4 Steps That Will Prepare You Financially For A Divorce
- JWB Post
- October 12, 2015
Sarah Chang understands the agony people undergo while going through a divorce. More so, because of the finance that is now supposed to be rearranged and divided. Below are four tips from the expert writer on how do you keep your head above water when you’re going through a divorce:
- Get Your Documents Together
Early in the divorce process you should be assembling your financial documents, including tax returns, yearend reports from credit card companies, and interest/dividend statements. Put the hard copies somewhere safe — Divorce Financial Strategist Jeff Landers suggests entrusting a close friend or family member, or even paying for a safe deposit box. Although we don’t want to think about things getting ugly as a marriage dissolves, it’s always a possibility. Landers says that by having these documents “you avoid any possible unpleasantness (not to mention time and expense) trying to get copies of them later.”
- Know Your Credit
Whether you want to accept it or not, good credit makes the world go around. Your world, at least. You can’t buy a car, get an apartment, or qualify for a mortgage unless you’ve got good credit. Of course you should be pulling a yearly credit report for yourself and your spouse, but let’s say you haven’t done that (hey, we’re not perfect either.) Landers suggests pulling a report as soon as possible, and making note of any errors you might spot. It’s also important to keep your eye on any joint credit card statements (before they’re closed).
- Open Your Own Accounts
When you first got married you probably made a personal decision about maintaining separate accounts or combining things jointly. If things are joint, Family Law Attorney Katie Kiihnl Parker notes it can be more complicated. “The biggest problem I see with divorcing couples is when the parties only use one checking account, whether the account is held in joint names or in the individual name of only one spouse,” she says. “This is especially a problem because a divorcing husband could remove all of the funds from the account or takes the wife’s name off the account, leaving the wife with no access to marital funds.” Now that you’re getting divorced — and for obvious reasons — it’s important to ensure you have your own established bank accounts and credit cards. Once you’ve got this set up, Parker suggests building an emergency fund that only you will have access to, “just in case”.
- Assemble Your Team
From property division and tax consequences to investments divorce can be complicated. Parker suggests bringing a financial planner on board early in the process. Who else might you need on this journey? A matrimonial/family law attorney (for obvious reasons) and a therapist/counselor (to help you survive the process).No one wants to face their marriage coming to an end — it’s an incredibly sad time. But if you’ve decided it’s the right decision for you it’s important to get organized and set yourself up for financial success as you begin your new journey.