FINANCIAL TIPS WHEN GOING THROUGH A DIVORCEApr 18 2016
When going through a divorce or initially deciding to separate, it is a good idea to consider what you need to do to become financially independent from your spouse. Consider speaking to both a family lawyer and an accountant or financial planner early in the process to get good advice and get pointed in the right direction. Below are key points to consider:
- Create a post-separation budget considering your own income, child support, spousal support, and government benefits such as the Child Tax Benefit. Recognize that you will be operating two households on the same income with which you ran a single joint household. Compromises will be necessary for both spouses.
- Copy all financial records, and keep those copies safely outside the home. Examining bank statements, credit card statements and income tax returns can lead you to previously unknown assets and debts in the name of your spouse.
- Create a list, or spreadsheet of all assets and debts in the name of either or both of the spouses. Remember to include businesses, or shares in a business, and pensions. This will give you a clearer picture of what is available to be divided.
- As assets are being divided, remember to file the required paperwork to protect your interest in those assets, transfer title, close joint accounts, and change beneficiary designations.
- Monitor or close joint lines of credit and credit cards to prevent your spouse from incurring debt that you might end up having to repay. If you don’t have credit in your own name, open your own bank account, credit card, and line of credit.
Remember to not get bogged down fighting over small things like pots and pans. The value placed on furniture, kitchen items, and other household contents is garage sale value. It is not worth paying your lawyer to argue over these items.
Give yourself time to adjust to your new financial reality. Don’t make major financial decisions like changing employment or buying a house for 6-12 months. Divorce is emotional, and one of the most difficult times in a person’s life. Take time to consider your options and get good advice from professionals.