Divorce Financial Planning – Protect Your Financial Future
A divorce is likely the most financially significant event of a lifetime. When the decision to divorce is reached, it’s important to have a plan in place to deal with your property, debts, and assets.
How to Protect Your Future with Divorce Financial Planning
Divorce financial planning has become more complicated in this uncertain economy with fluctuating property values and high unemployment. This means that planning ahead and making divorce financial planning a top priority early on is even more important than ever. Here are some steps you may want to take:
1. Gather financial documents including:
- at least one year of monthly account statements (including bank, brokerage, retirement, and credit cards)
- all tax returns filed jointly or separately from the past three to five years
- recent pay stubs
- verify the contents of any safe-deposit boxes
Make copies of all financial documents and store them outside your shared home (at a friend’s or family member’s home). All documents should be turned over to your attorney for review. By having this information compiled early, you save yourself the stress and trouble of trying to locate it once the divorce proceedings have begun. Also if the divorce is contentious, your spouse may try to hide or block access to the documents.
2. Assess and protect your credit by requesting a copy of your credit report.
Be on the lookout for new accounts and rising credit card debt. Determine if your credit card accounts are jointly owned or if you are simply an authorized user.
3. Open accounts in your own name at a new financial institution.
Set up a personal checking and savings account and make sure you have a credit card in only your name. Have these statements sent to a private mailing address or email account.
4. Get help.
Your attorney should be able to assist you with basic financial issues. If your situation is more complex, be sure your attorney is willing to work with a financial expert. By hiring an expert in divorce financial planning, you will be assured that your finances are protected. At Spooner & Associates, we work hand-in-hand with certified divorce financial planners and accountants.
5. Be watchful.
Protect yourself and your family throughout the process. A few tips include:
- Don’t move out of the marital home without consulting your attorney
- Don’t transfer or give away jointly owned assets
- Never sign a document until your attorney reviews it
- Don’t cancel or change insurance policies
These suggestions may seem obvious, but the emotional strain and stress caused by divorce can cause people to act irrationally. By assembling a team of people to assist with your divorce and divorce financial planning, you can protect yourself from decisions made out of emotional turmoil. By preparing early for the financial impact of a divorce, the process can proceed much more smoothly.
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