Divorce can be a very traumatic experience, wrought with powerful feelings that can seem overwhelming at times. But, as hard as this experience may be on an emotional level, there is much that needs to be done to ensure you protect yourself financially, and minimize the difficulties of this whole process.
Here are just a few financial tips for women going through a divorce.
Gather All Financial Documents
Do not delay in gathering all financial documents. Make copies of credit card statements, brokerage accounts, retirement funds, mortgage documents, insurance policies, bank statements and any other paperwork related to financials.
Cut Financial Ties as Soon as Possible and Establish Accounts in Your Own Name
Cutting financial ties with your soon-to-be ex as soon as possible is crucial. Cancel any joint credit cards, and close out any joint accounts, splitting the assets accordingly. Apply for a bank accounts and credit in your own name immediately. Up until a few years ago, the laws prohibited people from applying for credit based on family income, which put stay-at-home spouses at a significant disadvantage in obtaining their own cards. But, things have changed now, and you can use family income to get credit in your own name.
Check Your Credit Report
Your credit report will determine much of your financial future, and it is imperative it is accurate. Many people don’t check it as often as they should. I think there is an assumption that something with such great importance would be unlikely to have mistakes, but mistakes happen everywhere, including credit reports. You are entitled to one free report each year from annualcreditreport.com. Go over it with a fine tooth comb. You want to ensure there are no mistakes, nor that there are debts your spouse hid from you.
Start Tracking Your Expenses in a Journal
If you plan on seeking alimony or child support, at some point in the proceedings, there is going to be a discussion on how much money you should be receiving. This has the potential to get a bit heated, and the more detailed information you can provide about the financial needs of you and your children, the less drawn out the process will be, the stronger your case will be, and the more likely it is you will get the amount of money you need.
Start tracking all your spending in a journal. Make up a household spending plan to show to your spouse and attorneys. Note every penny. This journal will illustrate not only what you are doing right now, but what you have been doing for all those years you were married.
Accepting Valuations of Assets as Presented
One of the requirements of getting divorced is fully disclosing assets and their value. But, be careful about accepting these valuations without a second look. For certain assets, such as a business, valuing it can be a very complex process and it is easy to manipulate the information to hide its true worth. If your spouse has such assets, make sure all supporting documentation is submitted. If you have any suspicions, have an accountant or financial advisor go over the documentation.
All personal issues aside, remember divorce is ultimately a legal proceeding that ends a marriage, and a failure to take the proper steps, and educate yourself about what is happening, and what is required of you, can leave you with results that can negatively affect your life for a very long time to come.
While it is a very trying time for you, it is important to do all you can to keep your wits about you, and consider all your options. While going through the courts is usually the first resolution that comes to mind, there are other ways to go about getting a divorce, such as mediation, arbitration and collaborative divorce. Select an attorney with care because the role he plays in settling this manner to your satisfaction cannot be overstated.