The divorce process has many complicated issues to consider, but one of the most stressful factors can can your finances. From the cost of the divorce to actually dividing your assets, money issues can make an otherwise amicable divorce tense and difficult. The best way to avoid unnecessary stressors in your divorce is to financially prepare as much as possible. Below are the 4 main steps you should take to financially prepare for your divorce and prevent future financial conflicts the best you can.
Get an attorney. Though the initial cost of hiring your own attorney can seem daunting, it is the first and most important defense to have when preparing for money issues in a divorce. Even if you do not know what the first step is in dividing your assets and debts, it is hugely beneficial to have assistance in money matters and getting your correspondence with your spouse in writing. For instance, you may need help if you have a joint credit card with your spouse. If you have a joint account, any debt will be split evenly-even if your spouse acquired majority of the debt. An attorney could help you get certified and documented communication from your ex, the judge is more likely to rule in you favor in case of a settlement proceeding. No matter what the specific situation, an experienced attorney can advise you on any possible issues that arise in a divorce.
Get up-to-date information on all finances. Preceding the divorce, it is more important than ever to talk to your spouse about financial issues. You and your spouse need to be fully aware of jointly owned and individual outstanding debts. Enlist the assistance of your attorney to get a fully disclosed account of all financial records and accounts, including credit card accounts, home equity lines, IRS taxes, student loans business debts, and any other pertinent information, even if it’s as small as a department store charge card. By fully disclosing your financial position, you and your spouse can prevent any surprises that might warrant conflict.
Get your own accounts. Once a divorce is agreed upon, you will want to establish accounts in your own name as soon as possible. Get your own checking account, credit card, savings accounts, retirement account, and car insurance all in your own name. Begin routing all your paychecks and deposits into your own accounts as soon as possible. Since any joint accounts can be split evenly between you and your spouse, getting your own accounts prevents your spouse from using your finances in a way that you may feel is unfair.
Sort out mortgage and rent payments. If you and your spouse are both on the lease for your current home, you will want to consider this issue right away. This is important to address when financially preparing for a divorce because creditors will expect payments to be made regularly, no matter what the status is of the divorce process. If you want to move out as soon as the divorce is initiated, it may hurt your claim to the home. Also, if you move out you will still be responsible for half of the payments, whether you are living there or not. In this case, you can come up with an agreement with your spouse about who keeps the home and how payments are made, or a judge can mandate sale of the home to make the process easier. Either way, consulting with your attorney is the best way to make the decision.
