As we come toward the end of another year, many people start thinking about changes they want to see in their lives for the new year. If divorce is in your future, this article I wrote recently can be invaluable to your financial prosperity.
Mind Your Money Matters - Beginning Divorce
By Lisa C. Decker, CDFA
Keeping an eye on your finances is always a good idea no matter what stage of life you are in. But when planning to divorce it is imperative to keep tabs on all of your financial details so that you don’t get short changed when the final divorce decree is handed down.
Getting It All Together
Start by gathering every possible financial document possible including (but not limited to):
- Bank statements,
- Credit card statements,
- Auto and home loans,
- Investments statements,
- Retirement account statements,
- Real estate property records,
- Mortgage applications,
- Tax returns (both personal and corporate if that applies),
- Life, health and disability insurance policies,
- Any financial documents pertaining to businesses owned,
- Deeds and titles, and
- Wills and trusts
- Don’t forget to check computer records as well
While this may be cumbersome, being organized will likely save you in the long run with reduced attorney and divorce financial planning fees and can help you to capture every dollar you deserve.
Figuring Out Where Things Stand
Once you have gone through the gathering process, make a list of every asset and debt item, sorting them into lists of “mine”, “yours” and “ours”.
This is crucial if you came into the marriage with assets of your own and have kept them titled solely in your name. Things like cash, investments, properties, vehicles, inheritance and gifts. Of course, whatever debt you brought into the marriage individually will be considered as well. If you shared those separate assets by depositing them into joint accounts, they are no longer separate assets and will be split among you both.
Generally, separate assets are considered apart from marital property (those things acquired while married); however, the value that those assets have grown during the marriage may be considered marital property and will be divided accordingly.
Make sure to copy everything. Records have a way of disappearing when divorce becomes imminent.
Defensive Financial Moves
- Pull Your Credit Report – Find out now about any potential problems before the divorce is final. Make sure to get your reports from all three major credit reporting agencies – Experian, TransUnion and Equifax.
- Open Your Own Credit Accounts – It is important to establish credit in your own name if you don’t have any. For many women it is wiser and easier to do while you are still married and can qualify, than to try and do it after the divorce is done.
- Payoff and Close Joint Credit Accounts –Even if your divorce decree divvy’s up your debt, creditors are not a part of this agreement and will hold you liable for unpaid debts your spouse may have agreed to pay. Best bet – pay off everything if possible before the divorce is final.
Covering the basics in the beginning stages of your divorce can save you heartache, headaches and dollars as you move forward in your new future.
Is divorce in your future? Don’t go through it without divorce financial planning. 50/50 is not always equal or equitable. Lisa C. Decker, Certified Divorce Financial Analyst™, helps her clients to “Divorce Your Spouse, Not Your Money™,” by utilizing cutting edge tools and industry insight to analyze proposed divorce settlements, point out potential problems and offer alternative solutions. Visit www.DivorceMoneyMatters.com or call 866-722-7226 for more info.
