Even when divorce is in your best interest, it will still have an impact on your life. Along with the emotional effects, divorce can also affect you financially. That is why you must go into the process with a plan in place to protect and preserve your financial outlook.
U.S. News & World Report suggests the following tips to assist you during each stage of your divorce. That way, you can rest assured you are fully prepared to start anew once the process is complete.
The first step is to take an inventory of assets, both individual and shared. If your spouse is not being forthcoming about their finances, consult previous years’ tax returns for insight. These documents often point to things like hidden property or undisclosed income, which must be a part of the division process when considered marital property. Put off any big purchases or financial investments until after the divorce is complete. You want to make sure you are financially sound enough to take these steps, or you could be looking at massive debt.
Track your spending, so you have a fair idea of your budget. This will help you establish independence once you are on your own. Document money taken from shared bank accounts for both you and your soon-to-be ex spouse. For example, if your spouse withdraws a large portion of shared savings, it could impact their standing in court. Open a new checking and savings account in your name and begin channeling your earnings into them.
Review estate planning documents and life insurance policies, and make updates as needed. For instance, if your former spouse is still named within these documents, remove them and replace them with your children or other loved ones. Stay vigilant about any financial agreements developed between you and your ex. Child and spousal support are court mandated, which means non-payment can be a serious issue.
While divorce is stressful for all involved, the right planning can make it much less so. You can also consult with the court or your attorney if your ex is ignoring court orders, whether they involve finances or child custody and visitation.