Breaking up is hard to do, on so many levels, and when it happens, the four aspects of divorce (the legal, financial, emotional and social aspects) are inevitably impacted. So the earlier you organize yourself the more smoothly the process will go. Whether you are the initiator or have been blind-sided by your spouse, the following tips will serve you well:
- Gather and copy all financial documents.
You may or may not have been the one handling the finances but you should (and are entitled to) have access to asset and liability statements. This includes bank, investment, retirement plans, mortgage, automobile and student loans, credit card, etc. Remember to include insurance policies, real estate deeds, check registers and tax returns. If either one of you own a business, gather those financial documents along with the buy/sell agreement. A financial statement will be useful too. These days you may find this data filed in a drawer or stored on the computer.
- Inventory household items and family possessions.
Make a list of all artwork, jewelry, collectibles, furnishings, furs, motor vehicles, etc. Do not forget items stored in the attic, basement, storage facility and safe deposit box. You may want to consider taking a photograph of these items - particularly if you fear they may "disappear."
- Open accounts in your name.
Specifically if you do not have any. Begin with a checking and savings account. You should also have your own credit card. This may be a challenge for a stay-at-home spouse but should be easier if the lender looks at your household income instead of your individual income. Eventually as you transition into single life you will need these.
- Check your credit.
Request your credit report from Experian, TransUnion and Equifax. If there are any discrepancies, address them as quickly as possible. A good credit rating is desirable as you build your financial security.
- Educate yourself.
Familiarize yourself with the divorce laws in your state. Know your rights and obligations. Additionally, there are four ways to get divorced - traditional/litigation, collaborative law, mediation and pro se (do it yourself). Each method has it's pros and cons. Your circumstances, which include the current state of your relationship, your family dynamics, finances and assets will help determine the appropriate method. Do not make a decision in haste. Speak with professionals specializing in each mode of divorce to make sure you truly understand your options.
- Form your divorce team.
In addition to your attorney or mediator, it is advisable to include a divorce financial professional, divorce coach and if there are young children, consider a child specialist. Each of these advisors have been specifically trained in the unique concerns of divorce and will allow each professional to thrive in their area of expertise. Interview several. Then determine who you believe understands you, are competent and you can work well with.
- Establish an alternate mailing address.
If you are concerned about confidentiality and your spouse intercepting your mail, have documents sent to your office, a friend/family member or open a post office box. Many prefer electronic communication so if your spouse has access to your email, open a new account.
Take the time to organize at the onset. You will feel more confident and in control. Ultimately these steps will lead you to and keep you on the path you want.
(Ivy Menchel is a Certified Divorce Financial Analyst and her practice focuses on the objectives, needs and goals of clients; always beginning with a thorough understanding of their specific situation; committed to bringing creative options to clients for their financial issues; and a strong belief in advisor collaboration.)