Divorce can sometimes stretch a person’s finances to the breaking point. During the divorce process, there are important issues that need to be resolved concerning the division of your community assets and debts. After your divorce becomes final, you may have to live on a reduced household income.
However, you can take proactive measures that can reduce the financial stress you experience. Here are some steps you can take that can protect your assets and reduce the financial discomfort that divorce can bring.
Recruit a financial team – First and foremost, this should include an experienced divorce attorney. You may also want to get the advice of a financial advisor or investment professional.
Make copies of all of your financial information – This should include statements for bank accounts, investment accounts, retirement accounts, 529 plans, and others. Include your individual accounts, your spouse’s individual accounts and jointly-held accounts.
Take a realistic look at your budget – Understand how much you will need to maintain your household after your divorce and compare it to your income. Are there expenditures for items and services that you could live without? Will you be incurring expenses after divorce that you are not incurring now? Can you delay certain necessary purchases until your financial situation stabilizes?
Understand what your net income will be -Your net income after divorce could be higher or lower than it is now depending on whether your divorce settlement includes spousal support. Child support may also be a factor here. But keep in mind that in the eyes of the law, child support is for the benefit of the children, not for the benefit of the receiving parent. Your lawyer can provide guidance regarding these issues.
You may need to detach yourself emotionally from your home – You may be heavily invested in their home, both emotionally and financially. But covering the mortgage, plus utilities and maintenance on a single income may not be possible. Face the fact that you may be better off financially by selling your home. Again, your divorce lawyer can help you make the right decision.
Be vigilant concerning your assets, your spouse’s assets and your community assets – Some spouses may be tempted to take the other spouse’s, individual assets, hide community assets, or transfer title of community assets without the knowledge of their spouses. If you suspect that your spouse is doing this, seek legal advice as soon as possible.