How to Protect your Financial Future During a Divorce
Wheaton Divorce Attorney
Getting divorced can be expensive. In addition to lawyer and court costs, many individuals find themselves facing additional housing expenses, childcare expenses, and unexpected divorce-related costs like the cost of working with a forensic accountant or a business appraiser during the divorce process. On top of these expenses, many individuals have to take time off from work in order to attend hearings and evaluations, further costing them money.
Your divorce does not have to be a financial disaster. Speak with your lawyer about ways you can reduce the costs of your divorce, such as exploring alternative dispute resolution options like mediation or collaborative divorce and handling certain financial aspects of your divorce yourself.
Preparing your Finances Before your Divorce
Think of financial plan for divorce as two parts: financial preparations made before you file for divorce to make the divorce less expensive, and financial preparations you make before and during the divorce process to avoid debt and make life easier for yourself after the divorce is finalized.
Property division is often the largest, most complicated aspect of a divorce. This is the equitable division of all of your marital assets, which include your home and any other properties, your savings and checking accounts, and any investment accounts you have, such as a brokerage account or a retirement account. The court divides a couple’s assets based on a set of factors used to determine each party’s needs after the divorce, such as his or her age and health and the contributions he or she made to the marital asset pool during the marriage.
You can take a part of your property division into your own hands before you file for divorce. Although you might have to wait to have your home appraised and divided by the court, you can certainly close your joint bank accounts and divide the money without the court’s help. After closing your joint accounts, open new bank and credit card accounts individually to start building new credit histories for yourselves.
You can also save time and money during the divorce process by having information about all of your accounts easily available. Work with your lawyer or your accountant to develop a document that lists all of your assets and where they are located so the court can divide your marital assets more efficiently. Compile your information into an easily-accessible folder and make multiple photocopies of each document.
Handling Debts in the Divorce Process
Just like all assets obtained during a marriage are considered to be marital assets, all debts accrued during a marriage are marital debts. If you can, try to enter the divorce process with as little debt as possible. Pay off as much of your debt as you and your spouse realistically can afford to pay off. With the rest of your debt, consider consolidating it to make it easier to divide and pay off after your divorce.
Preparing for your Financial Life After your Divorce
During your divorce, you should always be thinking about life after your divorce. After closing your joint bank accounts, create a budget for yourself that utilizes as little of your income as possible. Save the splurges for after your divorce is finalized – when you are working through the divorce process, there are many circumstances you can face that can have unexpected costs. Prepare for these by having liquid cash available, rather than handling these costs by using credit.
Life after your divorce will have its expenses and financial challenges and you cannot assume that you will be given spousal maintenance or a specific share of your assets to cover these costs. Although spousal maintenance can be an important source of income for a newly-divorced individual, do not rely on it as your only source of income, especially if you have not yet begun the divorce process.
Work with an Experienced DuPage County Family Law Firm
If you are considering filing for divorce in the near future or if you have already done so, make a plan to help yourself avoid the financial pitfalls that can often accompany the divorce process. Speak with an experienced DuPage County divorce lawyer about your concerns to develop a strategy that will allow you to complete the divorce process without accruing a significant amount of debt. To get started with a member of Abear Law Offices, contact our firm to set up your initial consultation today.