When a marriage fails and divorce is imminent, emotions run high and can interfere with an individual’s ability to think rationally and make logical decisions. This is often true of even the most reasonable and level-headed men and women who are likely to be rattled by the hurtful actions and words of a soon-to-be ex-spouse. Add fear and anxiety over important matters like child custody, and it’s no wonder some divorces become highly contentious affairs.
While it can be extremely difficult, individuals going through the divorce process would be wise to focus their energy and attention on their current and future financial situation. Decisions made during the divorce negotiation process, with regard to the division of assets and marital property, greatly impact an individual’s current and future financial situation and ability to provide for children. It’s important, therefore, to become as informed as possible and to take an active role in helping determine how assets will be divided in a divorce.
For spouses who did not handle financial matters during a divorce, it can be challenging to discover joint assets. In many cases, statements from investment, checking and savings accounts can be extremely helpful. Tax documents from a previous tax year can also provide important financial information and may even uncover details related to unknown or hidden property and assets.
Additionally, an individual will need to obtain statements related to both one’s own retirement and investment accounts as well as those of an estranged spouse. In cases where an individual knows or suspects a spouse is hiding assets, legal action may be effective in compelling a spouse to disclose such assets.
After gaining a comprehensive picture of one’s financial situation pre-divorce, an individual would be wise to enlist the assistance of a financial professional to help determine one’s financial needs post-divorce. When doing so, it’s important to account for and budget with child support and spousal support in mind and also plan for the positive or negative tax implications associated with these payments.
Source: The Huffington Post, “Sudden Wealth From a Divorce?,” David A. Dedman, Aug. 21, 2014