Making the decision to divorce is one of the toughest choices you’ll ever face. But now that you’ve taken that brave step, the next challenge is to prepare yourself financially.
This starts with gathering your financial information for analysis.
A task like this can feel overwhelming and intimidating. But if you’re like most people, the main thing holding you back is knowing what to look for and where to start. The good news is that this blog post will provide you with a solid starting point, including a convenient financial checklist to refer to throughout the divorce process.
You may have heard horror stories about divorces dragging on for years, causing incredible stress and financial ruin. But this doesn’t have to be your experience.
How well you prepare for divorce during the early stages, before hiring a lawyer, can significantly influence the process. Getting all your information and documents together and being well-prepared can reduce your stress because you won’t have to scramble for missing information or be caught off guard by surprises, though this can always happen.
Think of your divorce as a puzzle you need to solve: The more information your lawyer has from the start, especially regarding your finances, the better they can represent you and secure your desired outcome. This applies to issues beyond your basic finances, such as child custody or alimony, which can also affect your financial future.
While you might be concerned about the sheer volume of information to sort through, there’s no need to worry if you stay organized. By systematically gathering all the necessary information from today, you’ll help your lawyer get a clearer financial picture and identify what additional documents and records are still needed from your ex. Your lawyer can request these on your behalf during discovery. So, let’s get started.
Assembling Important Financial Documents
Financial information usually falls into groups, making the discovery phase of your divorce more manageable. Below is a financial checklist detailing the documents you should start assembling.
Financial Documents:
- Income tax returns for the past three to five years
- Social security statements
- Financial statements and loan information
- Debt records (liens, bankruptcy, foreclosure)
- Credit card accounts
- Investment account statements
- Pension plan information
- Retirement savings accounts
- Employment records and paystubs
Estate Planning Documents:
- Wills
- Trusts
- Advanced healthcare directives
- Powers of attorney (financial and medical)
Asset-Related Documents:
- Deed(s)
- Mortgage(s)
- Home equity line(s) of credit (HELOC)
- Real estate interests
- Vehicles (cars, boats, farm equipment, airplane)
- Personal property (jewelry, art, collectibles, antiques)
- Stocks and bonds
Personal Documents:
- Marriage certificate
- Divorce decrees or annulments (from previous marriages)
- Social security numbers/cards for both spouses
- Birthdates for each spouse
- Legal decisions and filings involving both spouses
- Life insurance policies (including those offered through employers)
- Internet history (emails, texts, social media)
Child Documents:
- Bank accounts
- Investment accounts
- 529 plans and college savings plans
- Trusts
- Report cards and school records
- Birth certificates
- Social security numbers
- Passports and Visas
- Adoption papers
- Embryos
- Cord blood and dental pulp storage
Keeping Your Finances Clean and Organized During the Divorce Process
Even if your finances are in good shape, it’s important to understand how to keep them clean and organized during the divorce.
Maintain Detailed Records: Keep track of all income and expenses, including small purchases and unexpected costs. Document any additional income from side jobs or fluctuating sources.
Communicate Respectfully: Maintain a polite tone when discussing finances with your soon-to-be ex, even in difficult situations. This also applies to interactions with customer service representatives who can provide valuable information.
Create an Organizational System: Arrange documents into categories for easy storage and retrieval. Digital files can be backed up using cloud technology to prevent loss.
Maintain Spending and Saving Habits: Avoid making large purchases that deviate from your normal spending pattern. Record your ex’s spending habits if they change significantly, and let your lawyer handle asset depletion in negotiations.
Avoid Major Financial Changes: Don’t make significant changes to joint financial accounts or arrangements without legal advice. However, address non-financial estate planning matters, like medical decision-making or updating wills, where appropriate.
Project Post-Divorce Costs: Envision and plan for your post-divorce financial life. This helps inform your lawyer of the settlement needed to support your future.
Seek Professional Help: There’s no shame in asking for assistance during the divorce process, especially with organizing and evaluating finances. A competent legal team, supported by financial professionals, can guide you efficiently and cost-effectively.
Find a North Carolina Divorce Attorney to Help You Prepare Financially for Divorce
One of the most stressful parts of divorce is managing finances. However, it’s also one of the most important because your financial stability lays the foundation for life after divorce.
At Peaceful Law, we understand the complications that can arise, from missing documents to unexpected surprises. With decades of experience, our divorce and estate planning teams, along with talented financial professionals, are here to support you every step of the way.
Contact us today to set up a consultation and start your journey towards financial stability during and after your divorce. Let us help you with the peace of mind you deserve.
