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Get it Together Before Divorce

Posted by Diane H. Blackwelder, CFP® on 31 March 2011 | 0 Comments

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In marriage, we often split responsibilities rather than share them - handling the household finances is no exception. 

More often than not, one partner serves as the family's Chief Financial Officer, while the other is blissfully unaware of the “money stuff”. Regardless of your role, you will need to get your financial papers in order to start piecing the financial puzzle together:

Locate Bank, Brokerage and Retirement Account Statements – This means ALL the accounts, not just the ones in your name.  Keep in mind many financial institutions are sending “paperless” statements stored through online access.  If you have never laid eyes on your spouse’s  401(k) statement, now’s the time to get a copy.  In some cases, this could turn out to be a touchy subject.  If you think there are accounts that exist but can’t be verified, take time to make a list - it will come in handy later.

Find your Employee Benefits Booklet - It is easy to underestimate the value of benefits provided by work – health insurance, retirement plans, flexible spending accounts, life insurance coverage, etc.  Understanding your current coverage is especially important if you are on your spouse’s plan.  These things cost money if you are providing them for yourself post-divorce. 

Gather the Tax Returns– To financial folks, the tax return is like a window to your financial soul.   You will need at least the last 2 years of returns with all the schedules (simply put, every single page filed, not just the first two).  Temporarily unavailable (aka lost)?  If a CPA prepared your return, it should be easy to obtain copies from their office.  If you file using a program like Turbo Tax or paper forms, the IRS certainly has a copy.

Inventory Your Stuff – yes, everything of value.  This includes the house, the cars, the furniture, and your grandmother’s china.  Now is the time to determine the items that are most important to you.  Keep the value of these items in perspective.  We’ve all heard the stories about couples who spend thousands of dollars fighting over an item worth less than $100.

Track Your Expenses – Understanding how and where your family spends money each month will set the tone for your post-divorce lifestyle.  The more accurate expense picture you can paint the better.  Using programs that automatically post-expenses from your checking account and credit cards such as Mint.com will simplify the process.

Know Who You Owe – Don’t forget, the debts you accumulate during marriage belong to both of you regardless who “charge it”.  Gather statements for all credit card, auto loans, lines of credit, etc.  This would also be a great time to check your credit report.

A friend told me once, “Marriage is about Love, Divorce is about Money .  Gathering the right information and providing accurate numbers, will go a long way to help you reach a fair agreement.


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