Pending Divorce? How Your Financial Management Needs To Change
Wednesday, February 17, 2016, 6:00 AM | Leave Comment
Divorce often brings a combination of emotional and financial stress. Fortunately, if you’re dealing with a pending divorce, you can minimize your monetary concerns by taking a direct approach to organizing your finances.
A lot of time and headache can be saved during the divorce proceedings if you gather the necessary financial documents ahead of time.
We’ll cover the documents you may need as well as ways to change your financial management to ease the process.
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Mandatory Documents
The required documents for divorce proceedings start with mandatory disclosures, which require both parties to produce a large number of financial documents.
For this you might hire a certified divorce financial analyst to assist in compiling this information while also offering advice on what’s worth fighting for when it comes to negotiations.
All divorce proceedings require a financial affidavit outlining earnings, assets, living expenses, and liabilities. Every state has its own definition of what mandatory disclosures entail.
For an idea of what you might need, here are some important documents:
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W-2, 1099, and K-1 forms from the past year
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Bank statements, including checking, savings, and credit cards
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Three months of recent pay stubs
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Life insurance
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Retirement plans
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Personal property tax returns from the last three years
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Lease agreements, deeds, and specified loan applications
If you’re a stranger to your financial situation, retrieving such information can be overwhelming. Consult with your attorney if you encounter problems and they can help you collect and prepare these documents.
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Credit Report
It’s important to look at your credit report before a divorce trial. Closely review your credit history to make sure your there are no errors and to make sure that your spouse hasn’t missed any payments on a joint account or engaged in any other behaviors that can damage your credit.
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Separating Your Finances
After divorce has been filed for by either party, begin separating your finances, starting with the closing of joint accounts.
As long as you have joint accounts that are open, both parties are 100 percent responsible for any debt incurred by either person.
Create a payment plan with your spouse in the event that you can’t afford to pay off debt on a joint account.
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Mediation
If you and your spouse fail to reach an agreement about the division of property prior to the divorce filing, you may need to attend court-mandated mediation.
In mediation, a neutral third party will try to help you and your spouse reach an agreement on the division of financial assets and other property.
A specialist with a top family law firm In Salt Lake City says a judge will determine how your property is distributed if a mediated agreement is not met.
To be prepared for the property division process and possible mediation, take inventory of your financial situation and establish your priorities before filing.
Although it requires a lot of time and effort, you can save a substantial amount of money in discovery fees if you compile your personal financial documents without much reliance on your lawyer.
Getting your finances in order is a worthwhile effort to minimize the financial stress of a divorce.
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