No one gets married thinking a once-loving relationship will end. However, 40% to 50% of all marriages result in divorce, according to the American Psychological Association. That percentage is even higher for second marriages, as nearly two out of three don’t survive.
It’s perfectly natural feeling afraid of what a divorce will mean for you and your children if you are a parent. Initially, many don’t even think about their finances or know what to do. The good news is that you can take steps to prepare financially, and help is there for you.
Take stock of your current financial situation
One of the most crucial steps for dividing marital property is to gather personal and financial documents for your lawyer. This includes recent documents, such as tax returns (for the past three years), home mortgage and title, property taxes, bank accounts, investments, vehicle titles, pay stubs for you and your spouse, retirement accounts, bills, utility statements, monthly budget and all marital debt. Also, request a copy of your credit report.
Put together a post-divorce budget
Next, looking at your anticipated income and expenses after the divorce is final and you become a one-income household is crucial. Will you stay in the family home and need to pay the mortgage on your own? Will you need to rent an apartment? Will you receive or pay spousal support? If you have primary custody of your kids, will you receive child support, and how much? It’s essential to do your homework ahead of time to determine what you can afford.
Demystifying the process
While all these steps may still seem overwhelming, you don’t have to go it alone. Getting experienced legal guidance can remove many of your doubts and fears for the future. An experienced divorce lawyer can help you with realistic questions, such as:
- When should I open a new bank account?
- Why should I pay off all my debts, if possible, before the divorce is final?
- How do I create a monthly budget?
- Do I need to create an emergency fund for unexpected costs? How much should it be?
All the work you do ahead of time will not only help reduce the length and cost of your divorce but will also help alleviate some of the stress. Once you have the facts, you can look forward to starting your new life on the best financial footing possible.