4 financial steps to prepare for divorce

On Behalf of | Apr 28, 2022 | property division | 0 comments

When you are in the midst of emotional turmoil from a divorce, it may be difficult to think about finances. However, this is something that requires some careful consideration. The budget that you and your spouse used in the past now has to support two households, putting new demands on your resources.

U.S. News and World Report recommends several steps to protect yourself financially before and during your divorce.

1. Organize your financial documents

Sometimes one spouse bears more responsibility for the couple’s finances than the other. If you do not know much about the family’s finances, it can put you at a disadvantage during a divorce. Now is the time to educate yourself by obtaining copies of tax returns and making lists of accounts that you or your spouse own or that you control jointly. This can help you oversee and document your spouse’s use of marital funds.

2. Consider how much the divorce will cost

Divorce proceedings are expensive and are likely to cost more than you expect. Think about ways you might be able to reduce the cost, such as mediation.

3. Get a credit card in your own name

This is a step you should take before the divorce process begins. Divorce can result in financial chaos, which can make getting a credit card in your own name after the fact more difficult.

4. Talk to a human resources representative at work

Your divorce may impact your health insurance and other employee benefits. Talk to your HR rep to find out more about what the impact will be.

You should also find out what effect your divorce will have on your retirement accounts, which may be a question for your HR rep if your retirement plan is an employee benefit or a private financial planner if not.

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