If you are getting ready to go through divorce proceedings, you are going to want to financially prepare. If you are the non-moneyed spouse, the individual who makes less money and lacks control of marital finances, preparations for a divorce will look very different than if you are the moneyed spouse. Sometimes the breadwinner does not control the finances; however, this is usually not the case. If this is you, you are going to want to carefully prepare your finances to get through the divorce proceedings and the separation smoothly. Here’s what you should do.
Gather your financials
Regardless of who you are within the relationship, the very first thing you will want to do is gather your financial documents. Once a divorce is filed, you will have to disclose any and all information regarding your finances. This generally means that you will have to disclose at least a couple years of tax returns, several months of bank and credit card statements, and bank account histories. If you own a business, your business’ financial history will have to be disclosed as well. In addition, you will have to disclose any prenuptial agreements, property deeds, retirement account statements, pay stubs, your 1099, W-2, K-1, etc..
Although the courts will demand access to this information upon filing for a divorce, your attorney will need access as well. The sooner you get your hands on this information, the more readily prepared you will be for the divorce proceedings. When gathering your documents, it is important to remember that you will need at least several months if not several years of records.
Especially if you are the non-moneyed spouse, getting access to financial documents can be difficult. I once had a client drop off little bits and pieces of her financial documents over the course of two years because she had a hard time getting access to these resources. If you are the one leaving the relationship, file for divorce once you have obtained all of these records or photos/copies of the records. This will help you avoid having to send out requests to produce and motions to compel the information to be disclosed to you if your ex doesn’t follow the original order.
In general, the more you can get your hands on the earlier- the more prepared you will be. If this is something you are finding impossible to do on your own, don’t worry as it will all be disclosed once the case gets started.
Understanding Your Lifestyle and Tracking Your Expenses.
If there is going to be any kind of a claim in regards to alimony, support, or child support, your lifestyle and monthly expenses may become an issue. It’s really important that you have a good sense of your spending. You are going to want to keep track of anything from mortgage, taxes, insurance, electricity, utilities, to dining out, pet expenses, gifts, tuition, vacations, child expenses. You will basically want to keep track of every dime that you spend within a given month so that you can come up with a comprehensive overview of your lifestyle. Some people will need to hire forensic accountants for lifestyle analyses but if you have already done a bulk of the work, you will save yourself up to thousands of dollars.
Access to Cash
Although your lawyer can potentially file for temporary support until the divorce is finalized, it usually takes quite some time for that support to get into your hands. It will be important to ensure you have access to cash prior to filing for a divorce. Your spouse may continue to deposit money into your joint account or continue to give you access to credit cards; however, they may not. Especially if you are dealing with a narcissist or another difficult personality, you will want to prepare for them to cut you off financially.
If you can set yourself up to have at least a few months worth of access to cash, you will be in the best possible situation for the worst possible outcome that may occur during the divorce proceedings. If you don’t have a way to stash cash personally, it may be beneficial to reach out to trusted family members or friends for a loan until your lawyer can hopefully get whatever finances you are entitled to back into your possession. If you are hiring an attorney, you will also want to save up enough money so that you are able to do so.
Prepare Any/All other Legal Documents
Prior to filing for a divorce, you are going to want to make sure that any trust documents/wills state exactly what you want them to. You will want to make sure the beneficiaries on any IRAs are correct, etc.. Once you begin the divorce proceedings, you will most likely be unable to change any of these things. Depending on the jurisdiction you are in, there may be a standing order issued that precludes individuals from any big changes. This includes putting property on the market or changing statements in a will and/or trust. Definitely make sure all of this is in order prior to your divorce proceedings. Definitely talk to your attorney about this topic to ensure you are taking every measure to protect yourself.