Divorce is not just an emotional process—it is also a significant legal and financial transition. If you and your spouse are going your separate ways, preparing in advance can help to better ensure your financial stability and protect your interests as your life circumstances evolve dramatically.
For starters, one of the most important steps you can take when preparing for divorce involves gathering important financial documents. Organize records for all income sources, bank accounts, retirement accounts, investments, real estate holdings, debts and other financial assets. Key documents to collect include:
- Tax returns (at least the last three years)
- Bank statements
- Pay stubs and proof of income
- Credit card statements
- Mortgage and loan documents
- Retirement and investment account statements
- Insurance policies
Why make all of this effort? Having these documents readily available will help when it comes to asset division, child support calculations and alimony discussions.
What else?
You’re also going to need to draft a working budget. Assess your current expenses and determine how they may change once you and your spouse are living separately. Consider costs such as rent or mortgage payments, utility bills, groceries, insurance and childcare. Having a clear picture of your financial needs will help you plan for life after divorce.
With all of this said, it may be tempting to make significant financial moves before filing for divorce, such as selling property, withdrawing large sums from accounts or changing beneficiaries on policies. However, such actions can raise legal concerns and may negatively impact divorce proceedings. For this and many other reasons, it is also going to be wise to seek personalized legal guidance as soon as you possibly can. That way, you can avoid missteps that might otherwise hinder your success down the road.