Divorce takes its toll in a number of ways, including emotionally, physically and financially. You seek out friends, family and a professional therapist for emotional support, and a family law attorney to assist with your legal rights and responsibilities. So, when it comes to finances, don’t be tempted to settle if anyone tells you it will “all sort itself out” and you’ll get your half.
Divorces are highly charged undertakings and it’s important to seek professional advice from a financial planner or certified public accountant who is well-versed in divorce matters. He or she will help protect you from the very start by showing you how to budget, minimize taxes, uncover hidden assets, analyze support issues and come up with an equitable asset distribution plan.
If you start to feel that you’re losing control of the monies spent on experts, understand that funds spent now on getting your financial house in order will pay off royally, and your future self will thank you. Let’s take a look at some of the ways you can prepare.
GATHER FINANCIAL DOCUMENTS
Even if you foresee an amicable divorce, start gathering essential documents now. Make copies of everything and make certain you have important information like contact names, account numbers, balances and interest rates. These might include:
- Bank accounts
- Income tax returns for the past three to five years
- Real property items such as title, tax receipts and mortgage documents
- Stocks and bonds
- Brokerage accounts
- Retirement accounts, including pensions
- Credit card information, whether the cards are joint or sole responsibility
- Insurance policies
- Market values and cost basis of your assets, including any business one or both spouses own
WEIGH YOUR OPTIONS
Focus on what really matters in the long run and you’ll understand that reaching a fair and equitable settlement during your divorce is key. Seek out help for emotional issues that are sure to come up, and do your best to leave them out of the proceedings. Easier said than done, to be sure, but even being aware that your emotions are taking over can be helpful for reining them back in. Avoid knee-jerk reactions to recommendations and give yourself time to weigh each one. Based on the information you’ve gathered and made available to your financial advisor, you and your attorney will be able to negotiate a reasonable resolution of all financial issues.
Explore with your attorney the possibility of mediation as an option, as this non-adversarial approach can result in considerable costs savings. If you decide to go this route, be sure to run any settlement agreement by your financial advisor to be sure you are properly protected.
Plan now so that you do not become a financial victim during your divorce. Remember the goal is to come out of it with your finances in their best possible position. Financial planning will help ease your transition from married to single by helping you to develop realistic expectations, prioritize your financial goals and create a solid financial future.