Divorce can be a financially challenging time. Not only do couples divide their possessions, they will also enter the next stage of their life with only one income. As a result, it is important for divorcing people to take steps today that protect their financial future.
1. Prepare your documents before beginning the divorce process.
Creating a legal strategy that protects your financial health often starts with having a complete view of your finances. Collecting the right financial documentation can help you have this comprehensive view throughout the divorce process. Documents to collect include:
- Documents establishing you and your spouse’s income, including recent years’ tax returns
- Bank statements for your accounts
- Documents establishing the value of your retirement savings, stock portfolio and stock options
- Credit card statements, mortgage documents and any information regarding loans
- Appraisals of your real estate holdings, collected artwork or other valuable assets
- Lists of the property that you and your spouse each brought into the marriage, gifts received during the marriage, any inheritance you received and other property that the court would likely consider separate property
You may also want to document your monthly household expenses. This is especially important for parents who may need to address the cost of school tuition, extracurricular activities, health care and other costs for their children.
2. Do not overlook your debts.
While many people know about the challenge of dividing valuable assets like their family home during a divorce, some may overlook the equally important challenge of dividing debt. If you and your spouse have acquired debt during your marriage, the court will divide those debts along with your possessions. Keeping your debts in mind will hel
3. Carefully consider your priorities.
When approaching property division, it can be particularly important to consider which financial details are most important to you. If you are nearing retirement, for example, preserving your retirement benefits may be the best way to ensure your comfort in years to come. If you have young children, on the other hand, you may choose to let some valuable assets go in order to maintain ownership of the home they know and love.
If you have questions about how to protect your assets in divorce, you may want to speak with financial and legal professionals early in the divorce process. They can help you approach the divorce process with greater confidence and a plan that protects what matters most to you.