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Law offices of Dwight W. Clark L.L.C.
Law offices of Dwight W. Clark L.L.C.

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How to assess finances while weighing a divorce

| Oct 5, 2020 | Divorce |

Divorce is on your mind and you’re pretty sure you’re ready to move forward. However, there may be something holding you back, such as uncertainty regarding your finances.

Fortunately, when you assess your finances in the appropriate manner, you’re able to position yourself for success.

Here are five things you need to do as you prepare for divorce:

  • Create an asset and liability checklist: This is a list of every asset and liability that you have, both individual and joint. When possible, attach a value to each one.
  • Gather the necessary documents: Any financial document is one that you’ll probably need during your divorce. This includes things such as bank account statements, retirement account statements, life insurance policies, pay stubs and tax returns.
  • Consider your living arrangement: Do you want to stay in your family home post-divorce? Would you rather leave the home to your ex-spouse or sell it and split the proceeds? It’s imperative that you consider this detail, as it’ll impact you from the moment you ask your spouse for a divorce.
  • Protect your future: It’s easy to get so caught up in the here and now that you forget about what your finances will look like down the road. For example, if you’re in your 40s and you can see retirement in your future, it’s critical to make decisions that will protect you when the time comes. For instance, don’t give away all your retirement savings in exchange for other assets.
  • Talk to your tax professional: Many financial decisions that you make before, during and after the divorce process will impact your taxes. Talk to your tax professional about your current situation and what’s to come. They can provide advice that’ll guide you from a tax perspective.

There are many steps you can take to assess your finances as you weigh divorce. The more organized you are, the better you’ll feel about everything the future will bring.

You have legal rights and it’s a must that you protect them throughout the process. Neglecting to do so will take a toll on your finances, as well as your future as a whole.