Financial Tips During Divorce Proceedings
A huge part of divorce is family finances - both planning before a divorce and maintaining during the process. This can be daunting, but here are a few tips.
Track your spending. When you realize divorce is on the horizon, start tracking your expenses. Create a spreadsheet to track household bills, food, clothing, entertainment, transportation, child care, and any other expenses you incur. You can track your expenses by looking at your bank statements from the past year. Tracking your spending will help you to create a budget too.
Gather financial records. It can be overwhelming to go through documents when you may feel under time pressure. Getting ahead on gathering your financial records can help relieve that pressure when it is time sensitive during an ongoing case that has started. We suggest gathering the following in advance (for yourself and if you are able, your spouse as well): Tax returns (from the past 3 years); Paystubs (Year-end and current); Investment account statements (past year); Retirement account statements (past year and those showing premarital contributions); Checking and savings account statements (past year); Credit card statements (past year); Current mortgage statement, proof of assets you owned before the marriage. All of this information is used to create a balance sheet to split assets and liabilities between spouses. More information may be requested during a divroce case but this is a great starting point to get organized.
Maintain the status quo. Continue to deposit your paycheck to maintain the status quo. But, also look for ways to squirrel away cash when you can - increase your regular ATM withdrawals or consider purchasing $25 or $50 visa gift cards at the grocery store. This way, if your spouse attempts to cut off your access to funds at the start of a case, you are not panicking while your lawyer resolves this.
Open your own credit card. Consider opening up your own credit card account. This allows you some privacy and freedom as to your spending and establish credit. This does not mean go crazy spending.
Try to avoid frivolous spending! Divorce is a sticky situation in the first place, but extra spending on your part can create more problems. If you are prone to shop in stressful situations, try setting limits for yourself. This leads up to the topic of Dissipation, which is the spending of marital funds for a purpose other than benefiting the marriage, such as on a new significant other or lavish vacations.
Be cordial and calm. Finances are always a touchy subject in divorce. In some situations one spouse may resist and not be forthcoming with financial documents. Consequently, in these situations the other spouse may become frustrated. The best advice we can give is to remain calm and collected. There are steps we, as your attorneys, can take to obtain the information so if you do not have access to the information, that is not something to worry about.
At The Law Office of Erin M. Wilson LLC, we are here to ease the process of reviewing financial records during divorce. We are experienced in all aspects of reviewing the financials of a marriage or an individual, including reviewing and analyzing tax returns and all other financial accounts. We will make spreadsheets and help trace the income and assets, to break down the information in a way that is understandable for each individual client. We are here to help you through all the financial aspects of your divorce.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.