Divorce can easily become one of the most tumultuous, stressful times in your life—emotionally, physically, and financially. During a divorce, emotions can range from relief to devastation.
When the end of your marriage occurs, there is no wrong way to feel. However, you must remain vigilant about staying focused during the entire process. Particularly during the very beginning of it, you might miss out on key items that could ensure future financial stability—because you let your emotions cloud your viewpoint.
In order to take control of the situation early on, one of the most significant things you can do is prepare. Whether you plan to meet with a divorce attorney or a certified divorce financial analyst (CDFA), you should have your critical documents in order. A good CDFA will tell you to get all of your paperwork together before you file for divorce.
How do you know what you should prepare? To make sure you are gathering everything you may need, a divorce checklist is below. And to ensure that you have all of the most critical documents on hand, the list is broken into manageable pieces.
It will be more difficult for a CDFA to get an accurate idea of your marital finances if he or she does not have the pertinent information. Keep in mind that these professionals are specifically trained to help you navigate a successful settlement and secure a stable financial future. Without all of the relevant data to review, you could miss out on your share of significant assets, investments, or accounts.
You will need to keep in mind that documents should cover your long-term history, not just the most recent transactions. The gold standard is that your documentation should cover five years’ worth of data. Perhaps this information is unavailable, or the marriage did not survive that long. Either way, three years’ worth of data should be sufficient to help your team assemble a settlement that you will be satisfied with.
Which financial documents are the most important to put together first? The divorce financial checklist will give you the most thorough rundown of the most commonly requested items:
- Income Tax Returns
- Employment Records
- Financial Records (such as bank statements and loan information)
- Investment Account Statements
- Pension Plan Information
- Retirement Savings Accounts
- Children’s Bank Accounts
- Debt Records
- Wills and Trust Agreements
- Social Security Statements
Some spouses might be extremely secretive about their marital finances, and hide bank information and income statements. Their insistence on keeping you in the dark is bound to make it challenging for you to find copies of your income taxes, pay stubs, and other key information, which will be pertinent during your divorce. In these circumstances, the best thing you can do is create a ruse to pump your spouse for information.
If your spouse does not know that a divorce is imminent, you might consider telling him or her that you want to plan for a health emergency. Sit down together, and go over all of your insurance information and finances to make a “plan” for handling the crisis. While this tactic might not give you copies of all the information, you can at least see where your marital finances stand.
Alternatively, you can take a much sneakier route for accessing the information you need. Be certain to keep an eye on your mailbox, so you can get the mail first every time. If your name is on a joint checking account, you can even head to the bank to receive copies of your bank statement.
Last but not least, pull your credit report and make sure you know about all of the debt that is registered in your name. This tactic will protect you from nasty surprises after the divorce is over, such as receiving bills for credit cards and loans that you were not aware of.
This financial information is crucial to helping your CDFA and your divorce attorney, but it also comes in handy when you are creating a new budget. Then you can gain a clearer picture of what it costs to maintain your current lifestyle each month. This baseline can help you adequately prepare to move out and start down your own path toward a single income.
One of the most important steps to take before getting a divorce is understanding what each person in the marriage brought to the union. To get an idea of the important documents you need to round up for your divorce attorney or CDFA, take a look at the checklist below:
- Marital Home Information
- Information about Other Real Estate
- Vehicle Information
- Personal Property (including jewelry, artwork, collections, and antiques)
Be sure to specify which assets you personally brought into the marriage as individual property. You should be clearly identified on your list of assets, so that everyone will be clear about who should belong in the settlement.
For many couples, preparing a childcare plan is one of the most challenging aspects of a divorce. However, since caring for the children together requires financial cooperation, it is essential that you draft a potential plan at this stage.
You should start by creating a list of the parenting items that are most important to you. The two of you will need to make decisions about visitation, custody, and insurance expenses. You will even need to decide which one of you will claim them as dependents on your taxes.
Consider your priorities for their futures, especially their college expenses. Will you both contribute to a savings account, or will the children pay for their own tuitions? There is no right or wrong way to handle some of these issues, so you need time to think about what will work best for your family. These ideas are meant to be the catalysts for you and your spouse to start planning how you are going to handle everything after you split into two households.
By taking a draft of this information to your divorce attorney now, you are giving him or her an opportunity to see if there is anything you left off that might still need to be considered. Therefore, you will have a bit more breathing room. That way, you can reflect on what will be best for the children, instead of selecting the easiest route in the heat of the moment.
Remember, your financial information is not the only consideration that a financial planner will need to take into account.
You will also need pertinent information about the children, such as their:
- Social Security numbers
- Bank Accounts
Personal data about you and your spouse can also help the planner draft an appropriate settlement that all parties will be satisfied with.
This data can include:
- The date of marriage
- Birthdates for you and your spouse
- Social security numbers for you and your spouse
- Information about previous marriages, including divorce decrees
- Prenuptial or postnuptial agreements
- Judgments and pleadings that involved either spouse
- Insurance policies
Other Pertinent Issues
If there are any extenuating circumstances that led up to your divorce, you will need to find documentation and proof. This documentation could factor into the final amounts of spousal support payments, and it could help make decisions about the custody of any children involved in the split.
Here are a few examples of situations when you might want to seek out proof that your spouse was involved in something illicit:
- Substance abuse
- Mental illness or instability
In addition, there might be other circumstances that can influence your divorce. Therefore, be sure to acquire any documentation you think might be pertinent to your case, so that the divorce attorney can review it.
Information That Needs To be Changed
While you will not have to take this information to your divorce attorney, it is always a good idea to start planning ahead for things that need to be altered. You will not want your spouse’s name on documents that relate to your personal well-being, future finances, or healthcare directives.
You might be able to start changing some of the information on these items, even before you file for divorce:
- Life Insurance Policies
- Powers of Attorney
- Advance Healthcare Directives
- Bank Accounts
- Credit Card Accounts
It is also important that you head to the local post office and obtain a P. Box, particularly if you are both still live in the marital home. This action will prevent your spouse from “accidentally” opening important letters from your attorney about the upcoming trial. It also makes it impossible for your spouse to see any personal finances and bank statements that might show up in the mail. It might be inconvenient to run to the post office every time you want to check the mail, but it will likely pay off in the long run, since you will be able to keep your nosy spouse out of your private information.
You may also consider getting a safe deposit box for items that are extremely precious or valuable to you. These irreplaceable items might end up missing, due to the resentment of a vindictive spouse.. Now is a good time to make a list of all the irreplaceable items that you own, and find a new temporary home for them until one of you moves out.
Final Divorce Settlement Checklist
Before you consider heading to your divorce attorney to initiate the end of your marriage, it is critical to be prepared for what happens afterward. By following these steps before filing for divorce, you will gain some sense of control over an otherwise emotionally charged and draining situation.
This divorce checklist will help you assemble documentation at your own pace. Then you will be ready for anything that your financial planner may need. In addition, gathering documents to prove and support the current financial situation in your marriage allows you to more adequately prepare for your future. It also gives you some space to reflect fas you consider some of the long-term issues that are bound to arise during a divorce settlement.
By completing an accurate assessment of your lifestyle, income, and expenditures, a financial planner can help you prepare for your future as a newly single individual. Preparing a budget and evaluating your lifestyle is an essential part of establishing a firm financial future for yourself. If you utilize this financial checklist, you will be able to more clearly and accurately see what you could be entitled to during your divorce.