Once divorce papers have officially been filed, it’s not uncommon for a person to experience a wide range of emotions from anxiety and sadness to relief and even exhilaration.
In light of this reality and everything else suddenly brought about by the pursuit of a marital split — new living quarters, new custody arrangements, etc. — it’s perfectly understandable how a person might feel slightly exhausted and perhaps even ill-equipped to handle anything as complex as divorce-related issues.
However, experts strongly encourage people who are in the early stages of the divorce process to consider taking certain steps related to their finances, as it can make things significantly easier going forward.
To that end, the very first step they advise is conducting a comprehensive financial assessment, as it will provide a more complete picture of both assets and debts, and serve to perhaps adjust expectations concerning property division.
According to experts, this comprehensive financial assessment consists of more than just noting the values of bank accounts, retirement accounts, cars, homes and other valuable items.
Here, they advise securing documentation related to everything from salaries and insurance policies to debts owed jointly or separately, and insurance policies. They also advise securing copies of tax returns dating back at least two to three years.
As a next step, they advise using the information gleaned to create a list outlining every conceivable monthly living expense post-divorce. From there, they recommend simply subtracting these monthly expenses from after-tax estimated monthly income to determine disposable income.
These calculations are important, experts say, because they provide a person with a rough estimate of how much it will cost to live post-divorce and, if the disposable income calculated looks insufficient, a projection as to how much support may prove necessary.
These two very simple steps can go a long way toward giving a person much-needed peace of mind moving ahead, as they will know where they stand financially and enable them to engage in more informed discussions with attorneys, accountants or other professionals involved in the divorce.
If you would like to learn more about divorce or divorce-related matters such as alimony, child support or property division, consider speaking with an experienced legal professional who can explain your rights and protect your best interests.
Source: The Milford Daily News, “How to prepare financially for a divorce,” Gary DellaPosta, May 8, 2014