Considering Divorce? Put Your Financial House in Order

Stacy D. Phillips

While you may have come to the conclusion that your marriage is over, we recommend that you take the following steps before “crossing the Rubicon” and sharing this news with your spouse. Knowledge is power and your first order of business should be to put your financial house in order.

Know Your Financial Picture. In too many instances, we have met with clients who are unaware of their complete financial situation. Be knowledgeable about both your and your spouse’s finances. Summarize income from all sources. Identify assets and liabilities (in your name, your spouse’s name, and jointly held), including when and how these assets were acquired. List your family’s insurance coverage (medical, dental, property, auto, and life). Once armed with this information, you will be able to obtain a clearer understanding of your entitlement under the law.

Understand Your Monthly Expenses. Be able to articulate how much you realistically spend on a monthly basis both on basic needs and discretionary items. This fluency with regard to your expenses will enable you to better understand your needs on both a temporary and permanent basis.

Obtain Financial Records. Before you even utter the word “divorce” to your spouse, look for bank statements, canceled checks, tax returns, life insurance policies, credit card statements, closing records/binders, loan documents, etc.; make copies of those records; and keep them in a safe place.

Open Your Own Bank Account. It is important to have funds in your own name in case of an emergency and in the event that your spouse attempts to reduce your access to money and credit cards after your announcement. This will also enable you to hire an attorney when you are ready.

Build Your Credit. If you don’t have credit cards in your name, apply for them so that you can build up good credit. Use the cards and pay the entire balance each month. By doing this, not only will you establish your own credit, but it will enable you to document your expenses.