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Basic Finanacial Steps To Take When Facing Divorce

Basic Finanacial Steps To Take When Facing Divorce

Basic Financial Steps in the Face of Divorce

Ironically, the most important time to be clear-headed and smart is usually the same time you are trying to dodge the rubble of your crumbling marriage. Hopefully, you have a good lawyer to steer you down the right path, but it can be overwhelming to deal with all of the issues divorce brings without being sent over the edge.

If the divorce is not a surprise, and you have time to prepare, use it to your advantage and be smart about your finances and documents. Taking the time to reason clearly and craft a plan will help you in the long run.

Firstly, it is imperative to think clearly and calmly. A time when you are reeling from a hit is not the time to make important life decisions. While you lick your wounds, gather your paperwork for your attorney/CPA. And by paperwork, we mean every single document you have on paper. This means documents that address money markets, 401(k), pension statements, certificates of deposit, checking accounts, etc. These papers will verify the value of each asset you hold as a couple and you hold individually. If you can, get your spouse’s documents; if not, they will be providing them soon enough for discovery.

Second, take the time now to budget for the new you. Make sure your finances will allow you to ease into the new you. While expenses will go down, income will also most likely decrease. Figure out where to save and how you will approach your new financial situation… and start living by the budget as soon as you’re finished making it.

Then, make sure nothing will terribly hurt your financial standing. Most people are blind-sided when they find out their spouse is filing for bankruptcy, but the truth is that bankruptcy and divorce go hand in hand more often than you would expect. In order to avoid backlash into your own financial stability, make sure that you and your soon-to-be ex-spouse divide your bank accounts. If you have joint bank accounts, separate them. If you are an authorized user of your spouse’s card, remove your name (and vice versa).

Finally, think about revising your estate planning documents to reflect the change in your life. Change your beneficiaries and designate new carriers of power of attorney in order to make sure you would be legally protected even in the case of incapacitation or death.

Here is a useful checklist for separating finances:

– Gather copies of tax returns; request credit reports
– Close joint credit card accounts and other lines of credit
– Pay off household expenses from joint bank accounts; close accounts, and transfer funds into individual accounts
– Consider selling the house to get it out of both your names. Or, refinance it and put it in one person’s name
– Check to see if you overlooked any assets such as frequent flier miles, club memberships, vacation pay
– Update your will and other documents
– Revise your budget and consider hiring a financial planner to handle long-term plans if you have not already done so

At Coleman Legal Group, LLC – our divorce and family law attorneys have extensive experience helping clients deal with complex and routine financial issues when facing divorce.  Call us at 770-609-1247 to speak with a divorce and family law attorney about how we can help you.

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