Stay Financially Safe With These Divorce Tips

Divorce is no time to turn your back on your financial interests. Don't be one of those people that suffer from a loss of property and debt because of a divorce. In some instances, your bad financial decisions during divorce might not cause issues until years later. Take a look at some important tips that, if followed, will mean a better financial future for you and your children.

First Things First

You may know a divorce is coming but not know when. If you suspect divorce is about to happen, take action. Don't wait or it might be too late. Access your financial documents, online accounts, bank and investment statements, and more, as well as those of your spouse. Make your own copies of important papers, tax returns, deeds, insurance policies, and car titles. Assemble a folder (for your eyes only) and set it aside for later. If you assume vital documents will be accessible when you need them, you could be making a mistake.

Do the Math

Next, put a timestamp on both the present and the future by making a budget and a net worth statement. You may already be using a budget, so begin a new spreadsheet sheet (or whatever you use) and plot out what a one-year-from-now budget looks like. You will be losing some income from your spouse and you might be moving to a new place. This can be difficult because no one knows what the future can bring. This exercise, however, is meant to start an ongoing process so that you can always keep your financial situation in mind during the divorce.

Think in Realistic Rather Than Emotional Terms

It's all too easy to set your sights on things like the family home or other large and messy items. Be sure to look beyond the security that having those things can mean and examine the true cost of owning them. You could be better off with cash or other property that is more liquid.

Taxes

Part of a divorce is the marital settlement agreement. This is a major part of a divorce and contains a list of all property and who will own it going forward. Be sure that not only are the divisions fair, but that you understand the tax implications of owning the property. Some of it could be interpreted as income or income-earning, and that can mean that you will owe taxes on it.

For information on making sure that debt and property don't cause you problems during and after divorce, speak to a divorce law attorney about your case.