Although many women pay the bills as one of their monthly chores, they are not always financially savvy on bigger issues such as mortgages, retirement plans and tax laws. To successfully navigate the divorce process and achieve financial stability for yourself and your children, you should:
- Collect and Copy Every Financial Document. Start with your checking and savings accounts, and if you use online banking, print at least 2 years’ worth of monthly statements. Also make a copy of the mortgage documents, insurance policies, tax returns, and other documents related to your finances. Make copies of 401(k) statements and other retirement accounts, and don’t forget those from past employers (yours and his) that are still funded.
- Get a Copy of Your Credit Report. Learn your credit score, and take necessary steps to improve it, if necessary, as it will significantly impact your future mortgage and loan opportunities.
- Make a List of all Assets and Liabilities. Write down everything you can think of because most assets and liabilities accumulated during a marriage are community property. If a joint debt goes into default after a divorce, you are both responsible regardless of whose actions caused the problem.
- Closely Monitor and Manage Joint Accounts. You need to know if money is disappearing from these accounts, or if your spouse is using a joint credit card to fund a get-a-way with his new friend. This information is important, both to document initial balances and to understand who did what in recent months.
- Open Accounts in Your Own Name. Open a checking and savings account in your own name, and possibly your own credit card as well. Consider using a bank that neither you nor your spouse has used in the past to assure anonymity.
- Create a Budget. This process allows you understand your current expenses and can help during settlement negotiations since it documents your monthly outlays. Also use the budget to evaluate your spending habits. The sooner you reduce or eliminate unnecessary spending, the better your financial situation.
- Understand the Financial Implications of Various Assets. Before you accept the $500,000 home in lieu of a $500,000 retirement account, take time to understand the short and long term tax implications of your choice, so you can make the best decision for your situation.
Damien McKinney, founding partner of the McKinney Law Group, is a divorce attorney Tampa FL turns to who understands the challenges you face, and can help you navigate this process. Please contact us so we can assist you in moving forward with your life.
Thanks to our friends and contributors at the McKinney Law Group for their insight into divorce.