There’s no question that divorce can be one of the most emotionally draining experiences that a person could go through. Regardless of the reason for you and your partner’s split, such a situation can cause all sorts of unsettling and painful emotions to anyone. But apart from losing all the shared commitments and dreams, the hard fact is that you can also lose a considerable amount of money.
This is a contributed post and do not necessarily reflect the opinions of Meet The Harris Family.
While divorce can be an expensive process, you can effectively protect your finances from getting drained just by playing it smart. If you’re going through a divorce right now, here are five steps on how to be financially prepared.
Talk to divorce professionals
Divorce is something you should not take on by yourself. This process involves emotional, financial, and legal components, which requires the assistance of professionals. The first one you need is to find the right divorce attorney. Interview at least three divorce lawyers and choose the best one for your budget and situation. The next professional you need is a financial adviser who can help you plan for financial pitfalls and the corresponding solutions.
Lastly, spiritual and emotional counsel is needed, may they be a minister, a therapist, or a psychiatrist. Consulting with such experts is important regardless if you and your spouse are on good terms. The process can be devastating, especially for your kids.
Gather financial documents
Gathering all your financial records can help your divorce attorney have a clear view of the financial health of your marriage. Accessing every record won’t be a hassle if you and your partner share the accounts. You can start with your investment account statements, checking and savings account statements, credit card statements, and ledgers for loans such as mortgage or auto loans for the past year.
You’d also want to gather your recent pay stubs, retirement account statements, income tax returns, lists of debts and assets accumulated since marriage, children’s bank accounts, will and trust agreements, and social security statements.
Refrain from pursuing big purchases
The process of divorce is already a major financial expense. So, before you get tempted to making other big financial decisions such as adjusting beneficiaries for your life insurance or buying a house to move in, it’s better to wait first. If you’re already going through the proceedings, making major changes might cause the judge to favor your spouse in certain terms.
Furthermore, keep in mind that money can be tight, and you can’t possibly tell how long or how much the entire divorce process will cost you. Taking on big personal purchases might put you in a grave situation of not being granted child custody or other court agreements. In case you really need to make a crucial purchase, be sure to check in with your financial adviser first.
Track your expenses and savings
If you aren’t still tracking your household expenses and income, this is the best time to do so. Doing so will help you create a budget following your separation from your spouse. It might even be useful for your lawyer and the judge in determining the best way to split debts and assets. Check beyond the normal expenses and consider things such as one-time expenses, vacations, and holiday trips. Don’t forget to check your credit card and bank statements too.
As for your savings accounts, be sure to continue contributing to them. If you have individual savings accounts, there’s nothing else you should do. However, if you have joint savings accounts, you can directly talk to your financial adviser about what you should do, particularly if your spouse is not considering an agreement.
Be prepared for resistance
If you’re lucky enough to face a civil divorce process, the exchange of information will come easily. However, in case you and your spouse are not in a calm and collected situation, the release of records would be a problem. People in adversarial terms won’t easily hand out any important paperwork until they are forced by the law.
Expect these tough situations in advance by gathering all vital documents before even filing for divorce. If the divorce is already filed and your spouse is fighting with you every step of the way, check court-ordered options with your lawyer.
There can already be tons of disagreements and stress in the process of divorce, so don’t let your finances fall through as well. While your marriage is beyond saving, you can always do something to protect your finances. Make the process a lot easier for you by taking these ideas into consideration.
