A checklist for understanding your finances before divorce

On Behalf of | Sep 30, 2016 | Divorce

Finances may be the last thing on your mind when deciding that divorce is your next step. Planning can be especially daunting if your spouse typically handles monthly bills and investments. It is important to double check the details of your joint finances before moving forward with divorce.

1. Be aware of all debts owed

The mortgage is typically the first thing considered when assessing debt. You should not forget about unpaid credit cards, vehicles and loans. It will not matter whose name is signed on the title – if the property was bought during marriage is up for equitable distribution in a divorce.

2. Check your credit

It is important to find out where your credit stands with a free online credit report. If you are in good standing with your credit score you will want to protect it. Make sure to close any joint accounts as soon as possible, and set up separate spending accounts to limit any damage to your credit.

3. Plan for separate living expenses

It is easy to forget that cohabitation cuts the true cost of living on your own. When you plan for separate spending accounts, now is the time to make sure you have enough to support yourself in the future. You should plan for moving expenses and time off work. Next think of monthly living costs such as the average cost of renting in your area.

4. Find proof of income

If you are not staying on top of your spouse’s position changes or yearly raises, you may not be sure how much they make. When speaking with your divorce attorney, they will ask for proof of income from both parties. Find a current pay stub for both you and your spouse to get ahead of the game.

5. Understand your investments

Make sure you know where your joint investments lie and whether or not it is a good time to discuss moving those investments. One of the biggest problems during the divorce process is getting cash quick for separate living arrangements. Now might be the best time to sell large investments such as trusts, stocks, and properties.

6. Dig Up Old Tax Returns

Get ready to do some digging for individual and business income tax returns for the past three to five years. Getting a head start on finding these documents will make your process much easier.

7. Look up pension or retirement accounts

Do you or your spouse have a pension, 401K or retirement savings accounts? Couples who are established in their careers typically have acquired some money for their retirement. Even if you have not discussed details with your spouse, it is important to understand where you have money set aside and how much.

8. Find receipts for pricey items

How much did that expensive painting in the living room cost? What about the new home entertainment center? It will save you a major headache if you can find proof of purchase for the pricey items that you have bought separately or together.

If you are facing an upcoming divorce then having an experienced attorney at your side can be essential. Contact an attorney right away to help get everything in order.