There are nearly one million divorces a year in the United States alone, involving billions of dollars of asset division and financial settlement arrangements. Oftentimes, when an individual is faced with a divorce, the thought of so many changes occurring so quickly can make anyone want to hide his/her head in the sand. However, finances and the financial dissolution of your marriage should be placed at the top of your “to do” list and considered the most important “action item” of your divorce.
It is critical that no matter how you feel emotionally about your divorce, that you “keep your eye” on the financial “ball” so to speak. Your financial security is at stake. Remember that old saying, “if you can’t take care of yourself, then you can’t take care of anyone around you.” This is particularly true regarding financial considerations, especially for spouses with children.
First and foremost, create a reasonable budget for yourself and your children (where applicable). This budget should be based on your pre-marital lifestyle. At this juncture, you should also identify all of your liquid assets (an asset that can be converted to cash fairly easily), expenses and sources of income. Liquid assets may include your home and other properties, cars and other vehicles, as well as your bank, securities and some retirement accounts. Tax considerations will also be evaluated, particularly regarding capital gains and the potential sale of assets.
You do not want to begin your new life with bad credit or cumbersome debt if at all possible. A credit report will identify any credit problems and any accounts of which you might not have been aware. Make sure that you collect at least the last five years of your personal and business tax returns, checking and savings account information (including your children’s), expense accounts, brokerage statements, and the like. Collecting all of this information can be daunting and burdensome; however, your financial well-being is in the balance so make this initiative a priority.
Because finances are at the core of most marital dissolutions, it is important that you remain focused on finances throughout your divorce. Retain a proven divorce attorney who understands asset valuation and property division, as well as the many tax and other considerations that will make up your final financial settlement. If you suspect your spouse is hiding assets, consult your attorney regarding a possible action plan to address this problem. Your livelihood is on the line, so approach the financial aspects of your divorce head-on in order to avoid costly financial mistakes that will impact your future.