Deciding to divorce is a major step and often comes with many complicated emotions, fears and questions. Many people worry that divorce will ruin them financially.
Aside from child custody, the property division process is often one of the most contentious parts of a divorce.
Have a realistic attitude
It is true that a divorce will likely impact your finances. Even if you are financially well-off, you are going from two incomes to one, which is necessarily going to affect your overall lifestyle.
However, there are several steps you can take to prepare for your divorce. These tips can make the property division process go as smoothly as possible and increase your chance of regaining your financial stability post-divorce.
Property division involves identifying, valuing and splitting your marital property. This is property acquired during your marriage, with some exceptions.
Make a list of property and debts
Start by making a list of your property. Obtain documents showing the current value of the property or current balances of accounts. This will give you an idea of what you can expect to receive in the property division.
Marital debt is also divided in a divorce. Order copies of your credit reports so you have a full picture of your debt.
Start estimating your living expenses as a single person. If you are the one who will continue living in the marital home, learn about all expenses associated with the home and confirm that you can afford them. If not, consider selling the home or start planning ways to reduce expenses.
While your primary focus will be property division, at least initially, remember your insurance and estate planning needs.
Insurance and estate planning
Review your insurance plans and make sure you have appropriate, affordable coverage. Review your estate plan and remove your spouse from wills, powers of attorney or any other estate planning documents that you no longer want them to remain on.
These basic steps can go a long way toward keeping you financially stable before, during and after your divorce.