No matter how much a couple proclaims they will “fight fair” during their divorce, when it comes to money, the gloves often come off. Hiding assets, withholding information, spending down assets prior to or during the divorce, or recklessly spending money during an extramarital affair are financial mistakes family law attorneys hear about every day in the courtroom.
Whether you stay in your marriage or not, it’s important to have a good grasp of your financial situation.
Aimee Pingenot Key, a board-certified family lawyer with GoransonBain Ausley, says there are many ways one party can financially deceive the other in a divorce. “In marriage, everyone naturally takes on certain roles,” she says. “One may be better with managing money, so she is the one who pays the bills and makes the monthly budget while he handles household chores. Or, maybe she doesn’t want to deal with finances and leaves all money matters and decisions to her husband while she stays home and takes care of their kids. There’s nothing wrong with these arrangements–unless a divorce occurs. When one person has no idea about where they maintain savings, checking, and retirement accounts or about their total assets and debts, it can pose a real problem.”
Pingenot Key offers the following tips if you think divorce is eminent.
- Knowledge is power. It’s important to have a good grasp of your financial situation. You should know about your retirement and savings accounts, how to pay your credit card bills, how to find your tax returns, and obtain a copy of your credit report.
- Be prepared with financial documents and financial records, including tax returns to expedite the process. If you go in on equal footing understanding your financial estate in the divorce, you’ll have a better chance of a favorable negotiation. If you have to start from ground zero, learning about your estate, you can end up spending more time negotiating your divorce or can be manipulated into agreeing to a settlement that isn’t favorable to you.
- Start tracking household expenses. If you end up in court, the judge will determine temporary support and how to divide assets and debts. You want to be sure you know how much money is coming in and how much is going out each month. This will also prepare you for making a budget after the divorce.
- Have a financial roadmap. Define your financial needs now and in the future, so you can prioritize your short and long-term goals. Do you want to save for your children’s college or do you want to buy a home or remodel in the next 5-10 years? You will gain security and confidence about your financial future by taking steps to create a budget and plan for achieving your most important financial goals.
- Select the right family lawyer. Divorce is one of the most stressful times in a person’s life. Many people are full of uncertainty as to what their future will look like and how they will fare financially. With the right family lawyer, you can move from a place of uncertainty to control. Even though it does not feel like it now, with the right support and team of professionals, you will gain the knowledge, confidence, and tools you need to take charge of their future. If you are contemplating a separation or divorce and want to learn more about how to protect your financial future, please contact me or a lawyer at GoransonBain Ausley.