Preparing for Divorce: Where To Begin
When ending your marriage is inevitable, make your first call to a Certified Divorce Financial Analyst®. A CDFA™ is an expert in the financial divorce process. She can guide you financially before you start your divorce and throughout the settlement process.
Even if you believe your spouse will be fair and want to do the “right” thing, it is wise to protect yourself and your family’s interests. If your spouse does do the “right thing” in settling with you, then nothing is lost by making these advance preparations. You will just be ahead of the usual divorce “things to do”. Consider collecting the following informational items as a way to safeguard your best interests.
Divorce Documents and Records Collection
It is never too early to start collecting copies of all your accounts and records. Start now so you have all the important information for future use. This information may not be accessible later on. Download our Divorce Document List for a comprehensive list of document copies. Not all of the listed documents may apply to you. Make copies only of the items that relate to your situation. Below is a sample list of documents:
- Bank Accounts: Checking, Savings, CD’s (certificate of deposit)
- Retirement Accounts: IRA, Roth IRA, 401k, 403(b), 457, pension
- Tax Returns: Preferably the past 3-5 years of returns. Transcripts available at the IRS website.
- Pay Stubs: Most recent 3-6 months with withholding detail
- Loan Accounts: Home mortgage, home equity loans/credit line, automobile, trailer, other
- Credit Card Accounts: Most recent and annual statement if available
- Insurance/Personal: Life, Disability, Medical, Long Term Care
- Insurance/Property: Home Owners, Umbrella, Automobile, other
- Home Details: Purchase price, unpaid mortgage, estimated value, number of years left on loan
- Frequent Flyer: Most recent Frequent Flyer mileage statement
Financial documents will be important when deciding division of assets and debts, spousal support, child support, and cash flow. Negotiations can be more effective and simpler if you have copies of the most current financial statements to support the discussion.
Some preliminary preparation for a divorce can reduce your frustration and anxiety. It may also save you from losing control of your finances. Preparation takes time. Begin by doing the following.
- Order your free credit report from each bureau: Trans Union, Equifax, Experian
- Check FICO credit score. There may be a fee for this.
- Apply for a credit card in your own name while you are still married.
- Remove your name from joint credit card accounts.
- Put a freeze on joint lines of credit.
- Avoid making large purchases that can add to your marital debt.
- Locate Social Security Benefit letters for review.
- Direct deposit your paycheck into a bank account in your name only.
- Open a post office box as mailing address.
- Keep your individual (non-marital) assets separate. Do not commingle.
Tax and Lien Discovery
There are numerous tax issues that arise during a divorce. Make sure that:
- No outstanding federal or state taxes are owed on your property, because both spouses are liable for taxes
- Property tax payments are up-to-date
- No liens exist on asset properties
Investigate this by checking with your state, local, and county government offices to verify there are no outstanding taxes due or property liens against you or your assets.