Untangling shared finances can be a painful process. Normally, one spouse manages the household finances, while the other spouse is left in the dark. Getting informed of your finances will allow you to financially strategize for the legal process to come. Here are six tips to get you started.
Gather Financial Documents
Organize all financial records such as:
Tax Returns & W2s for the last two years
3 recent paycheck stubs
Property Information: Real Estate, Bank Account statements, Retirement account statements, and other assets
Ledgers for any loans, including your mortgage, auto loan, personal loans, credit card statements
Make sure you safeguard all documents prior to divorce in case some documents go missing or your spouse resists full disclosure. Financial institutions or advisors may have no obligation to provide you with your spouse’s account information once divorce is initated.
Create a Monthly Budget
Calculate your household income and track your monthly expenses. As you create this list of expenses, think if you can reasonably cut back on some expenses. Be sure to use previous months as a guide.
Do NOT forget to include:
Mortgage/ Rent + HOA dues
Insurance: Flood, Renters, Car, Health, Disability, Life
Transportation: Car payments, Fuel Cost, Repairs, Registration
Utilities: Electric, Water, Gas, Telephone, Cable, Internet
Cell phone
Groceries
Child Care Expenses
Education Expenses: Student loans, tuition, extracurricular activities
Credit cards and other loans
Knowing your cash flow information will help determine if you qualify for spousal support or if one spouse may ask for above guideline child support.
Inventory of Assets and Debts
Make a list of all assets and debts accumulated during the marriage. Identify if only spouse is attached to that asset or debt or if the item is associated with both of your names. Obtain a monetary value for each asset listed and take a photo of your valuables. This list will help determine how the marital estate will be divided. Distinguish between assets and debts acquired prior to marriage, any gifts given solely to you, or items that were inherited to one spouse only. Prioritize the items that are important to you and inform your attorney.
Monitor Credit Report
Immediately get a copy of your credit report and verify all existing sole and joint credit cards. Continue to monitor it until the divorce is finalized to ensure all accounts are assigned to a spouse.
Open Individual Accounts
Prior to initiating divorce, open up a savings and checking account in soley your name at a different from your joint account. You may also think about getting a credit card in your name only. You may not qualify without your spouse’s income or may need to strengthen your personal credit history.
Hire a competent attorney
You need the guidance of an attorney who will be there from beginning to end. Don’t postpone one more day. Call Sanchez and Flores, Attorneys at Law to prepare for your divorce.