A divorce is a major life shift, and it will greatly impact your finances. How should you prepare before you start the divorce process? Here are three initial steps to take:
1) Gather your financial documents.
It's very important to know your complete financial picture, i.e. your assets and liabilities. Your attorney will ask for this information and for copies of certain documents. Make a written list of account numbers and present balances for all bank accounts, retirement accounts, investment/brokerage accounts, stock accounts, credit card accounts, mortgage and home equity loans, vehicle loans, life insurance policies, and children's college accounts. Obtain a copy of the latest statement for each of these accounts. Gather copies of tax returns for the last 3 years, W-2s, and pay stubs for the last 3 months for both you and your spouse. And, secure a copy of all deeds to real estate and titles to vehicles. It's best to take this documentation with you the first time you meet with your attorney.
2) Prepare yourself emotionally.
If you have health insurance, it's very beneficial to enroll yourself in regular counseling sessions with a qualified therapist. The divorce process can be one of the most hurtful and difficult life events to endure. If you have children, it can be even more difficult. It's wise to get ahead of this obstacle by participating in counseling along the way to learn how to cope with this difficult life shift.
3) Design a post-divorce budget - and stick to it.
Divorce has a major impact on finances. It's important to understand that for a period of time, finances will be tight. Prepare a budget for yourself ahead of time so that you know well in advance what minimum monthly income you'll need to support yourself during the divorce process. Prepare yourself mentally to live on a tight budget during the process, until assets and liabilities are divided. When choosing an attorney, it's also prudent to select an accountant and a financial adviser to guide you to a healthy post-divorce financial budget.
For assistance with family law matters, contact Gertz Law Firm at 513-583-1549.