Often, couples will spend 6 months to a year or more planning their wedding, and when they say their vows, divorce is the furthest thing from their mind. But unfortunately statistics show that about half of marriages end in divorce.
You might have spent a year planning your wedding, and 10 years getting financially entangled with your husband or wife. Disentangling yourself moneywise makes the process that much more hard to bear.
Splitting your assets and debts can be complicated, but the more you arm yourself with knowledge, the better your chances of reaching a fair settlement. Here is your divorce financial checklist:
Familiarize yourself with the finances: If you are the "out spouse" and your husband or wife is the family's financial CFO, you need to get familiar with all of the household's accounts, including the utilities, cell carrier, auto insurance and loans, mortgage and credit cards. If you don't have the account numbers and passwords, get them.
Gather financial documents: Once you have learned about all of the accounts belonging to you and your spouse, you need to make copies of all of these documents. This includes tax returns, bank accounts, mortgage loan documents, deeds, retirement accounts, etc.
Learn about your debt: If you have joint accounts with your spouse, for example, you're both on the auto loans and credit cards, you are both liable for that debt. Run a credit report on you and your spouse (with their agreement) so you can learn which liabilities are in your name and whether they are joint accounts.
Update your estate planning documents: Update the beneficiaries on accounts, such as bank accounts and life insurance policies so your children are protected. If your children are under 18, you can select a guardian who is not your ex.
Watch what you say, and to whom: Be careful about talking to people who handle your family's money and are obligated to inform your spouse about your conversations. It may be time to hire a new CPA, financial advisor, or accountant who only works for you.
Evaluate your joint accounts: If you're relying on joint credit cards, your spouse can max out the cards or close them. If your spouse is an authorized user, you can have them removed. If you are both on a credit card, you can ask the bank to freeze the account. This stops your spouse from running up charges for which you could have to repay.
Create a post-divorce budget: You need to create a post-divorce budget ASAP. At first, running two households is nearly double the cost of running one, so it often creates a financial strain for the family. Be smart about finding ways to reduce expenses while boosting income.
To learn more about divorce and finances, reach out to a Los Angeles divorce lawyer from Claery & Green, LLP for a free consultation!