Are you prepared for life after divorce? If you’re only just starting to consider divorce, chances are you haven’t give much thought to your future finances. You have a difficult decision to make, but it never hurts to plan for any eventuality. Follow these steps early on to protect your money and your financial standing before the divorce process begins.
Step 1: Grow Your “Rainy Day” Fund
That’s why you have one in the first place. Once you begin the divorce process, you’ll need to have cash on-hand to pay for legal fees, moving costs, and other immediate expenses. You should also have ample savings to support yourself and your children for a few months, just in case. You may want to examine your career opportunities and plan for your future, especially if your spouse is the sole breadwinner in your household.
Step 2: Open New Accounts
Visit a new bank—separate from the one where you have your joint bank accounts—and open checking and savings accounts in your name. Depending on your state, your divorce lawyer may advise you to withdraw a portion of your joint funds and deposit them into the new accounts. Either way, use these accounts to build up your rainy day fund.
Step 3: Keep Records
Good record keeping will increase your chances of succeeding in any disputes that may come up in the divorce process, especially if it goes to trial. Your records can also help you calculate a realistic alimony request. Make copies of these financial records and keep them someplace safe:
- Bank account information
- Credit card bills
- Mortgage statements
- Tax returns
Step 4: Work On Your Credit
Request a copy of your credit score and credit history from the major reporting agencies. You may discover financial information, like accounts or debts, that your spouse never mentioned to you. You can also use your credit rating to get a sense of your own financial position. If you have a smaller income, you may have a hard time establishing credit on your own after the divorce. Open a new credit card account in your own name—before entering the divorce process—so you can work on your credit and build financial stability. If possible, you can also work to close joint credit cards and accounts to avoid the possibility of sharing debt.
Step 5: Look at Your Insurance and Retirement Plan
After you’ve divorced, your financial resources will look much different once they’ve been divided between you and your ex-spouse. This is even more noteworthy if you’re close to retirement. Check to see if your life insurance and disability insurance are up-to-date, make sure you have a decent retirement package, and look into any benefits that are specific to your situation.
Step 6: Meet With An Attorney
Your lawyer will be the best source of information on your path to divorce, and it’s never too early to make an appointment to discuss your needs. You can get tailored legal counsel from the knowledgeable divorce attorneys at Bedlam Law. Call us today to start planning for a smooth divorce and a stable financial future.