Divorce Prep 101: Steps to Take Before Telling Your Spouse

There are a few steps to take before telling your spouse you want a divorce to ensure you’re prepared to start the process.

Be Proactive:  Start collecting all financial statements and records, including previous years tax returns.  Make sure you have access information, i.e. login and passwords, to all accounts.  Start watching bank and credit card transactions in order to be able to spot any red flags once you tell your spouse.  If any red flags appear, you may need to bring in a forensic accountant.

Create a Budget: Start by looking at spending over the previous 3-6 months.  This will give you a baseline for what goes out each month and line items for your budget.  Once you’ve got this, make a budget for post-divorce.  You can estimate future expenses based on past expenses and be sure to add any additional expenses of splitting the marital property and responsibilities.   And know that the budget you create is never set in stone.  It is a living, breathing document that should reflect your current needs. 

List Assets and Liabilities: Start a list of all financial accounts, assets and liabilities.  Don’t forget retirement accounts and any tax liabilities.  From this list you will gain perspective of what your post-divorce financial situation could look like. You can also start thinking of property division and have some ideas going into the divorce process. It helps to list what items are individual and which are joint, marital and separate.

Pull Your Credit Report: A large majority of financial decisions and access to credit is based on your FICO score.  Once you pull your free annual credit report at www.annualcreditreport.com pay the small fee to reveal your score. If you find your score is low, start taking steps to repair your credit. 

Hire Help: Hire a CFDP®  (Certified Financial Divorce Practitioner) to help with assess your current and post-divorce financial situation and a CPA (Certified Public Accountant) to assess the tax implications. Each can help you minimize the total taxes you and your spouse will have to pay during separation and after the divorce. 

Consider Mediation:  Mediation gives you the space to have your voice heard and provides more flexibility that a typical adversarial divorce.  You have more control over the process and issues, creating a divorce settlement that reflects your specific family and needs. Also, mediation can save you thousands of dollars in fees.  Just know that both spouses need to agree to this route, as mediation requires the input of each party and a willingness to participate in decision-making.

8 Steps to Cope with Financial Uncertainty and Divorce

8 Steps to Cope with Financial Uncertainty and Divorce

We’ve all heard that money is the number one reason for divorce.  Even if it’s not wholly accurate, finances can strain a marriage and negatively affect children.  Here are some tips in coping with financial uncertainty and divorce.

Educate yourself: Though it may seem overwhelming, sit down with the details of your finances.  If it is too difficult to do alone, have a Certified Financial Divorce Practitioner (CFDP) or other financial professional look at the numbers with you. Educating yourself is the first step to assessing your situation and looking for solutions.

Communicate to your children: Make sure to not skirt the situation, but also be reassuring.  You should give age-appropriate information without overwhelming with unnecessary details.

Focus on what you can control: Focusing on what you can’t control can lead to a feeling of hopelessness. Find small steps you can take to tackle your financial situation.  If you are unable to figure out where to start, a financial professional specializing in divorce financial planning can help.

Slow down: It is natural to want to get through a stressful situation as quickly as possible, but don’t make any hasty decisions.  It is important to consider all implications before making a decision that will affect the financial future of your family. Take time out to think things through and weigh all options.

Prioritize decisions: There are some decisions that will need to be made right away, such as where to live while others can wait, such as a career change.  Give yourself permission to wait on those that can and focus on the most pressing issues first.

Remember your health: The stress of divorce can lead to changes in eating, sleeping or exercising. Be aware of how stress is affecting your mental and physical heath and give yourself a break.

Stay positive: It’s easy to get bogged down in the negative feelings associated with the end of a marriage.  Don’t get distracted by these feelings and try to focus on the positive.  Yes, there is positive! Use this as a learning experience and focus on your positive qualities that are allowing you to conquer this situation. Staying positive will allow you to see a hopeful future and you’re more likely to move toward it more quickly.

Reach out: Don’t do this alone.  Surround yourself with professionals you trust and friends and family that support and energize you.  Choose those who truly listen to you without judgment. This is also a time to cultivate new relationships and make an effort to meet new people.  Join a club or group, take a class or volunteer in your community.  You’re bound to feel invigorated while focusing on something other than the divorce.

Nicole established the Denver Divorce Mediation Group, LLC and became a CFDP® after having experienced a divorce herself. She saw how difficult it was to make important financial decisions while overwhelmed with the emotions that come with divorce.  As a divorce financial planner and mediator, she has helped hundreds of couples move through divorce and gain control of their financial future.