Making the decision to divorce is not easy. While you may be certain that your marriage is over, you may not be sure what steps to take in order to prepare for your upcoming divorce, especially when it comes to preparing your finances. To help you enter the divorce process as safeguarded and protected as possible, here are 5 critical steps to protect your financial health.
1. Get Your Documents Organized: Your life, and the life of your attorney, will be made so much easier if you gather together your important financial documents prior to beginning the divorce process. Types of documents to collect are:
– Bank statements
– Credit Card statements
– Income tax returns (Federal and State) and W-2 forms
– Retirement account statements
– Paystubs for at least the last three months
– Appraisals for valuable items, if available
[See our printable Divorce Financial Checklist for a complete list of documents.]
2. Create a Budget Based on Your New Income: A reality of divorce is that incomes will inevitably change. When a couple separates, there are now two households that need to be financially supported. Begin to think about any new expenses that may crop up when the divorce gets started. Will you need to pay child support? Are you moving into a new place and will now be paying rent? Preparing in advance for the changes will help you envision what your financial future will be.
3. Get a Copy of Your Credit Report: It is good to know what your credit score is, so that you can plan for possible upcoming credit checks for items such as a new apartment. Also, it helps you keep tabs on your spouse to ensure that they are not dissipating marital assets or making inappropriate charges to joint credit cards. Monitor your credit report regularly and report to your attorney any unusual or unfamiliar loans or credit card charges.
4. Start Building Your Own Credit: It is possible for your credit score to drop once you are divorced, especially if you had a lot of joint accounts with your spouse. Open some new credit card accounts to begin to build your own financial credit history, independent of your marital credit history. [Get tips on how to repair your credit after divorce.]
5. Talk to Your Financial Professionals: While a qualified family law attorney is critical to informing you about your rights under New Jersey law, that attorney may not be an expert in accounting, taxes or estate planning. Seek out the advice of a certified financial planner to determine any possible financial implications during and after your divorce. If you do not have a regular financial advisor, your divorce attorney should be able to recommend someone whom they trust.
6. Keep a Paper Trail: If you and your spouse are able to discuss and make decisions about finances such as the division of joint accounts or the distribution of marital debts, you are ahead of the game. However, the process can be overwhelming, so keep detailed notes about conversations you have had with your spouse and be sure that any agreements that are reached are in writing and reviewed by your divorce attorney.
If you are thinking about filing for divorce and would like to know more about your rights and responsibilities during the process, please contact us to schedule your free consultation with one of our experienced and dedicated family law attorneys.