Financial Steps Individuals Should Take To Prepare For Divorce
A person going through a divorce can expect many changes, particularly with respect to his or her finances. When preparing for a divorce, it is important for people to plan for how the separation might affect their financial situation. Spending some time thinking about the financial future can be a huge help to people preparing for their lives post-divorce.
When getting a divorce, it can be important for each spouse to prepare a budget that plans for his or her new financial situation. Sometimes when couples are married, there is one person that is mainly in charge of finances. So when a divorce occurs, it can be difficult for the other spouse to figure out a budget and stick to it. It is always a good idea to have some sort of a budget to know how much money is coming in and going out. Especially in the case of a divorce, it is important for Texas couples to be prepared since finances will be changing.
It may also be a good idea to meet with a financial adviser when getting a divorce. A financial adviser can help you prepare a budget. Each spouse should start paying attention to his or her bank accounts so they know how much money they have. It can be a good idea to review tax documents and bills to have a better understanding of what the financial picture is for each party. It is also beneficial to have emergency money stashed away somewhere to pay for unanticipated expenses. This money could also be used for attorney fees.
Taxes are another thing to consider, especially if the couple has any children. The couple will need to figure out who can claim the children as dependents. If one person is paying alimony, the couple needs to make sure that the spouse on the receiving end is reporting it as income and that the paying spouse is able to list it as a tax deduction.
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Ensure that finances and credit are separate after divorce
It is important to make sure that finances are separated as much as possible during a divorce. Leaving finances commingled can have great consequences for each spouse financial situation and credit. In order to ensure that finances are separate, the spouses should have their own separate bank accounts and cancel any joint accounts. Once a spouse’s name is no longer on an account, that person is no longer responsible for payments on that account. If the spouse who holds the account fails to pay, it will not affect the other’s credit.
A financial adviser can also be helpful in going through documents such as life insurance policies and other documents that list beneficiaries. Seeing an estate planner to change any existing wills may also be a good idea. While married, many people list their spouse as a beneficiary of their will, however after a divorce many people want to change this.
A divorce can also affect a person’s housing situation. For example, if both spouses are living in a home together, it may be a good idea is to sell the home. Otherwise, after a divorce both spouses could still be responsible for paying the mortgage on the house, even if only one of them is still living in it.
Divorce can bring about a huge lifestyle change for each spouse. Adjusting to those changes can be very difficult and emotional. An experienced family law attorney can help assist in any financial planning or finding the right financial planner for the client. Family law attorneys see many divorces and all kinds of different situations. If you are going through a divorce, contact a Texas family law attorney to explore legal options.