How to Plan Financially For Divorce
Few people get married with the idea that divorce will be the eventual
outcome. However, if you do find yourself contemplating dissolving your
marriage, there are some important steps you can take to protect yourself
and your assets to prepare for when the divorce action is actually filed.
The divorce attorneys at our law firm believe in offering comprehensive
divorce help, advice and preparation, which can be essential for issues
such as property division and asset separation when negotiating or litigating
a divorce settlement agreement. Below is some advice we encourage people
who are contemplating divorce to read and think about.
Top 10 Steps To Financially Plan For Divorce
Save — It is essential to prepare for a potential divorce by saving at
every opportunity. You may want to think about adding cash to your purchases
at grocery stores and slip small amounts into an account in your name.
Do not leave the statements where they can be found by your spouse, but
know that the accounts will have to be disclosed to your spouse as part
of the dissolution action. The point is to have some back up funds for
those unexpected financial needs.
Copy — Gather and copy all the financial paperwork in your household,
and KEEP THEM SOMEWHERE ELSE. Copy statements from all checking, savings,
investment, 401(k) and pension accounts, as well as employee stock purchase
plans, stock options, stock awards, real property purchases and sales,
tax returns and pay stubs, and print out your computer records such as
Review and print out pertinent emails. Copy your wills and community property
agreements. Copy all business records if your spouse is self-employed.
The more you do now, the more you save in the long run. Most importantly,
you and your attorney will be informed as to the real status of your financial
Plan — Look at all of your expenses over the past two years and prepare
a budget of your needs. You should find out the balances on your debts
and what the monthly payments will be. Take some time to understand and
familiarize yourself with the details. Make a list of each financial institution,
its address, account number, etc. Know how much you spend for your children's
expenses, including clothing, sports, lessons, schooling and other extracurricular costs.
The more you understand your finances, the more you will save in future
effort and fees. Make a plan. It may take several months, so be patient.
Most importantly, you will be prepared with the answers the court will
need if and when the court is involved in your situation.
Discuss — It is advisable to discuss your financial situation with a certified
public accountant (CPA), but not the same one who prepared your joint
tax returns with your spouse! Also, discuss your financial situation with
a certified financial planner.
Consult with one of our experienced family law attorneys so you are informed as to the particular law in your area. Confide in
a few close, trusted friends or family members. It is a good idea to ask
for their emotional support because this can be an extremely stressful time.
Credit — If you do not have several credit cards in your own name, get them
now. Obtain a copy of your credit report and examine it carefully. Make
sure it is up-to-date and correct. If you can do so, talk to your spouse
about checking his or her credit report and giving you a copy.
Taxes — Do not fall behind in your payment of taxes, both state and federal.
Make sure that all tax returns have been filed. Decrease your liabilities.
However, do not make the mistake of selling off all your assets in order
to pay off your debts.
Understand — Many people misunderstand the difference between equitable and
equal. In Washington state, the law requires that a settlement be fair
and equitable but that does not mean equal. Every asset does not have
to be divided equally. Taxes, capital gains, inflation, work history,
your needs and various other issues must be considered in order to arrive
at a fair settlement.
Education — If you are the financially disadvantaged spouse, research and consider
your options regarding going back to school to further your education.
You may want to talk to a vocational expert and explore your options.
Consider also the future educational needs of your children. Saving for
a child's college education is even more difficult after a divorce.
If possible, start contributing now toward a 529 educational or other
similar plan that shelters the funds from taxes.
Confidentiality — If you are going to do any research, contact an attorney, certified
financial planner or certified public accountant, or discuss the situation
with friends and family by email, then create a new email account to use
and take all necessary steps to make sure that your spouse does not know
about the account. If you contact an expert by phone, use a phone that
your spouse does not have access to. Keep in mind that you are preparing
for a divorce. You are not doing anything unethical; you are protecting
yourself and your situation.
Children — When you feel ready with your decision to divorce, talk to your
attorney FIRST. Then follow his or her recommendations on how best to
proceed given your individual circumstances. Do not involve your children.
Plan ahead by gathering information to assist you if you feel that parenting
of the children will be disputed.
Keep in mind the bottom line: You want to be financially and emotionally
stable when all is said and done. The best way to ensure a good outcome
is to plan and find a family law attorney and other experts whom you can trust.
We invite you to call our firm at 425-276-7677 regarding your specific
situation. Or, if you prefer, complete our
At O'Brian & Associates, we are here to help people when life changes
and financial planning and divorce become a reality that needs to be faced.
We believe in being proactive in helping clients, and we are diligent
when it comes to protecting our clients' interests.
For more information about how we can help you if you believe divorce is
on the horizon, please give us a call today at
425-296-2778 to schedule an appointment with a lawyer. Based in Redmond, we serve clients
on the Eastside and throughout the Seattle area.
Additional Resources on Divorce
Learning to Leave - a Women's Guide by Lynette Triere. Available through
Fair Share Divorce for Women by Kathleen Miller
Crazy Time: Surviving Divorce and Building a New Life by Abigail Trafford.
Does Wednesday Mean Mom's House or Dad's? By Marc J. Ackerman,
Ph.D. Available on
Surviving the Breakup by Joan B. Kelly and Judith Wallerstein. Available on
What About the Kids? Raising Your Children Before, During, and After Divorce
by Sandra Blakeslee. Available through