Finances and Divorce: What You Need to Know
If you’re in the pre-planning stages of divorce or thinking about getting a divorce, you may be feeling overwhelmed with all the things you need to consider. One of the biggest considerations during this time will be your finances both during and after the divorce. While this can be a difficult time for all parties involved, we have put together a list of important financial considerations that individuals (especially with children) should keep in mind as they take the next steps toward filing for divorce.
Gather Your Legal Documents
Having important documents ready and available will help you get through your divorce as easily as possible. You will want to collect all legal documents such as wills and trust documents, marriage certificate, deeds to property owned, loan documents, credit card statements, bank statements, retirement accounts, stock owned, and any other financial or legal documents that affect you or you and your spouse.
Hire an Attorney
Hiring an attorney is a personal decision that you will need to consider carefully. Even if you are divorcing amicably, it might make sense to hire an attorney to help you sort out the details of your financial requirements or custody issues. In the state of Florida, you do have the option of a simplified dissolution of your marriage which may not require an attorney. You can check to see if your marriage meets the requirements for this type of dissolution here: https://www.divorcenet.com/states/florida/florida_divorce
Whether you choose to move forward with a traditional divorce or do it yourself through the simplified process, it might make sense to consult with a lawyer first to make sure you are not missing any important details related to your financial well being. Tobias Financial Advisors recommends you work with an attorney.
If you need attorney recommendations, please do not hesitate to contact our office. We offer to work with each of our clients to ensure they have the expertise they need for the situation.
Take Inventory of Your Actual Cost of Living
How much money will it take to maintain a similar lifestyle to what you are accustomed to now? How about for your children? It’s important to have a clear picture of what it will take to maintain your current lifestyle. The court will take this into consideration when making decisions about asset allocation, the primary residence, alimony, and child support.
Creating a budget is an important step toward not only taking an inventory of your current lifestyle, but also in planning ahead for the future. The easiest way to create a budget is to start by listing out all of your necessary expenses, then your income sources. Once you have a big picture overview of how much you have and how much you will need, you are then in a better position to understand what changes will need to be made, such as lowering your cost of living or increasing your income. If you do not have an outside income, this budgeting step can be helpful in giving you a clear picture of what your attorney will ask for, especially in terms of alimony and child support.
Will you Request Alimony?
While laws will vary from state to state, if you are located in the state of Florida, the judge will take many factors into consideration when deciding whether you are eligible to receive alimony and how much will be provided. Some of these factors include:
- The length of your marriage
- The standard of living during your marriage
- Both your earning potential and that of your spouse
- Whether you have the financial responsibility of minor children from the marriage
For a comprehensive list of factors to be considered, please check out this article: https://www.womenslaw.org/laws_state_type.php?id=12979&state_code=FL
Avoid Big Financial Decisions
If you are about to start divorce proceedings, now is not the right time to make large purchases or commit yourself to big financial decisions. If there are large financial commitments that you feel you must make at this time, it would be a good idea to consult with your financial advisor first.
Know When to Get Help
Getting professional help is one of the best ways to ensure that you are doing everything you can to make this difficult transition as painless as possible. Consider engaging a team of professionals who can offer advice and expertise regarding the legal process, the family and emotional impact, the tax burden, and the financial impact of a divorce on you and your family. That team of professionals who help you navigate the divorce and will also be there afterwards to help you build the new life you deserve.
If you are getting a divorce, be sure to speak with your current advisors (Attorney, CPA, Financial Advisors, etc.) or if your spouse is the one who has the relationship with these folks, seek out your own team. This may make all the difference between making sound financial decisions that will impact you in your post-divorce life.