How to Prepare Financially For a Divorce
Whether your marriage has finally wound down to where both parties realize a divorce is what they both deem necessary or whether your spouse suddenly tells you there is to be a divorce, it is vitally important you begin to think about and plan for the inevitable financial changes the future may bring. Emotions will no doubt be running high, especially if you have not suspected divorce was coming, but to salvage as much as possible for your post divorce life you must immediately begin to plan for the divorce. And, finances will play a huge role in how you will be able to manage as a single person. Further, it has been proven that a person who is organized in their thoughts and on paper regarding their current lifestyle and expenses and what they will need to be successful in the future following their divorce, almost always does better financially in the years ahead.
Obviously, if a couple has lived what is termed a “high end” lifestyle there will be many more financial considerations than if a couple has been just getting by month to month. In either case, however, there are some basic steps all individuals should take as soon as possible when getting a divorce becomes a reality. Here are some of the most important:
- Begin immediately to think of yourself as an individual, a “single”, no longer a part of a couple. Growing into this mindset may be very difficult but it is vitally necessary to your being able to carry on in the future and in being able to think how to get the best outcome from your divorce as is possible.
- Seek professional help. Begin looking for a Family Law attorney who is experienced in divorce law for your particular state and who has a reputation for caring about clients and for achieving successful final determinations.
- If you have an income or assets enough to have used a financial planner, alert your planner to what is happening and ask for his/her professional input. There are many areas of concern including investments, retirement plans, large insurance policies, expensive assets, real estate, and business ownership which will be dealt with during the divorce and you need to know what you can do to protect and hopefully achieve your desired outcome regarding these issues. Talking with your accountant can help you understand what will happen to your taxes following the divorce, depending on the final settlement.
- Immediately open a bank account in your own name, and if possible, at least one credit card.
- Review insurance policies and estate planning and make any needed adjustments and/or changes to the beneficiaries. If there are children from a former marriage be sure their interests are protected as well as children born to the couple divorcing.
- Begin to closely watch your spending and keep a detailed record of day to day expenses. This will be important when considering amounts of such adjudications as alimony and child support.
- Try to start setting aside cash money for emergencies and unanticipated expenses.
- Collect and review all your personal documents regarding how money and how much money is received and how money is spent. These documents include bank statements, tax returns, credit card statements, utility bills, and any bills which come due on a regular basis such as mortgage, rent, lawn care, pest control, car payments, etc. If you have not been the one to keep track of family finances and pay the bills, learn what needs to be done and take over at least your part of that responsibility. Each party will be required to fill out an in-depth financial disclosure with the ability to show proof for the information contained therein.
- Know what your assets are and what they are worth with written documentation for the worth of assets, which will be in contention during the divorce. Debts need to be listed and verified too. Have your attorney explain how your state determines what are marital assets and debts from those assets and debts considered non marital. Your attorney can also explain how your state statute on divorce divides assets and liabilities. Some states use equitable distribution, some equal distribution.
- Make a thorough inventory of your lifestyle and what it costs both in time and money. Following the divorce you may be required to get a job, work more hours, or change jobs as well as move your place of residence. In many instances, particularly if you are a woman, your standard of living will move downward and planning ahead will greatly help in the transition. There are a number of types of alimony, which can offer some help, but alimony awards are limited in amount and often in how long they can be received. Click Here to find out more about alimony. Try to formulate a plan for your post divorce lifestyle and create a budget both in time and money for your required needs.
It is easy to see how finances play an important role in getting successfully through a divorce and coming out a winner on the other side. No divorce makes either party entirely happy with the final outcome, but organized financial planning and futuristic thinking will, in the end, make a positive difference for both parties. If you live in Palm Beach, Martin, St. Lucie, Miami-Dade, Broward, Orange, or Hillsborough, counties in Florida, Washington DC, or New York Family Law attorney Grant Gisondo, whose office is in West Palm Beach, can provide experienced representation for your divorce. He offers a free, initial, in-office consultation where he will meet with you personally to answer questions and explain how he can help. Call (561) 530-4568 for an appointment.