How To Prepare for Divorce Financially

Knowing how to prepare for divorce financially amidst all the emotional turmoil is challenging for most people.  You want to protect your assets, ensure a smoother legal process, and establish stability when transitioning to a single income.  However, you may have questions about how to accomplish these goals.

Keep reading to learn ways to prepare yourself for your financial future post-divorce.  The knowledgeable team of attorneys at Colwell Law Group put together this information to help you prevent unnecessary financial losses.

What Is the First Step Toward Financially Preparing for Divorce?

While you may feel blindsided by the emotional toll of divorce, do not wait to take proactive steps to preserve your wealth as much as possible.  Following this advice may make all the difference.  It is important that you:

• Gather income statements:  Put together a file with three (3) years of tax returns, recent pay stubs, and six (6) to 12 months of bank and retirement account statements;
• Inventory assets:  Make a comprehensive list of all joint and separate property, such as inheritance and pre-marital assets;
• Compile debts:  Jot down another list of your joint and separate debts, and include statements of all credit card, loan, and mortgage accounts.

In short, the first step in preparing for divorce is gathering documentation of your own and your spouse’s financial situations.

Establish Your Financial Independence

The second step in getting ready for divorce is establishing financial independence from your spouse.  Doing so is not about trying to bypass the state’s equitable distribution process.  The intent is to prevent your spouse from emptying joint assets and to ensure you have the funds to cover your living expenses.

Open a bank account in your own name and establish credit, especially if your name is on joint cards.  Then, create a post-divorce budget by evaluating your expected income and expenses, but do not forget to set realistic goals for support and asset division.  In New York, the spouse with greater financial resources often pays the legal fees, but you should set aside funds for this expense regardless of which of you has greater resources.  The next step is to update your will, power of attorney, and beneficiaries on insurance policies as soon as possible.

Mistakes That May Affect You Financially

Understanding what financial preparations are necessary to take before divorce also involves knowing what not to do.  A key mistake to avoid is attempting to hide assets.  Doing so may lead to severe penalties from the Court, and the goal here is to preserve your wealth, not pay hefty fines.  Do not deplete joint accounts either, or buy luxury items before the divorce is final, as you do not want the Court accusing you of wasting assets.

It is also important not to sign a separation agreement or leave the marital home before you have obtained legal counsel.  Both actions are mistakes that come with lasting consequences and may impact custody and property rights.

Call Us To Learn About Important Ways To Financially Prepare for Divorce

Now that you have a basic idea about how to prepare for divorce financially, reach out to our skilled attorneys at Colwell Law Group.  Your future matters, and our compassionate team understands what counts.

Contact one of our Upstate New York offices close to home and schedule a consultation today.  We are available 24/7 to better serve you.