First Financial Steps When Preparing for Divorce
If you are contemplating divorce or preparing for divorce, getting your financial house in order is so important. It’s very common for one spouse to handle the finances and for the other to not have much knowledge of the financial situation. While this is fairly normal, it isn’t ideal, especially when heading into divorce. It is critically important that both spouses have a solid understanding and this begins with having access to all accounts, statements and documents. Plus assets can be hidden, debts can emerge and cash can disappear when the “D word” is uttered. Having at least three months of statements is helpful to ensure everything stays on the up and up! Hope for the best, but prepare for the worst.
Gathering the documents listed below will not only ensure you have full knowledge of what you own and what you owe, but you’ll also be prepared to start doing the divorce financial planning.
- Tax returns – Most recent year for business and personal
- Paycheck stubs for both of you
- Checking and savings account statements
- Credit card statements
- Mortgage statements
- Insurance policies
- Investment and retirement account statements
- Home equity or other loan documents
- Your credit report
- Child or spousal support documents from a previous marriage
What if I can’t find it?
If you are the spouse who doesn’t manage the finances, unearthing all of this paperwork is no easy task.
Here are a few tips to help your detective work:
- Call your accountant. He or she will have old tax returns as well as the supporting documentation. Be sure to advise them that you are requesting this confidentially if you don’t want your spouse to know you are contemplating divorce.
- Contact the IRS. Visit www.irs.gov/Individuals/Get-Transcript to order up to three years of previous returns.
- Contact your financial planner.
- Go through your home office files.
- Watch the mail to grab other documents you may not yet have.
- Access online statements. As long as your name is on the account, you should be able to call to get a username and password if you don’t have one already.
You now have everything you need to not only start divorce financial planning, but also to ensure you have full visibility of your financial situation. This will prevent your spouse from getting away with any shenanigans. Hopefully this wouldn’t happen to you regardless, but it does happen. It’s better to be safe than sorry.
Untangle The Knot will guide you through the next steps on understanding your current and projected financial situation, including considerations for decisions you will need to make and the financial gotchas to avoid. If you thought this was helpful information, sign up now for your Untangle The Knot service for immediate access to much more! You’ll also find helpful resources, including a financial checklist and toolkit, to make it just a bit easier to get your financial house in order! Check back soon for the blog on tips to safely store these confidential documents, and other important online security precautions to take before and during divorce.
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