Going through divorce can be a difficult and emotional process, yet partners must discuss financial considerations during divorce before one can be finalized. For example, couples need to determine how they will split marital property, whether or not to keep the family home, as well as if any spousal support will be needed. Additionally, many individuals worry about the impact divorce might have on their finances and how they will provide for themselves in the future. Although some lifestyle changes are often necessary, there are many steps a person can take to begin building his or her own credit, savings and financial identity.
How to Handle Finances Before and During Divorce
If considering divorce, start protecting your financial interests as soon as possible. For example, collecting your monthly bank statements and past tax returns will be beneficial at your initial consultation with a divorce attorney. Also, be sure to avoid unnecessary major expenditures, check your credit report for any errors and begin to build savings for the post-divorce transition.
Once it is time to officially file for divorce, a person will discuss with his or her attorney a tentative budget that includes expected costs. Factors that are considered include a person's:
Income and earning potential
Child care needs
Necessary living expenses
Child or spousal support needs or obligations
Anticipated health or insurance costs
Assets (owned either separately or jointly)
Outstanding liabilities
This analysis should provide a good idea of how financially prepared a person is to live a single life and whether any assistance will be needed from his or her spouse. However, the preparation does not stop there. Most people have beneficiaries listed in their will and on life insurance policies. Do these need to be changed? Have all jointly owned bank accounts or safety deposit boxes been closed? Has your mortgage company received updated title information for your home? Do your best to avoid financial complications down the road and begin preparing today. Speak with an experienced divorce attorney to discuss financial considerations during divorce and to begin protecting your financial future.
