Divorce is never easy, even when both spouses agree to terms over child custody, spousal support and distributing marital assets. While it’s unlikely you can avoid pain altogether, getting organized can relieve some of the sting.
Personal and financial uncertainties abound when someone knows their marriage will not survive. However, some of that anxiety can be relieved by documenting all your marital property before bringing up the subject of divorce. This action can also help you get more favorable results.
Three steps to prepare for divorce
While you may have to do some detective work if you aren’t the one who normally handles the finances, most of this information is readily available with a little digging. Here are three steps:
Make a checklist: Much of this information should be easy to find but be sure to make copies of all documents, such as:
- Bank and investment accounts
- Insurance policies
- Wills or trusts
- Real estate deeds and mortgage documents
- Credit card statements
- Business ownership records
- Personal financial statements
- Pay stubs
- Tax returns
- Complete inventories of marital and nonmarital assets
- Pensions, 401(k) and other retirement accounts
- Prenuptial agreements
- Prepaid funeral plans
- Long-term health insurance
- All estate planning information
Categorize your documents: One way to reduce legal costs is to organize the paperwork into logical categories. For instance, all homeownership documents should be kept together, retirement information in another folder and so forth. That way, your lawyer has easy access, and it’s less likely that you’ll miss vital assets that can hurt your outcome.
Classify these assets: Once you have gathered and organized everything you and your spouse own, it’s time to designate each asset as belonging to you, your spouse or both parties. Your attorney may have to help you classify more complicated assets, such as retirement plans, family inheritances or specific property owned before the marriage.
Being prepared helps you take control
There are many moving parts in a divorce, and the process can be overwhelming, especially before you know what to expect. However, taking these steps gives you some peace of mind by getting a sense of your current financial situation and what to expect when you begin your next chapter.