Know Your Finances

In many cases, only one party to a marriage knows the complete financial picture of a marriage. That means that only one person really knows the assets and debts of a marriage.

While you still have access to this financial information, gather up bank statements, checking account information, savings account information, retirement account statements, 401(k) statements, pension information, etc. Also gather up information about loans, mortgages, credit card balances (with account numbers) and other debts.

Be sure to grab your real property deeds and deeds of trust, last two years of tax returns, last six weeks of paycheck stubs for both parties and any other records you deem necessary.

If you do not have some of the necessary documentation, do not worry. Much of the information you will need can be obtained later.

For example, you can get copies of your deed and deed of trust from the county clerk’s office, tax returns from the IRS and even credit card, loan and mortgage information directly from the loan provider.

In addition, it will be possible to receive some of this information from your spouse. I would also encourage you to run a credit report to have an accurate view of your debt.

Next, create a post-divorce budget based on your income only. If you have children, child support will need to be calculated. An attorney can help you accurately calculate child support. Figure out if you can afford to keep the house, car or another item that will cost you money on a monthly basis.

I would also encourage a pre-divorce savings plan to save as much money as possible.

Plan on needing at least three months of expenses. Open a separate account at a different bank than where you bank now. You may also decide to take one-half of the money in any bank accounts you share with your spouse.

You could take more than one-half, but the Court may become upset and you may have to return some of the money (I recommend that you only take out that amount of money necessary to carry you through the next three to four months).

Also, go ahead and open credit cards in your name only to be sure that you have some good (and separate) credit. Ordering a copy of your credit report will help you to learn your financial situation as far as debts and will also assist you in monitoring your credit. In addition, a credit report may show if your partner is using a joint credit card to make inappropriate purchases.

Finally, if you are concerned about your spouse using your credit or obtaining money using your name, go ahead and join one of the many credit monitoring companies (also read how to protect yourself online).

Another good piece of advice would be to open a post office box to make sure that you have confidentiality and privacy.

You may want to receive confidential communications at a safe location. Communication such as attorney letters, new credit card statements and new bank account information should go to such post office box. If you do open any new credit cards, be sure to open them in your name only.

If you are still in the planning stages and if there is no court order keeping you from making the following changes, consider changing your Will and any beneficiaries of life insurance, 401(k) plans, retirement accounts, etc.

As far as changing any beneficiaries, be sure to contact the brokerage firm to make sure that they do not automatically send original beneficiaries notice of any changes.

Don’t leave it to chance.

While it would be extremely unlikely that you would die during the divorce process, it does happen occasionally.