Divorce takes a toll on your mental health, your stability, and your finances. Some forget to take care of their finances during a divorce, assuming that there’s no point to it when everything is in free fall. However, this is actually the best time to take control of your finances and use them to prepare for a new stage of your life.
If you’re getting divorced and you’re not sure how to protect yourself throughout this process, let us help. Call the team at Coumanis & York at 251-260-3927.
Create a Brutally Realistic Budget
This isn’t the time to be overly optimistic about what your future will look like. You need to be incredibly honest while looking at your budget and considering what you can spend, especially if you’re leaving the family home and you need to figure out how much housing you can afford. After creating a budget that accounts for monthly bills and necessary expenses, add in periodic expenses.
Don’t forget car registration, vehicle repairs, subscriptions, school fees, and other expenses that you still have to budget for. You don’t want to start out life as a single person with more bills than you can handle because of a budgeting error.
Establish New Accounts
In many cases, simply removing your ex-partner from a bank account or credit card isn’t enough. You should go one step further and establish entirely new accounts. Even though banks shouldn’t grant access to those listed on the account, smooth-talking ex-partners have been known to gain access by saying that they were removed because of a clerical error or by overriding security questions.
Make Sure Your Documentation is in Order
You should begin this step as soon as possible once you’ve made the decision to divorce. Get copies of bank statements, retirement account statements, tax returns, insurance policies, and other financial documents. Put them in a safe place away from the marital home. You may need these to start changing beneficiaries and double-checking spending after you leave the marriage. If you worry about your spouse finding or destroying the documents, consider making a digital backup to a cloud-based service.
Prepare for the Worst
There are a lot of unknowns in divorce, especially when it comes to your finances. Until all of the paperwork is signed and the debts are paid, anything could change. Rather than planning for the best-case scenario where you get to keep the assets you want and divvy up the debts in a fair way, plan for the worst. Assume that you will lose access to some assets and that you’ll take a larger portion of the debt than expected. This allows you to make a cautious, conservative plan. If things go your way and you end up in a better situation, you will have extra funds and assets at your disposal.
Hold Off on Major Changes
Divorce has a way of making you want something new. Maybe you want to start investing aggressively, get a brand-new car, or buy a vacation home. Take a deep breath and hold off on any major financial decisions for a while. Your mind is likely not in an ideal state during divorce, and you want to wait on those decisions until you can think them through clearly.
Contact an Attorney
An attorney is one of the best resources you can have during divorce. Preparing your finances for the future isn’t helpful if you’re doing so based on false assumptions about what will happen during your divorce. Your attorney can take a long, hard look at your finances, the history of your marriage, and what the likely outcomes of your divorce are. From there, you can make practical plans that will help you create the life you have always wanted.
Take the First Step Toward a Healthy Divorce with Coumanis & York
If your marriage is ending and you’re not sure how to protect yourself and your assets, let Coumanis & York help. Our team has extensive experience with all types of divorces, including amicable, contentious, and high-asset divorces. Let us help you with your divorce. To schedule a consultation, give us a call at 251-260-3927 or reach out to us .