Are you preparing to divorce your spouse? Divorce can often be a complicated and difficult process. However, you can reduce the complexity by taking some preparation steps before you begin divorce proceedings. That's especially true when it comes to managing your finances. If you've been financially dependent on your spouse or if he or she manages the finances in your home, you may find it challenging to transition into single life. Check out the three steps below to help you prepare for the divorce proceedings and for your new financial independence:
Assemble an inventory of assets and debt.
Take time before you file for divorce to assemble a list of all of you and your spouse's assets and debts. This list should include property, investment accounts, bank accounts, and other assets, as well as mortgages, credit cards, and all other debt. If possible, get statements for every account so you'll have them when you start divorce proceedings. Also, get other important documents like tax returns, paycheck stubs, and copies of insurance policies.
By assembling these documents in advance, you'll be able to negotiate from a fully informed position. That will help you get the best settlement or judgement possible. You also may save some money in legal fees. If you fail to assemble these statements and other documents before you file for divorce, you may have to pay your legal team or other advisors to do it for you. Investing the time to research your financial situation could save you significant money in the long run.
Open your own accounts.
Anything can happen after you tell your spouse you're filing for divorce. He or she could drain the bank accounts, or even cut off your access. They may kick you out of the house, cut off your cell phone, and make your life difficult in general. You also may not start getting spousal or child support for a long period of time, possibly weeks or months.
You'll likely want to have some kind of nest egg to help you transition through this period. Take the initiative now to open your own bank accounts and start stashing money away. Also, think about opening your credit cards so you can start to establish some individual credit. You also may want to get a post office box where you can receive documents about your credit cards and bank accounts.
Set your priorities.
Finally, it's always a good idea to go into your divorce settlement negotiations with a list of priorities and expectations. How much spousal support will you need? How much time do you want with the kids? Which assets are important for you?
You can save yourself time by answering these questions before you even file for divorce. Meet with a divorce lawyer and possibly even your financial planner. They can help you identify your needs and goals so you can get the most favorable outcome possible to your divorce settlement negotiations.