information & Financial Statements
- Loan Applications
- Brokerage Statements
- Stocks & Stock Options, Bonds, and Mutual Funds
- Pension, Profit-Sharing Agreements, Deferred Compensation Plans, and Retirement Plans
- Wills & Trust Agreements
- Life & General Insurance Policies
- Outstanding Debts
- Real Property
- Personal Property Inventory
As you collect these documents – some of which may require some effort to obtain – it’s important to store them safely. Use a safe deposit box that your spouse doesn’t have access to, or keep them with a trusted friend or family member.
2. Obtain Your Credit Score & Open a Bank Account
For instance, it’s still important to get an idea of where your individual credit stands. Even if you’ve only been married for a short time. Your creditworthiness can have a big impact on your ability to secure your financial future, including housing and auto loans. Also, it’s never too soon to open a checking and savings account solely in your name.
3. Make Sure Your Private Account Has Sufficient Funds
Between your day-to-day expenses and the significant legal cost of pursuing a divorce, it’s important to make sure that your private bank account(s) has enough money to get you through your divorce proceedings. Depending on your financial situation, your savings goal might be in the four, five, or even six figures.
4. Assemble Your Professional Divorce Team
Having a divorce lawyer is a no-brainer. Consider someone that is experienced in family law. For example, you may also have unusual circumstances that require a specialist, so you’ll want to interview several attorneys before hiring one. As for the rest of your support team, here are some options to consider:
- An experienced divorce financial planner. This person will examine your portfolio and assets, and make recommendations to help you come out of your divorce financially healthy.
- A compassionate therapist. Even though the legal aspect of divorce is primarily financial, it’s important not to underestimate the emotional impact. Keeping yourself mentally healthy will ensure that you move through your divorce proceedings with a clear head, and able to prepare for life after your separation.
- A forensic accountant. If you have any concerns that your ex-spouse is hiding assets or attempting to conceal any details or property that should be included in your divorce proceedings, a forensic accountant can help get to the bottom of things and make sure the financial division includes everything it should.
