Divorce is stressful. You’re saying goodbye to one future and heading out into an unexpected one. Where are you going to live? When will you see the kids? Who gets the dog? Should you still take that trip to Hawaii in June? There’s so much uncertainty. Take some of the worry out of it by starting with a clear understanding of what your finances are today.
Step one is getting your paperwork in order. Before you pack a bag, make sure you have all the documents you’ll need.
- Bank account statements
- Investment account statements
- Retirement account statements
- Stock options statements
- Defined benefit and defined contribution pension plan statements
- Tax returns (three years)
- Partnership/corporate financial statements
- Payroll stubs
- Social Security statements
- Life insurance policies
- Real estate documents
- List of all individual, joint and business non-investment assets
- Trust documents
- Business/partnership agreements
- Loan/credit card statements
- List of all household/business expenses
- Copy of your credit report
Once you have all the paperwork, consult with a trusted lawyer and financial advisor who have your best interest in mind. Find a Financial Advisor who specializes in divorce. This advisor will be as important as your attorney and will help you understand your current financial situation as well as assist with mapping out your financial future. You can find Certified Divorce Financial Analysts in your local area at www.institutedfa.com/find-a-cdfa/.
Step two is do your research into property distribution. It may further reduce your stress to know how property is distributed in your state. Do you live in an equitable distribution or community property state? Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin are community property states and the rules there are very different than Equitable Distribution states.
Community property in Arizona is any property acquired during the marriage with some exceptions like an inheritance which could be considered separate property. Take some time to list what property you brought into the marriage. Document as much as you can.
If either of you own businesses, document in the same way you documented your household assets and debts.
Consider opening separate bank accounts and credit cards. It’s often an uncomfortable conversation, but if you hold joint accounts, you’ll need to discuss how to split the funds so each of you has liquidity now.
Starting out with a clear picture of where you stand today can smooth the bumpy road ahead and help calm the jitters.
Have more questions? We can help.
Shaunna M. Anderson, CDFA®