If you and your spouse have decided to end your marriage, you want to make it as smooth a property division process as possible during the divorce.
Planning ahead can help you avoid common financial mishaps. Here are four tips to help you prepare.
1. Pull documents together
Assembling the documents you will need to provide to your divorce attorney will take some time, so do not put it off. The basics will include:
– Credit card statements
– Retirement account statements
– Investment account statements
– Recent pay stubs
– Income tax returns (usually for the past three years)
– Lists of both separate and marital assets and debts
2. Track your expenses
Perhaps your spouse was responsible for most of the financial aspects of your marriage. However, tracking your household expenses will help you now and in the next stage of your life. Among other things, include information as to what you spend on household bills, food, clothing, childcare, health care and transportation. Remember that following the divorce, your income level will change. You may have to downsize and create a new budget. Learning about your current income and expenses will help.
3. Spend conservatively
The court frowns on frivolous spending sprees ahead of a divorce. Use your accounts as you normally do but refrain from spending more than usual or you could endanger your standing before the judge.
4. Avoid making big financial decisions
Any alterations in your finances will occur as part of the divorce process. Wait until the divorce is over to make changes to the beneficiaries in your will, retirement accounts or life insurance. Focus on a smooth property division process and step into your future with greater confidence.