If things are not going well in your relationship, and you think you might have to consider divorce, here are 7 important things to help you prepare. Several of these are also great financial tools to use whether you separate or not. Empower yourself to make more effective financial decisions. Prepare yourself financially- and move forward.
- If you are not the spouse who controls the money and pays the bills, get a good advisor to help you prepare. Your ‘regular’ financial planner or investment advisor may not have the specialized training you will need to deal with a divorce. Seek out a Certified Divorce Financial Analyst, who has received focussed training on these issues, including pre-, during, and post-divorce planning and implementation.
- Prepare a budget. This is the first thing I recommend for my divorcing clients, and one of the first things your attorney will request if you begin divorce proceedings. Know where your money is going; consider how much you and your children really need to live on now- and if you separate.
- Consider where and how you would like to live, and prepare a Phase 2 budget for what that may look like when you live apart. Child support is often determined by formula; focus on what might be required in maintenance/alimony if there is a large difference between your spouse’s and your own income.
- Take care of necessary medical issues now, while you are still together and your medical insurance is in place. If the children need braces, or you have been putting off elective surgery, do it. If you were planning to go back to school, especially if it will help you improve your job, or enable you to re-enter the workforce, don’t put it off! If you find yourself under new stress, as many people do, see a counselor for some help. Divorce procedure usually requires that customary activities continue, so start now!
- If you are planning to stay in the home, get necessary repairs done. Get the car fixed. Get things in order, so that if you end up single again, you won’t have to worry about them. And it’s easier to have these jobs done and paid for now, than to argue about who is responsible for them later.
- Change your passwords on your phone, email and online accounts, and open a post office box or make arrangements for a friend to receive important documents that you wish to keep private.
- Credit: Get copies of all credit card statements, so you know what cards are out there and in whose name they are titled. If you don’t have credit in your own name alone, this is the time to apply for a card. Use it- and establish a credit record of your own. If you want to keep the house, you may need to refinance it, and a credit history will be very helpful.
- Get copies of all financial statements– bank accounts, credit cards, loans, mortgage, investments, retirement accounts, tax returns. What are your assets? Your liabilities? Don’t forget that both assetsand debts may be divided. Know what you own and what you owe.
Whether you were a Scout or not, Be Prepared is a great motto. If you stay together, knowing about these issues can make you a better financial partner. If you don’t stay together, this information may help you gain a more equitable settlement.
ADRIENNE ROTHSTEIN GRACE,CFP, CLTC, CDFA
Securities offered through Cadaret, Grant & Co. Inc. Member FINRA/SIPC. Davis Financial and Cadaret, Grant are separate entities.
The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Adrienne Rothstein Grace is not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
