Divorce is difficult in so many ways. Between divvying assets and establishing alimony or custody, it can be emotionally taxing for everyone involved. Unfortunately, the financial aspect of divorce can be daunting if you’re unprepared, and it’s important to be educated and aware of what is coming. There are a few tips you can follow to help ease the stress and help keep you organized.
Forget Advice from Family, Friends, and Coworkers
The people in your life mean well, and they just want to help! However, unless they’re divorce lawyers or financial advisors, take their advice with a grain of salt. Every person’s divorce is unique and individual, as is your financial situation going through it. In fact, following financial advice from anyone other than professionals can spell disaster. If you don't know where to start with your personal finances, ask your lawyer if he or she can recommend a financial planner.
Once you know that divorce is inevitable, you should begin tracking your household income and expenses. This will help build a budget post-divorce, will help your attorney and the judge in deciding how to split assets and debts, and whether to award alimony or child support. You should include household bills, food, clothing, entertainment, home maintenance, transportation, child care and so on. Use your bank and credit card statements to estimate spending from past years, and then project future expenses.
Obviously, documentation is important when going through divorce—it’s sure proof of your monetary standing, and can give evidence of information from years past. They’re imperative in giving your legal team insight into your finances and assets.
Start with (for the last year unless otherwise noted):
- Bank account statements
- Retirement account statements (current, if contributions haven’t changed)
- Investment account statements
- Ledgers for any loans, including personal loans
- Credit card statements
- Pay stubs
- Lists of assets and debts, before and after marriage
- Income tax returns (past three years)
Don’t Make Big Financial Decisions
The divorce proceedings will consider all of your major financial changes. It might be tempting to make big purchases or change beneficiaries, but you should wait. If you’ve already filed, making such changes without court approval could be grounds for criminal contempt charges. Ask your attorney if you’re unsure about a financial move.
These are just some of the steps to take to prepare for divorce, especially financially. It’s important to be prepared and organized, and it’s so much easier when you’ve got a good attorney on your side. Pacific Cascade Family Law can help you every step of the way. Call us today at (503) 227-0200 to set up your consultation.