Identify all the documents that you will need. This includes bank statements, credit card bills (pay them only the minimum amount since divorce proceedings can take months and it only takes one late payment to hurt your credit score), and retirement plans.
Make sure you have health insurance and set up a new bank account that is in your name only. Also, find a place to stay.
Documents to Collect
If you and your spouse are separating, you should prepare to obtain copies of all financial records related to your marriage. This includes past tax returns, current bank accounts and check registers, investment statements, retirement account documents, employee benefits handbooks, family trusts, credit card information, and all other records of joint assets and liabilities. This should also include documentation of your employment, if you are both salaried employees.
You should also make a list of personal items that are only yours or belong to you separately, such as art, jewelry, family heirlooms, and photographs. This list will be used to determine who gets what property during the divorce process. You should also consider how your property might be divided if one of you suffers an illness or accident. It is important to have a list of assets and liabilities ready for your attorney, so they can help you come up with an equitable agreement that works best for you.
It is a good idea to open a bank account in your name only before filing for divorce. You can do this by visiting your local bank and asking to open an account. This will allow you to easily track your income and expenses, especially if your spouse is paying you any alimony or child support payments.
Some spouses are very secretive about their finances and may hide bank statements or other information. If this is the case, it will be difficult for you and your attorney to determine what you might be entitled to during the divorce settlement. You should prepare an inventory of all items you own, including your investments, valuable personal possessions, real estate, living expenses, debts, and any other assets. You should also examine your lifestyle and calculate your total net worth.
You should also gather any legal documents that pertain to your relationship with your spouse, such as power of attorney forms and health care directives, and a will or advance medical directive. If you own any businesses, you should have company records and accountings. If you do not have a will, you should consider preparing one as soon as possible. It will be easier to find and obtain these documents before you begin the divorce process, rather than during a stressful and emotional time.
During the divorce process, it is important to understand all of your assets and debts. This will allow you to make an informed decision about how your assets and debts will be divided during the divorce settlement negotiations. It will also help you prepare for your life as a single individual and set a firm financial foundation moving forward. You can start by making a list of everything that you and your spouse own. This should include your home, any joint financial accounts, vehicles and other large items that you own. You should also include smaller things like artwork, inheritances and pension plans. Getting a credit report is another good idea as it will give you a clear picture of all outstanding debts.
You should also make a list of all the debts that you and your spouse owe. It is usually a good idea to separate all your individual debts from the marital ones. This will ensure that you are not responsible for a large portion of your spouse’s debt after the divorce. It is also a good idea to determine what you can afford to pay on a monthly basis. This will give you a baseline for your expenses when you move out and go from dual incomes to a single income.
It is important to discuss this information with your spouse in a neutral location if possible, such as a coffee shop or park. It is also recommended that you do this on a day when neither of you has any other commitments. When preparing to discuss this with your spouse, try to be open and honest about the situation. This will make the conversation less contentious and more productive.
If you have any items that are extremely valuable to you, consider renting a safe deposit box. This will protect them from being lost, stolen or destroyed during the divorce process. You should also consider lining up a bank account in your name only. This will be especially helpful once you get a divorce and you will have to transition from having joint accounts to a single account.
The more information you provide to your attorney about the assets that you and your spouse own, the more efficient your divorce will be. This includes all properties, possessions, accounts and investments. This also extends to heirlooms and even personal property, such as a vintage sports car or a Chanel lambskin purse.
Some of the most complex divorce assets are retirement investments and pensions, such as 401(k)s and IRAs. These assets require specific paperwork and reporting, and they may be subject to market fluctuations that impact their value. Other types of investments, like real estate and private equity funds, can also have a significant impact on your overall financial picture in a divorce.
Another common issue is that a divorcing couple can get emotionally attached to certain assets and may struggle to make rational decisions about dividing them. This can lead to disputes, especially if one spouse is reluctant to sell the home they’ve lived in for years or is determined to keep a prized piece of artwork.
While some spouses may be tempted to purchase expensive items on the eve of divorce, such as a Chanel bag or new car, doing so could cost both parties thousands in legal fees. This is because a judge could rule that the spouse engaged in dissipation, which is when the opposing party wastes marital assets on a non-essential or luxury item that can be considered a breach of contract or unfairly enriches themselves.
During a divorce, both parties are prohibited from “transferring, encumbering, concealing, assigning, removing or in any way disposing of” assets. In addition, spouses should avoid revealing any information about the other party to third parties or engaging in behavior that could escalate conflict, such as criticizing their spouse in public or spreading false information about their partner.
Finally, both spouses should take the time to understand different types of assets and how they’re valued. This can help prevent misunderstandings during the property division process. It is also recommended to invest in a credit report, as this highly detailed report will assist you in documenting your current debts and liabilities.
One of the most complex issues that must be resolved in a divorce is child custody. This includes both the right to decide where a child lives (physical custody) and who has the legal right to make decisions about the child’s upbringing (legal custody). The parents may share both, or one parent might get sole physical custody.
The judge making the decision will look at a number of factors to determine what is in the best interests of your children. These might include your parenting abilities, whether you have a good relationship with your spouse, the physical health of each parent and other important things. It’s often helpful to work out a parenting plan with your spouse before filing for a divorce. This can save time, money and stress.
If the court is deciding custody issues in a contested case, the judge might need to consult an expert witness. This is usually a psychiatrist, psychologist or social worker who interviews the parties and any other significant people in the child’s life and submits a report to the judge. Depending on the state, the expert’s testimony may be required to resolve the case.
In some cases, non-parents can request custody. This is sometimes called third party custody or guardianship. It requires filing a petition with the courts and undergoing background checks, home inspections and interviews. The judge will consider the petition and make a determination about the best interests of your children.
During the process, it’s important to avoid badmouthing your spouse in front of your children or forcing them to choose sides. This can backfire and cause the court to decide you are engaging in parental alienation, which could negatively impact your custody case. It’s also a good idea to keep a record of all financial transactions and assets. You’ll need this information to prepare your finances for the divorce settlement. You should also avoid hiding assets because there are laws against this and forensic accountants can uncover hidden assets. The best thing you can do to protect your children’s well-being is to stay focused on your own personal and family needs and be a positive role model for your children.