Alimony & Spousal Support

What to do Before Filing for Divorce

March is the Hottest month for divorce filings, according to legal research database Westlaw- the peak of a rise that begins in January after the holidays are over and people’s “new year, new me” resolutions kick into gear.For those of you who see an end to your union in sight, taking some proactive measures can help you get your fair share of assets in the breakup and reduce your chances of getting socked with surprise debt. Plus, “you have the potential to save thousands in legal fees,” says Lisa Decker, a certified divorce financial analyst in Kennesaw, Ga. Here’s What to do Before Filing for Divorce you want out:

Gather Key Docs

“Once divorce has been initiated- and if the relationship becomes adversarial- financial information can disappear or become difficult to access,” says Carl Palatnik, a certified divorce financial analyst in Melville, N.Y. With that in mind, begin gathering copies of any documents that verify assets, liabilities, income, and expenses, like bank, brokerage, and retirement statements, tax returns, and property deeds- and the prenup, if you have one. This step can take three to six months, depending on how accessible documents are, adds Decker.

Having a paper trail saves stress and money. “You won’t be captive to your spouse, hoping he or she will provide things to you,” says Decker. Nor will you have to pay your lawyer to go after this info.

If you suspect your spouse is hiding assets or debt, keep an eye out for unusual withdrawals from existing accounts. And if envelopes from unknown banks or brokerages come in the mail, take photographs (rather than opening them); this evidence could give your lawyer ammunition to ask for records from that institution, says Decker.

Build Cash Reserves

Ideally you want to have a year’s worth of basic living expenses in a personal account prior to filing. If all your money is commingled and you have no way of opening your own account and making deposits without raising red flags, open a credit card with a low or introductory 0% interest rate.

This step is important because divorce proceedings could take six months or more-during which time you may have to find a new place to live and, if you’re a stay-at-home parent, you could lose access to spousal support. Also, you’ll need to lay out $10,000 to $20,000 for a retainer if you’ll work with an attorney or financial adviser, says Decker.

Sever Credit Ties

Finally, try to separate shared credit cards, says Palatnik. If your spouse is an authorized user on one of your cards, ask the issuer to remove the person since you could be held liable for any debt that’s run up. If you’re joint users, freezing the cards may be your best bet. But wait until right before the big announcement. Otherwise, the jig’s up as soon as your spouse swipes.

Reference: Farnoosh Torabi, Money Volume 44, Number, March 2015. page 34

Filed Under: Family Law; Divorce

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