No matter the reasons or the circumstances, ending a marriage is a life-changing event. Divorce affects not only your legal status but also your property holdings, your financial well-being and your parental rights if there are children of the marriage. It becomes more complicated — and expensive — if there are contested issues such as alimony, property division or child custody and support.
Some careful advance planning can greatly ease the divorce process. Here are some useful tips on how to fortify yourself for the challenges in store:
- Consult with a lawyer — Even if you expect your divorce to be uncontested, there may be financial and/or parenting issues to resolve. Speaking with an experienced and skilled divorce attorney can give you a firm understanding of the legal requirements for divorce and of how to protect your rights and interests.
- Establish financial independence — If your bank accounts are jointly held with your spouse, open a new account in your name and move some of the joint account’s funds there. You can use the new account to pay your expenses and deposit your income. Update direct deposit instructions to make sure the funds go to the new account. Similarly, update any automated payments that are your responsibility. Consider getting your own credit card if you don’t already have one.
- Gather your records — Collect and organize all your documents relating to your income, assets and debts. These include bank statements, investment account statements, real estate deeds, mortgages, vehicle titles, purchase receipts and other proof of property ownership. Figure out what you own as a couple and what either of you owns as an individual. This information will be critical in the division of assets, known as equitable distribution.
- Quantify your debt — Determine what you owe to creditors individually as well as how much you owe jointly with your spouse. Like assets, marital debts are divided during the equitable distribution process. Your home mortgage, for example, is likely a marital debt while your student loans are individual ones.
- Calculate your individual and joint income — Figure out how much money you and your spouse currently derive from all sources, including wages, interest, investments, rents and retirement or pension accounts. Your respective incomes will figure into the financial issues ahead of you, which may include alimony and child support. Collect records of these earnings, such as pay stubs, bank and brokerage statements and tax returns.
All of this information and documentation is vital to the divorce process and to planning your finances as an unmarried individual. Divorce will also have an impact on your estate planning decisions.
At the Henry Law Firm P.A. in Overland Park, Kansas, we are experienced in counseling clients on achieving and maintaining financial stability while dissolving their marriages. Call us at 913-381-5020 or contact us online to schedule your consultation.