May 23, 2013

Preparing your finances for a divorce

Divorce often has a number of unavoidable repercussions on one’s mental health, stress levels, emotions and personal life. Fortunately, Michigan residents who take the appropriate steps can help ensure they do not suffer negative financial effects, allowing them to focus on addressing other issues raised by the dissolution of their marriages.

Individuals who are more financially prepared typically encounter fewer problems throughout and after divorce, as they are less likely to be surprised by unexpected results in the property division, child support and alimony processes. Consulting with a qualified family law attorney can also help divorcees better understand the ways in which their financial information affects their cases and how to minimize monetary damage.

A good way to handle the often intimidating sea of information needed to understand your financial situation is to gather any important documents and give them to an attorney, certified divorce financial analyst or accountant. The court will require you to present a financial affidavit containing this data, but collecting and assessing it in advance can give you time to ensure your assets are appropriately defended.

The documents you need include bank statements, credit card bills, insurance papers, loan applications, tax forms and returns, pay stubs and retirement plan data. An experienced attorney can give you advice on how to gather these documents and help you find those that are difficult to access. He or she can also help you close joint bank and credit accounts to ensure a soon-to-be ex-spouse does not withdraw your funds before the divorce begins.

It is important to remember that Michigan is not a community property state, meaning that the court should divide a divorcing couple’s marital assets in an equitable and fair manner but is not compelled to divide everything equally. As such, one spouse could be ordered to hand over a disproportionate amount of money or property to the other, depending on the financial circumstances and the assets each contributed to the marriage.

Source:  U.S. News, “How to Get Your Finances in Order Before a Divorce” Daniel Bortz, May. 17, 2013