How to Prepare Financially for Your Divorce

Amid the happiness and excitement of getting married, no one “plans” for a divorce. True, a few high-income individuals may put a “Prenuptial Agreement” in place – but most husbands and wives enter into a marriage with nothing but hope and trust for the future. So when they may eventually face the difficulties of a divorce several years later, they simply are not prepared for the financial implications.

As an experienced Macomb County divorce lawyer, I have seen how messy, difficult and emotionally draining it can be to separate a couples financial assets. For younger couples – even when they can agree on custody and visitation a – financial issues can often become quite heated and adversarial. For more mature couples – having more wealth or assets to be divided – the financial stakes can be even higher as the divorce settlement is negotiated.

However, if a spouse carefully prepares and organizes their finances ahead of the divorce, they can come out ahead – especially when represented by an experienced divorce lawyer who understands how the laaw can be applied to acheive the best financial outcome.

Each specific divorce is unique, and there is no substitue for the representation of a skilled divorce attorney. However, the following general tips can help get you started on understanding and planning your financial situation before your divorce.

Get Financial Advice from Divorce Professionals

Everyone wants to help when you are facing a divorce. Your best friend, siblings, parents and even co-workers will often start to offer advice when they learn you are facing a divorce. But unless they are lawyers, accountants or financial planners, their financial advice may be incorrect and hurt you in the long run.

Similarly, “advice” found online may be inaccurate, or may only be applicable in a different state that has different divorce laws from Michigan. Additionally, in many cases, you can be “penalized” by the Judge – and end up worse off – if you try to hide, change ownership or juggle certain financial assets.

Before moving money, changing accounts or attempting to “protect” your financial assets consult with a Macomb County divorce lawyer first. This will ensure that you are putting yourself in the best position to protect yourself in your divorce.

Track Household Expenses Before Divorce

If you have reason to believe that a divorce may bin your future, irt is never too early to start carefully tracking your household income and expenses. This concrete information will helping your lawyer present a case to the the Judge about how to fairly split up the bank accounts, 401K, property, and debts. It will also help ensure you reach a fair alimony and/or child support agreement.

As an experienced Macomb County divorce lawyers,, we have unfortunately seen hundreds of divorce cases where either the husband or wife (or both) don’t have a handle on family finances, assets and debts..

You should know – and keep track of – all monthly expenses, your spouse’s income, how much is in your bank accounts, how much credit card debt is owed, as well as what the monthly mortgage, car payment and insurance expenses are.

Create a record of the past several months household bills, utilities, groceries, clothing, maintenance, car payments, insurance, credit card debts, taxes, mortgage or rent, child care, medical expenses, discretionary spending (eating out, entertainment, etc.), child care and everything else that your family spends money on.

Also include seasonal or unexpected expenses, including vacations, Christmas & birthday gifts, and home maintenance costs, such as replacing your driveway.

Additionally, “look forward” to circumstances affecting your budget that may change dramatically  after the divorce. For example, if you were a stay-at-home parent who has to go back to work after the divorce, your day care costs may suddenly increase. As another example, your car insurance will likely skyrocket if you have a child that will be turning 16. College tuition costs should also be included, if you have children that will eventually be graduating from high school.

Gather Documentation Before Your Divorce

Gathering financial records now – before negotiations start, and tempers flare – can help you get the best divorce settlement. It can also assist you in budgeting going forward. Gathering these documents can be complicated and very time-consuming – so start collecting these financial documents as soon as possible.

Keep in mind that if your name is on any accounts – including bank accounts, mortgages, credit cards, loans & car payments – you DO have the right to ask for paper statements and/or see these account statements online.

One convenient “tip” is to use your cell phone to take photos of your paper statements before your spouse may hide or destroy them. If you have online account access, you can also generally download your statements in PDF format.

Financial Documents to Collect in Your Divorce:

• Checking account statements (one year, or more)
• Savings account statements (one year, or more)
• Retirement account statements, including:  401K & IRA
• Investment account statements (one year, or more)
• Loan statements
• Mortgage statements, home equity loans or rent receipts
• Auto loans (how much is owed & what the car is currently worth)
• Credit card statements (one year, or more)
• Insurance Bills (homeowners, health, life and auto)
• Both spouses’ recent pay stubs (or other proof of income)
• Both spouses’ income tax returns (3 years, or more)

You should also comile a separate list of all assets & debts brought into the marriage by each spouse, as well as a list of all assets accumulated during the marriage (cars, recreational vehicles, snowmobiles, house, cabins, etc.)

Don’t Make Any Big Financial Decisions

Many husbands and wives are tempted to take large sums of money out of joint accounts, move money to new accounts, hide money and/or change beneficiaries on retirement accounts or life insurance to “protect” themselves. This is not a good idea unless your divorce lawyer says it is OK. The Judge can and will penalizeyou for trying to take, hide or otherwise control marital assets!

During the divorce proceedings your lawyers will negotiate all of your major financial changes. But if you try to make changes on your own that benefit only yourself before the divorce, the Judge could award the assets to your spouse instead.

Our experienced divorce lawyersrecommend that you keep all financial matters transparent with your husband or wife, and that you continue to use your bank accounts and pay your bills the way you normally do. Otherwise you could actually end up being penalized in your divorce settlement.

Know When to Get a Lawyer’s Help in a Divorce

Whether your divorce is friendly or fraught with fighting – and whether your finances are simple or complex – only an experienced Macomb County divorce lawyer can effectively advise you on the separation of your finances during your divorce. In some cases, your lawyer may also recommend hiring an accountant, or a certified financial analyst. If one of the spouses is self-employment or owns their own business, a business valuation expert may also need to be called in.

Our experienced Macomb County divorce lawyer will know how the laws regarding division of money, assets, debt and property, will apply to your unique situation. Wether you are dividing debts, assets, or both, our skilles lawyers can ensure that get the fair settlement you deserve and that you are not saddled with unfair financial obligations.