Preparing Your Finances for Divorce
A plan is your best protection.
Our two cents
Divorce is difficult on many levels, but with some forward thinking, finances don't have to be.
Start by scheduling to meet a divorce attorney. You'll want to learn the requirements for obtaining a divorce in your state as soon as possible. When you meet, discuss your overall financial situation, including options for dividing your assets and any concerns you may have about alimony, child custody and child support. Also gather and review important documents before your initial meeting, such as:
- Prenuptial agreement
- Estate plan documents (will, trusts, etc.)
- Personal net worth statement with banks, brokerage and retirement account statements
- Monthly bank account statements
- Business financial statements
- Monthly income(s)
- Insurance policies (such as life, health, auto, homeowner's or renters)
- Tax returns for the past five years
- Mortgage or home equity loan statements
- Outstanding bills or obligations
- Real property deeds and motor vehicle titles
- Inventory of household goods, personal belongings and safe-deposit boxes
You'll also want to start thinking about how best to divide retirement account assets and how that will impact your future finances.
Our financial inventory worksheet will help you focus on the information you need.
Establish your own credit
Make sure your name is listed on all household accounts and investments.
If you don't already have at least one major credit card in your name only, open one immediately. This will help you establish your personal creditworthiness—an essential once you're on your own.
Learn more about managing credit and debt.
Realistically review your finances
Start by listing all income and expenses to see where you stand financially. Then decide what you need to support yourself and any dependent children you may have. Be sure to do the following:
- Calculate what you'll need for monthly living expenses.
- Project childcare costs and tuition expenses.
- Think about other big-ticket items such as orthodontics or extracurricular programs.
- Plan for college costs.
Our monthly budget planner can help you make realistic calculations.