It’s hard to imagine planning for a divorce as one is usually in the emotional process of the marriage split up and not focused on the financial aspects. Considering that money is the number two cause of divorce in the U.S., perhaps the marriage’s economic condition needs stronger monitoring throughout to ensure that foundational post remains strong. (In order, the 10 leading causes of divorce is American are: 1. Lack of communication, 2. Money, 3. Cheating spouses, 4. Wrong expectations, 5. Lack of commitment, 6. Addictions, 7. Sex, 8. Mid-life crises, 9. The little things — lack of courtesy or concern for a partner and 10. Societal causes, i.e., the ease with which divorces are granted, thereby discouraging couples to work out their marriage. Source: The Divorce Guide.)
But if you have arrived at the point of no return within the marriage, ensure that you do as much as possible to secure your financial future.
1. Secure funds for attorneys, other professionals and the divorce itself. Plan to have enough funds on had to pay these professionals and your living expenses for at least three years., A divorce can occur within a much shorter time period; it can longer. Be prepared.
2. Hire an attorney. Do not try winging a settlement with your intended ex by yourself. Especially if you are an attorney. Rarely does a divorce come as a surprise for either partner and each party is going to naturally view what they feel they are owed from the marriage to benefit oneself. Divorce is complicated and requires a dedicated and experienced profession who is not emotionally tied to the matter.
3. Collect financial documentation. Gather bank statements, tax returns, brokerage account statements, credit card statements, real estate documents, mortgage applications and contracts, documents related to major purchases, wills and trust information, copies of online account statements with banks or credit cards, go online and get all of the account statements, check copies, and deposit tickets. While this may appear to be a massive undertaking (and it is), it will prove invaluable during the divorce process. Knowledge is power.
4. Make lists of all known assets, liabilities, real estate, and business interests. You require as complete an accounting as possible in a divorce. Your memory or what you think you own are generally not as reliable as a thorough list of these financial interests.
5. Open accounts only in your name. Open new bank accounts and credit cards, preferably at banks or companies which do not have your joint accounts. Use completely different and unknown to your soon-to-be ex passwords.
6. Monitor your credit. Obtain your credit report and review it for accounts you may not know about. Look specifically at the bottom of your credit report to determine which companies have made inquiries into your rating. This may give you an indication of other expenses or assets that your spouse secretly secured.
7. Get a secure mailing address. You will need a secure address to send the statements for your new accounts, to receive correspondence from your attorney, or to receive other important communications. Do not allow these papers to come to your house, as your spouse could intercept them. A post office box is probably the best option because it will be secure and private.
8. Change beneficiaries and decision-makers. You should change your will and your healthcare power of attorney so that your spouse does not have decision-making capabilities. You should change the beneficiary on your life insurance policies and financial accounts.
9. Don’t assume that you will get half of everything in the divorce. State laws vary, and the concept of equitable distribution doesn’t necessarily mean an even split. Pay attention to your attorney’s advice and be prepared to negotiate assets and liabilities with your spouse.,
10. Prepare yourself for a lengthy process. Your divorce might be done quickly but it might not. You should be prepared for the long-term scenario as it will allow you to negotiate from a position of strength as opposed to financial duress. Prepare a plan of action with your attorney and other professionals at the outset of the divorce process and negotiate a payment plan at specific benchmarks so that all parties are prepared to see the divorce through to a fair and equitable splitting of the assets.
And finally, emotions will run high on all sides in a divorce but under no condition should you ever take it upon yourself to follow your spouse to determine activity or location of hidden assets, resort to any sort of illegal wiretapping, hacking into smart phones or PCs or participate in any sort of document tampering. Prepare a timeline of important financial events in your marriage (first house, vehicles, pension participation…) and leave it to your attorney to locate these assets.
A divorce is difficult for all parties involved. Keep your sites on your future and ensure that you are surrounded by people with the same focus.
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