You’ve decided to get a divorce. Choosing to end your marriage was one of the hardest decisions you’ve every had to make. But now that the decision is behind you, it’s time to determine your next move. The steps you take from this point forward will have a major influence on how you fare after you and your spouse go your separate ways.
Below, we’ll provide a step-by-step guide for preparing for your divorce. Each step is important. Skipping any one of them will set the stage for major headaches later.
#1 – Get Your Finances In Order
Your finances are one of the most important items to address. Most people suffer a financial hit after divorce. Some recover quickly while others struggle for years.
The first step is to know where you stand with regard to money. Gather statements for your credit cards, checking and savings accounts, and brokerage accounts. Also, collect cancelled checks, payment stubs, income tax returns, and loan statements (including your mortgage). If you or your spouse own a business, obtain copies of the profit and loss statements, documentation addressing ownership, and income tax returns filed on its behalf. Lastly, gather any deeds and other documents related to property owned by you or your spouse.
#2 – Protect Your Privacy
It’s not uncommon for one spouse to go through the other’s mail when the relationship is experiencing problems. If you feel this might be the case with your future ex-spouse, consider getting a private box at your post office. Rather than having important mail sent to your home, have it sent to the post office, where you can pick up personally.
Having a P.O. box ensures that you’ll be the only person who reads your mail. It also prevents delays, as might happen if your spouse keeps your mail from you.
#3 – Create A Post-Divorce Budget
Will you have enough money to survive after the divorce? Will you have enough to pay your bills and buy food, clothes, and other necessities? Will you be able to save for the future and fund your retirement plan?
These questions can be answered by creating a budget. It will reveal whether you’ll encounter a financial shortfall months and years down the road.
#4 – Start Building Financial Independence
As we alluded to above, one of the keys to post-divorce survival is being financially independent. That means being able to obtain funds when doing so is necessary. It sounds simple, but is actually a common problem for individuals whose spouses handled the finances in their relationships.
First, open your own checking and savings accounts. Doing so keeps your money separate from your spouse’s and safeguards it. You’ll be able to pay your monthly bills without asking your spouse for funds. Also apply for new credit cards in your name. Get an early jump on building your credit.
Second, start saving money as soon as you decide to go through with your divorce. You want to have funds available to pay for legal representation. Otherwise, you might find yourself at a severe disadvantage when negotiating a settlement.
#5 – Review Your Credit Report
Your credit is one of the keys to your future financial independence. Obtain a copy of your credit report and review it. Look for errors. If you find any, take steps to resolve them.
Also, look through the report and identify joint accounts. If you and your spouse share a credit card, you are responsible for the debt he or she incurs. Close all joint accounts as quickly as possible.
#6 – Update Your Will, IRA, And Life Insurance
Don’t neglect to change your will when you get a divorce. If you’re like most married people, it probably lists your spouse as the recipient of a majority of your assets in the event of your death. Take the time to update the information.
Your life insurance policy and retirement accounts list beneficiaries. When you pass away, these individuals receive a death benefit or a portion of the assets in the account on which they are listed. Don’t forget to update the information if your spouse is listed as a beneficiary.
#7 – Update Your Advance Health Care Directive
An advance health care directive (sometimes called a living will) identifies the person who has the authority to make medical decisions on your behalf. After your divorce, update the directive to appoint a new “agent.”
Note that each of the 7 steps above further separates you from your soon-to-be ex-spouse. That’s an important part of getting back on your feet after splitting up. It’s possible to be friends – even good friends – with your ex. But do so after making sure your independence is secure.