Doing your financial homework before you file for divorce can help you avoid a host of potentially costly pitfalls. Learn all you can about the divorce laws in your state and consider engaging a team of experts to get you through. The timing your divorce may also play a role in the financial outcome of your divorce.
Meeting with a Certified Divorce Financial Analyst, such as myself, also can provide you with a deeper understanding of especially complex divorce finances and how to better approach your unique situation. Even meeting with an experienced divorce attorney for a consultation can be invaluable before you start the process. Ask lots of questions of these experts and start developing your divorce strategy and long term goals.
It is very important to gather and make copies of all your marital financial documents including bank statements, investment and retirement accounts, credit reports on yourself and your spouse, mortgage statements, receipts for large purchases, income tax returns for the last 3-5 years, etc. Other documents to copy include loan applications, wills, trusts, brokerage statements, credit card statements, deeds to real property, car registrations, insurance inventories, and insurance policies.
Also, copy records of your separate property, such as any items you have inherited or gifts from your family. These assets will remain yours as long as you can document where they came from. Copies of your spouse’s business records also can show where hidden assets may be hiding.
Photograph everything in safe deposit boxes and home safes, as well as expensive household items and collections in your home. Get appraisals if appropriate. Remember you own half of everything purchased during the marriage — even if something is “in his name.” If you don’t ultimately want an asset, your attorney can use its value to secure possession of something you do want in the settlement.
You may also want to repair your car and get new tires, get medical procedures done for yourself or your children, purchase some new clothes, get training or take some college classes if you’ll be looking for a job during or after the divorce.
One significant shift will likely occur once you file for divorce. The income you’ve been living on for one household must now support two. This will put a demand on resources immediately. Start early to save what cash you can to get you through the process. If you and your spouse have a jointly held savings account, consider withdrawing a percentage of the cash and putting it into a new separate account in your name only before you file. (You will still be accountable for it, but you are making sure it’s safe and available to you if you need it.)
Legal fees are typically considered community debt, so putting them on a credit card may also help you retain cash reserves. For answers to questions about divorce finances, please join me at the next Guide to Good Divorce seminar on Sept. 22 in Houston, www.GuideToGoodDivorce.com, or call me at 832-858-0099.