What do you need to know if a divorce is possible in your future? Regardless of which path your relationship goes, here are seven helpful tips to be aware of:
1. Seek the RIGHT Advice for YOU
Not all advice is best for your situation. Relationships are different, and all divorce experiences are unique. Be sure to take friend's and family's advice with the grain of salt. Not all divorce professionals are aligned with your priorities regarding your changing relationship with your spouse and therefore what you need. Some attorneys excel at litigating divorce which can cause more conflict yet provide the highest level of protection for those who require that level of representation. Make sure to research divorce methods, the pro’s and con’s of each option, and what is best suited for you before moving forward (refer to Divorce Methods & Options here). Research and interview qualified professional who align with the method that best suites you and provides the qualified services you require. The following are a list of professionals available to help you:
2. Gather and Organize Financial Information
Regardless of where your future is headed, it is extremely important to be aware of your finances. If at all possible, locate financial documentation titled in either you or your spouse’s name. The more organized you are, the more you will be able to utilize time with professionals, know what should be monitored and move forward more easily if things progress. If things do not proceed to divorce, you will now be a more informed and accountable partner.
Here is a list of items to prepare:
Business Statements (assets, debts, income and expenses)
Retirement Account Statements
Investment Account Statements
Private Investment Contracts
Debt Statements (credit cards, car loans, mortgages, student loans, etc)
Pay Stubs or other income documentation (W-2s, 1099s, check copies, etc)
Income Tax Returns (past 3 years)
List of assets and debts brought into marriage (and respective values at the time)
Business Balance Sheet and Profit and Loss reports
Credit report (to ensure all debt is accurate and protect sources)
Other additional documentation maybe required as your case moves forward. If you do not have access to this information and a divorce is initiated, your spouse will be court ordered to provide you with all financial information.
3. Establish a Separate Bank Account and Credit Card
In the event you and your spouse are not seeing eye to eye and you require funds to hire an attorney or make a deposit on a new living arrangement, it is critical to have funds available to access either through a checking account or available credit. If a spouse has already filed for divorce it is important to make sure to disclose any new accounts to your spouse and it’s purpose to provide transparency. It is never advised to open an account to try and hide money. Seeking legal counsel before making these changes is always recommended.
4. Track Current and Future Anticipated Expenses
Understanding your current financial obligations (expenses) versus total household income will help you and your support team map what you need in the future. Staying current all debt and expenses during this time should be a high priority even if it means only paying required minimums. Minimize expenditures as best as possible to prepare for additional expenses such as professional fees and alternative housing costs.
5. Set Priorities & Establish Boundaries
Everyone hopes for an amicable divorce. The reality is that sometimes as much as we try to keep things cordial, sometimes escalated conflict is out of our control. It is important to start with firm boundaries and be willing to compromise. To avoid getting stuck on one issue, be aware of your priorities regarding the divorce and refocus often (write down your priorities on the Priority Worksheet here). It helps to do this at the beginning before arguments heighten.
6. Do Not Make Big Financial Decisions
It may be tempting to sell an investment to raise cash or purchase a new home to solve short-term needs while the divorce is pending. However, making big decisions before knowing the details of the largest financial transition in your life and how it will affect your future, is extremely risky and very challenging logistically – in other words, a lot of room for errors. If a spouse has filed for divorce, making significant financial changes that are not approved by your partner may be grounds for contempt of court.
7. Stay Calm
Emotions are known for taking over, pushing couples into divorce and heightening both conflict and costs during the process. If you have been going to marital counseling and continue to feel like you are not making the progress you need, it may be time to consider a different type of counseling. Discernment counseling helps you determine if you want to move forward with a divorce. If you or your spouse make the decision to divorce, a divorce coach can help you keep your emotions in check during the process, weigh various options, improve communication and create a well thought out plan for telling your children if applicable.
Remember that once a divorce is final, agreements can be significantly harder to change, if at all. Surround yourself with friends and family that will help support you through the process and hire professionals that are best suited for you and your changing family.
It is possible to plan for a smooth financial transition today that leads to a stronger tomorrow. Contact Amy at A.M. Financial for all of your Denver Divorce Financial Planning needs.
Disclosure: Divorce transition/financial planning services offered by A.M. Financial. Investment advisory services offered through WealthSource Partners, LLC ("WSP"). A.M. Financial and WSP are independent and unaffiliated entities. The statements and opinions expressed are those of A.M. Financial and Amy Mahlen and do not represent the views and/or opinions of WSP or any other associated or affiliated person of WSP. Furthermore, the statements and opinions expressed are for informational and educational purposes only and should not be construed as legal, tax, accounting or investment advice. All statements and opinions are current only as of the time made and are subject to change without notice.