Please note: This post is sponsored by Diamond Bloggers. All opinions are my own.
Divorce. It’s a tough process. Both emotionally and financially. Especially when it comes to untangling two people’s finances at home. Which why long before the discussion of spousal or child support is awarded or your post-divorce budget is in place, you’ll need to prepare your finances for the work ahead. And because each divorce is unique, specific advice can only come from experts familiar with your case. However, the following tips should point you in the right direction.
Take all non-professional advice with a grain of salt.
It goes without saying that divorce laws vary by state, so be cautious of advice, as well-meaning as it may be, that seems to be a one-size-fits-all solution. Whether found online or received from friends. If you’re unsure of any financial, social, or familiar moves to make pre-divorce, consult with an attorney licensed in your state. They will be able to give you advice on the right first steps to make. You can also look into legal clinics in your area for similar advice as well. Qualified firms, including Huntsville AL divorce attorney. Attorneys specialized in helping to make your divorce proceedings go as smoothly as possible.
Track expenses
As soon as you know divorce is inevitable, it’s advantageous to begin the process of tracking your household income and expenses. This will not only help build a budget post-divorce, but it is also crucial for your attorney, arbitrator, and judge, during the final allocation and dissolution of combines personal assets acquired during the marriage. You should be seeking to accumulate a record of the past months, if not years. including household bills, food, clothing, entertainment, home maintenance, transportation, child care, and other notable expenditures. And you are just beginning to track your expenses, collecting copies of bank and credit card statements to estimate spending from past years is a great place to start.
You’ll also want to consider your future expenses. Including family holiday expenses, travel costs, vacations, and household expenses, including one-time like replacing major appliances, estimates, and service calls. A good guide to follow is to use previous years’ expenses as a guide, but remember, circumstances change. Such as spending on child care, after-school activities, car insurance, and college tuition rates.
Gather documentation
While gathering copies of vital financial records will help speed up divorce finalizations. Necessary to giving others an accurate telling the story of your marriage’s financial health. Gathering these documents can be tedious and time-consuming, so start as early as possible. Documents including:
- Checking and savings account statements (within the past year)
- Retirement account statements (current statements, if contributions haven’t changed)
- Investment account statements (from the past year)
- Loan ledgers, including your mortgage, auto loans, and personal loans.
- Credit card statements
- 12-months worth of pay stubs
- Lists of assets and debts brought into the marriage.
- Lists of accumulated assets since the onset of your marriage
- 3-4 years of finished income tax returns
While gathering and requesting these documents, keep in mind that documents for any shared accounts from financial institutions or advisors can a source of shared information. In so much as financial advisors are under no obligation to keep your requests confidential. Making this information available and usable by both parties and their legal representation. And should your divorce be contested, be prepared for resistance. In amicable divorces, there is a free exchange of information, but in adversarial situations, one spouse might not release documents unless they’re legally forced to do so. Especially if one spouse controlled the household finances. If you find yourself facing such resistance, be sure to ask your attorney about court-ordered options.
Be financially prudent
While preparing for divorce, be sure to refrain from making big, long-standing financial decisions. As divorce proceedings will determine all sorts of other major financial changes. While it might be tempting to get a jump on adjusting life insurance beneficiaries, it’s often best to wait. As changes to beneficiaries, wills, retirement accounts, and the like will be sorted out during the final divorce decree. And rash changes to such items could cause judges to award your spouse instead. Making such changes without the blessing of the court could be grounds for criminal contempt charges. So be sure to contact your attorney if you’re unsure about any proposed, long-term financial changes.
Also keep in mind, that much of the financial dissolution of a marriage depends on your state laws. As some states treat all income, assets, and debts as a single financial source. And emptying that source in the weeks and months before your divorce could be detrimental to the overall outcome of your divorce. Often there is no advantage to being the first to empty accounts. Moreover, it will often be in your best interest to remain as financially transparent with your spouse as possible.
Continue to use your accounts, both individual and joint, per your usual level of activity. If you don’t have the money set aside for hiring a divorce attorney and other related expenses, try coming to a mutual agreement with your spouse about each spending a conservative and comparable amount for mutual legal fees and expenses, and if your relationship isn’t amicable, ask your attorney about a legal separation, which would dictate how you both use the money until your divorce is finalized.
Bring on help when needed.
When it comes to getting divorced, it’s paramount to know when it’s time to seek help. This is why changing your mindset to seek out legal aid and legal assistance should be viewed as a proactive measure and not an aggressive order. Because no matter if your divorce is amicable or adversarial, dividing one’s life from another is often too weighty an ordeal for a kitchen table discussion. This is where a lawyer can help by helping you sort through the separation of your lives and finances in a more timely, civil manner.
In addition to your attorney, a certified financial analyst can offer expertise concerning your divorce’s effect will likely have on your current and future financial health. CDFAs can help you to even determine if a divorce is financially feasible, sometimes even before contacting an attorney. A licensed, qualified CDFA can also help you to judge the merits of your divorce settlement and how to best structure it.
Ensure You Are Not Left With Nothing
If you are not able to settle things amicably with your spouse, then you need to protect yourself financially. Ideally, you cannot take money from joint accounts that don’t look like usual spending. As such, you have got to ensure that you are not left with nothing if your spouse is currently trying to keep the money from you. It might be the case that you need to find another job to tide you over until this is final. We know that this isn’t fair, but you don’t want to do anything that will go against you in the divorce like emptying the joint account.
Think about starting a side hustle to keep you on your feet for a while. If you’re crafty, you can look at creating things and selling them on a platform like Etsy, just ensure that you check the Etsy seller fees first to ensure that it is worth it for you. This is money that you have earned after divorce is filed for, and keep a record of this so that they can’t come for it.
While divorce is more than simply dividing debts and liabilities, it’s also very important to talk with a financial expert and legal expert to help prepares your life as you continue on your journey in life sans marriage. So if you are considering a divorce, be sure to consider the before-mentioned financial and legal steps before filing a complaint. Steps that will help you be more prepared for the divorce process and ensure your financial needs are protected during the divorce. Because the more organized you are before filing, the easier your divorce process will be. Now I want to ask, for those contemplating divorce or are in the process of divorcing, are you currently securing your finances with any of the steps listed above? Leave your thoughts in the comments below.
