Financial Tips in Divorce
Most people do not expect to get divorced; when a marriage does break up, a soon-to-be ex can be caught off-guard and unprepared.
This is especially true of the financial implications during and after divorce. Most people are unsurprised by the emotional nature of divorce. It is a big life event. However, many underestimate the potential financial changes involved. Taking care of the financial side of divorce in an organized and logical fashion can greatly ease the transition to life post-divorce.
- Make an inventory of all your assets and understand their value; ask your attorney if you should have some property appraised. Do not let emotions cloud your judgment when evaluating certain property. It may be hard to leave the family home, but the expense of staying in the same house may make it impractical.
- When evaluating your assets, note whether the assets were accumulated before or during the marriage.
- Document any gifts either spouse received during the marriage and anything either spouse inherited during the marriage.
- Make an inventory of all your debts and know the amount of the debt. Be prepared to explain whether the debt was accumulated before or during the marriage.
- Update financial and legal documents as soon as possible. It is likely you’ll want to change beneficiaries on your insurance and update estate planning documents such as wills and trusts. It is essential to protect yourself by making sure your name isn’t on an ex-spouse’s line of credit (so you aren’t obligated if your ex defaults) and you should cancel joint credit cards and checking accounts. Seek the advice of your attorney on when these changes will be permissible.
- Obtain experienced professional help. The right attorney can provide you with alternatives to an expensive court battle such as mediation. If a court division of assets and debts is necessary, you’ll need to ensure you have a realistic understanding of your situation and enough income for the future. Other professionals, such as financial advisors, can work with you to create a practical future financial outlook.
While divorce can be emotionally draining, it is important not to let other aspects of your life – such as your job and overall health – become too affected. If approached correctly and with advanced planning, your financial situation can be managed, allowing you to move on from the divorce emotionally.
If you are considering divorce, contact an experienced family law attorney to discuss your situation.