Balancing Your Finances During Divorce
The emotional toll of divorce on an individual is undeniable. It disrupts all aspects of a person’s life, including their finances. Here, the family law attorneys at Rodier Family Law outline methods for ensuring financial security during and after divorce.
Financial stress during divorce is inevitable. Divorce is costly in and of itself, and requires that separating couples divide their assets—a practice that may prove challenging and lead to financial losses. The addition of multiple living expenses to the equation makes the prospect of maintaining stable finances bleak. There are, however, several ways of ensuring future financial security and stability. The following are strategies individuals can employ to protect their finances during and after a divorce.
Maintain Financial Organization
The best way to prepare for the painstaking process of dividing assets and finances is to keep your financial records as updated and organized as possible. If you and your spouse have decided to divorce, evaluate the organization of your financial records as soon as possible, and update them accordingly. A family law attorney will be able to assess your financial state and assist you with the division of assets much more easily if you have a clear financial picture prior to the finalization of your divorce.
Inventory Current Assets and Debts
Create a detailed record of your current stock holdings, property, loans, mortgages and outstanding bills. Be as honest as possible with your spouse about your current debts, and request that they be equally as honest with you. Just as you both will share in the assets accumulated during your marriage, so will you also share each other’s debt.
Prepare for the Financial Future
Divorcing your spouse means not only the start of a new life, but the beginning of a fresh financial start. Open individual checking and savings accounts when it is appropriate to do so, and close or cancel all current jointly held accounts and credit cards. It is also prudent to obtain a credit report. Your spouse may have accrued debt in your name without your knowledge which will have a negative effect on your credit score.
Build a Financial History Archive
Dividing your assets and getting a financial foothold on your new life will be far easier if you have an extremely well-documented financial history. Using these documents, you can also put together a weekly, monthly and yearly budget based on the expenses you see throughout the documents you collect. Documents you should consider obtaining electronic or paper copies of include:
- Tax Returns
- Loan Documents
- Credit Card Statements
- Vehicle Registration
- Insurance Policies
- Bank Information
Document Material Assets
Take photos and create an inventory sheet of your most important assets and valuables. Be sure to document the valuables in your safety deposit boxes as well. You and your spouse are entitled to 50% of all your combined assets, so this documentation will become important when you begin dividing material possessions.
Research Spousal Social Security Qualifications
Your social security benefits and your spouse’s may not be equal. This is especially true if your spouse has earned a higher salary than you for most their career, as they will qualify for higher benefits payments than you. Under certain circumstances, however, you may also qualify to receive these higher benefits payments. Consult the guidelines laid out by the Social Security Administration to determine whether you qualify.
Having an understanding of these guidelines will help to ensure that you will emerge from the stressful process of divorce with a solid financial foothold that will help you begin your new life. An experienced family law attorney can guide you through each of these steps as they help you navigate through the difficult process of divorce.
For more information about maintaining stable finances during your divorce or to speak with an experienced and knowledgeable family law attorney, contact the offices of Rodier Family Law today.