Preparing for a divorce is much more work than you might think. This is because the financial issues involved in the process are fairly complex, especially if you or your spouse are contesting the divorce.That's why it's crucial that you take the time to look at your personal finances and prepare yourself for what's to come. In addition to the various court costs and any support (child or spousal) you may need to pay, you may also have the additional expenses of purchasing a new home, buying new furniture, or investing in a new vehicle.
If you're preparing to file for a divorce, these six tips can help you prepare yourself financially, so that, on top of everything else you'll be going through, you won't have to worry about making ends meet.
Paperwork and Documentation Tips
The first three tips have to do with paperwork and documentation. The earlier you can get started on these tasks, the better position you'll be in when you head to court.
TRACK YOUR EXPENSES
First, as soon as you know your heading for divorce, it's time to start tracking your personal expenses. You'll want to know exactly what percentage of your income is covering the household bills. This is helpful for your lawyer and the judge because they will be able to see what kind of financial burden you're under and split the assets and debts accordingly. This may affect who pays spousal/child support and will give you an idea of where your finances will be once the divorce is finalized.
GATHER STATEMENTS, ACCOUNT BALANCES, ETC.
The second tip is to begin gathering all of the documentation your attorney will need when you file for divorce. You will want to collect all of your statements including:
- Credit Cards
- Car Loans
- Other Misc. Loans
- Checking/Savings Account
- Retirement Accounts
- Investment Accounts
You'll need to go back at least a year so the court will be able to see your financial history. Then, you'll need to assemble your most recent pay stubs, three years of your tax returns, and a list of the assets and debts you had before you were married, or those you inherited and/or were gifted to you during your marriage.
PREPARE FOR A FIGHT
If your divorce is amicable, you and your spouse may have some disagreements, but in the long run, you both want to divorce and are happy to compromise. If the divorce is contested, however, it's going to be much more difficult. If your spouse paid most of the bills, he or she may change passwords to online accounts and do whatever he/she can to limit your access to this information. Your attorney may have to petition the judge for a court order giving you access if that's the case.
Commonly, important documents, such as those listed above, might "disappear" early in the process; this is another reason why it's important to start gathering information as soon as you know you (or your spouse) want out of your marriage.
Spending and Knowing When to Get Help
The next three tips give great advice on what to do financially while you're preparing for and going through a divorce.
DON'T MAKE CHANGES TO YOUR WILL, INSURANCE, AND OTHER DOCUMENTS
You may be tempted to quickly remove your "soon-to-be" ex-spouse's name from your retirement account, will, life insurance policy, and other paperwork, but you don't need to just yet. In fact, doing so could actually hurt you in the divorce, so it's best to wait. These things will come up during the divorce proceeding, and you'll get a chance to address all of the changes you'd like to make. It is important to know that, while a divorce is pending, most of these actions are actually prohibited, by law.
DON'T MAKE UNNECESSARY PURCHASES
Before you get divorced, the assets in all joint accounts are still considered marital property. You don't want to spend a considerable amount of those assets on things for yourself. The court could see it as you trying to take as much money as you could from your spouse before the divorce, especially if your spouse contributes more to the account than you do. Instead, continue making the same, usual expenditures and deposits and only make "major" purchases with your spouse's knowledge and consent.
YOU'RE NOT ALONE
Remember, you don't have to go through your divorce alone. There are legal experts who will help you gather the documentation you need, advise you on how to use joint accounts while you're going through the divorce process and assist you with beginning to separate finances. Trying to learn how to handle the financial aspects of a divorce while dealing with all of the other things that come with ending a marriage can be overwhelming, and it's easy to make mistakes. It's a much better idea to reach out to those who know the law and understand how a judge is likely to view your actions before any actions are taken.
If you live in Wisconsin, the Law Offices of Gagne McChrystal De Lorenzo and Burghardt are here to answer any questions you may have and to represent you during your divorce. Contact them today to schedule an appointment.