Couples who can no longer stay together may decide to go their separate ways by getting a divorce. The fact remains that getting a divorce has a lot of financial implications for both parties. Apart from hiring a qualified divorce lawyer to handle the case, there may also be other demands that can affect your finances.
“It is hard to determine the amount of money a person will spend to see their divorce through from the onset,” says Samah T. Abukhodeir, lead attorney at The Florida Probate & Family Law Firm. While it is certain that one will have to spend a considerable amount of money while carrying out the divorce proceedings, knowing what to do to protect your financial interests will go a long way to ensure that you minimize your losses.
Steps to Take to Protect Your Financial Interest in a Divorce
While going through a divorce, taking the following steps will be a big help to you.
#1. Hire an Experienced Attorney
Hiring an experienced divorce attorney is vital to securing your finances in a divorce. While it is possible to file and complete the divorce process without the help of an attorney, you may run into some hurdles or fail to take necessary steps that may be to your detriment.
An attorney has a wealth of experience handling cases like yours and already knows the pitfalls you may encounter along the way. Therefore, they are in the best position to advise on what to do to get the best outcome. While a “do it yourself” approach may sound enticing because of the money you may save at the time, hiring a lawyer will help protect you from losing out in a divorce settlement.
#2. Take an Inventory of All Assets and Debts
To adequately protect yourself, you will first need to know what you have as an individual and what you jointly own with your partner. Find out how much money you have and the amount of debt you owe. Your attorney can be very resourceful at this point and walk you through the process.
You may need to gather all the documents relating to your finances, such as financial statements, tax return, loan application documents, real estate documents, and insurance policy documents. Having these documents where you can easily access them is crucial for building your case and getting a fair settlement. During the inventory process, you will be able to identify the assets you own so that they will not be included in jointly owned assets.
#3. Work at Getting a Separate Account
Some couples maintain only a joint account for monetary assets. During a divorce, one of the parties might withdraw the money from the joint account. Therefore, you should make efforts to move some of the money in the joint account into an individual account for protection.
However, you must maintain a high degree of transparency while doing so, as any form of secrecy can impact your credibility and jeopardize your case. Your attorney will provide the necessary guidance on how to move your money.
#4. Maintain Transparency Throughout the Process
Once the divorce proceeding commences, any action a person takes at that point can impact the divorce outcome. There are a lot of factors that courts consider in determining the divorce settlement amount to be paid to each partner.
Once the divorce proceeding commences, the parties are not allowed to make any major financial decisions without the other party’s consent. It is best not to make any rash decisions at this point, since something as minor as a change in employment to a lower-paying job may be interpreted as an attempt to shy away from paying child support. Therefore, you must think every action through and be open at all times.
#5. Value Your Properties and Business
Marital properties are usually divided equitably, not equally, in a divorce. You need to know how much your properties and businesses are worth. Valuing the properties may require the services of an expert valuator to get the correct value.
There are different valuators, including appraisers, digital forensic experts, pension valuators, business valuation experts, and others. Each valuator may be needed, depending on the type of property you want to value. For instance, a digital forensic expert will help go through your financial statements to determine your financial standing, while an appraiser’s work revolves around getting the value of your home and other real estate properties.
#6. Look Into Child Support
Children are a vital part of many marriages and should be considered while filing for divorce. After the marriage has been dissolved, the custodial parents would receive child support to cater to the needs of the minors. Therefore, it is important to carefully calculate all that the child will require and come up with an estimate that covers those expenses.
It is easy to see how someone might believe that the little expenses do not matter and could easily be covered-up. However, when you add these up in the long run, you will discover that it can lead to a considerable sum. Your lawyer could provide helpful guidance on how to navigate this challenge.
#7. Have an Emergency Fund
An emergency fund is very important and you do not have to wait until you have filed for divorce before creating one. This account does not have to be kept a secret so make sure that your partner knows about this. An emergency fund makes it possible for you to take care of daily needs while the proceeding is ongoing, without relying on what you own jointly.
#8. Try to Maintain a Clear Head
Going through a divorce can have a massive strain on your emotions, which could cause you to do something that has a negative impact on your case. For instance, you may want to keep the house you are living in because of your attachment to it, without considering the implications it might have on your finances.
It is best to talk things through with your lawyer before arriving at a decision. With the proper guidance, you will come out of the process in good financial health.
Wrapping Up
Getting a divorce may be the next logical step, especially where the parties have irreconcilable differences. The impact of a divorce on your finances can be managed properly if you know what to do at each point. It is vital to engage in the services of a competent and experienced divorce lawyer to guide you through the process.
