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.
