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6 Financial Steps to Preparing for Divorce in 2017

financial steps

Are you planning to divorce in 2017?

Take a look at our recommendations for 6 Financial Steps to Preparing for Divorce in 2017.

1. Keep an eye on the mail-box.

Every financial document that hits your mailbox in the month of January is worth your time. You should gather Bank and Brokerage account statements showing year end balances and the year end spending summary sent out by most Credit Card companies. You may also start to see tax documents being sent.

If you aren’t sure whether the document is pertinent to your Divorce in 2017, keep a copy anyway just in case. Financial knowledge will equal power for your Divorce in 2017. The more you can get now the more prepared you will be to advocate for yourself and obtain the most financially advantageous settlement possible in the new year.

2. Make copies of all financial files in your home.

This includes 5 years of tax returns, Brokerage and Bank account statements, business ownership documents such as partnership agreements and wills and trusts. Again, if you have any reason to believe the financial document will be important to your Divorce in 2017; you should keep a copy. It is always better to be over-prepared.

3. Educate yourself about your divorce options.

We believe most couples can resolve their differences outside of court. Make an appointment with a Wellspring Divorce Advisors advisor who will educate you about the process options available for your Divorce in 2017. Staying away from the court system will save emotional and economic resources and should result in a more advantageous financial settlement.

4. Consult with a lawyer or two or three or four.

Your Wellspring Divorce Advisors professional can refer you to many high quality divorce lawyers in your community. Concentrate your search on attorneys who specialize in Family Law. You wouldn’t go to your primary care physician for a tonsillectomy so don’t go to your real estate attorney for your divorce.

5. Develop a budget for your Divorce in 2017.

Divorce is hard on the checkbook. You will have expenses of two households, expenses to set up that second household such as furniture and furnishings. If you already have a family budget you can use this as a guide to start your individual divorce budget. If you don’t have one, begin by looking at the bank and credit card statements you gathered in steps 1 and 2.

First get a feel for the recurring expenses like mortgage and utilities then make estimates of discretionary expenses like dining out and entertainment after averaging a couple of months’ worth of real data gathered from the statements.Finding a way to maintain some level of a similar lifestyle during the divorce proceedings is not easy for most but this is a time for you to be comfortable, not feeling destitute.

Wellspring Divorce Advisors is experienced in creating budgets and available to assist clients in developing a budget for their Divorce.

6. Open a credit card in your individual name.

If you do not yet have a credit card in your name alone we suggest you apply for one immediately. It is common for one party to lose access to cash after filing for divorce. If you do not have cash you cannot pay the professional help you need to protect yourself in the divorce process.

Try Capital One for a good starting point. They usually provide good rewards such as airline or cash back on their cards as well as good size credit limits. Aim for $20,000 of total credit card limits. Be careful not to spend too freely on the cards and try to stick to just using them for professional fees if possible.

5 Smart Steps to a Divorce in 2014

  1. Keep an eye on the mail-box. Every financial document that hits your mailbox in the month of January is worth your time. You should gather Bank and Brokerage account statements showing year end balances and the year end spending summary sent out by most Credit Card companies. You may also start to see tax documents being sent. If you aren’t sure whether the document is pertinent to your Divorce in 2014, keep a copy anyway just in case. Financial knowledge will equal power for your Divorce in 2014. The more you can get now the more prepared you will be to advocate for yourself and obtain the most financially advantageous settlement possible.
  2. Make copies of all financial files in your home including 5 years of tax returns, any Brokerage and Bank account Read more

5 Financial Negotiation Strategies for Divorce

“What are 5 things people who are somewhere in the divorce process should think about?”

  1. Avoid deciding financial issues piecemeal instead of understanding the big picture.
  2. Do not allow your former spouse to use financial data as a weapon against you. The cost of divorce proceedings can be directly correlated to the amount of time and effort it takes to level the information playing field “discovery”.
  3. Budget, Budget, Budget
  4. Do cost benefit and risk versus reward analysis with your CDFA and attorney
  5. Understand that not all lawyers are skilled in resolving disputes. They are always trained to create and escalate them. Dispute resolution is a whole different world.

What are Benefits of Divorce Financial Planning?

You will learn about the ramifications of complex subjects such as separate vs. community property, valuing and dividing property, retirement and pensions, spousal and child support, the family residence, tax ramifications and insurance. You will

    • Understand the difference between separate and community property;
    • Understand how personal property, intangible and illiquid assets are valued and divided;
    • Understand Defined Contribution versus Defined Benefit plans versus Deferred Compensation plans and how they are valued and divided;
    • Understand the tax ramifications of Spousal and Child support including recapture and Child Contingency rules;
    • Understand the importance of security for support payments.