Divorce Checklist
This is a basic list of ideas to consider before filing for divorce or at the beginning of the divorce process. The earlier in the process that these items are considered, the better you will be.
1. Establish your own credit. Make sure that you have at least one credit card in your own name. This will establish your own credit-worthiness, which is essential when you are on your own. Build a good credit history by paying off your balance regularly and on time. Open a bank account in your own name if possible.
2. Call an attorney. Legal representation is critical in any divorce that involves assets. In most cases it's insane for both you and your spouse to use the same attorney. Choose an experienced divorce attorney, who will listen attentively to you, conduct aggressive discovery of all assets and income, and respect you and your ideas. Interview several divorce attorneys if time allows.
3. Call a Certified Divorce Financial Analyst (CDFA). Working with a professional divorce financial analyst is essential if you have assets to divide. A CDFA will work at the onset with your attorney and/or mediator. He will take into account assets, income, tax consequences, college education funding, and project income and asset splits for each party far into the future. Your marriage is over, but your life is not.
4. Time your divorce: Strategy. Many spouses sit back and wait for their spouse to file and for their spouse to propose a financial settlement offer. Don't be the spouse that waits. Start to work with your CDFA to plan and implement your financial strategy first. Waiting can be costly. Many marital assets have been hidden and spent while the other spouse sits "waiting". Remember, if you don't have a strategy, your spouse certainly will.
5. Deal with joint accounts. Once you have your credit in place, inform any joint credit card companies in writing that you are separated and will not be responsible for any new charges. The balance, however, must be paid off before a creditor will close the account. Do not get divorced with joint accounts still open. Creditors don't care if you are divorced. If your name is still on the account, they will hold you responsible for the debt!
Make sure your brokerage accounts are frozen. Many a spouse has liquidated a brokerage account without the other spouse knowing it. It is illegal for your spouse to make transactions in a joint account without your permission. Notify your brokers of your impending divorce. And make sure they understand no transactions are to be made by your spouse.
6. Stay calm. Be pro-active. Don't drag your children into war. You might hate your spouse, but do you really want your children to hate a parent? They are children, not your convenient therapist. See a therapist if you need to. There is nothing shameful about seeking emotional help in an emotionally charged situation. Stay calm. Try to think logically and remember not to sit back and wait. If you know your marriage is over, take the steps to protect your financial future.
7. Make copies. This is a list of documents you should make copies of and retain in your records:
a. tax returns for this year and for the past several years
b. payroll check stubs
c. bank statements showing balances and activity
d. debt totals including credit card statements, mortgage statements and home equity lines of credit - run a credit report
e. cost basis information for all investments including stocks, bonds, stock options, annuities and homes
f. retirement account statements from current and previous employers
g. life insurance policies including statements showing cash value and debts outstanding
h. account statements for your children's benefit
i. documents to help determine family business valuation
Other ideas to consider:
8. Do not cancel any insurance policies until after the divorce is final. Health insurance or life insurance may be difficult to attain after the divorce is final - depending on your situation.
9. Change your will. You should update your will and/or trust agreements to reflect changes in your life.
10. If you have family heirlooms or small items that are extremely important to you in your house, consider moving them to secure storage. This could include jewelry, collectibles, antiques, or personal mementos.
11. Take control of all address books, telephone lists or calendars that are important to you.
12. Prepare a detailed expense and asset report for yourself. This will need to be completed for the courts later so get started now and you may remember important items to document.
13. If you are leaving the house, remember prescriptions and special medications.
14. Do NOT run up additional debt if at all possible. This debt will be yours after the divorce is final.
15. If you have a safe deposit box or safe in your home, inventory the contents and make copies of anything important.
If you would like to meet and discuss how we can help with your financial life, please call at 314-420-3409 or 800-451-3203. Also, please review the rest of our website for more information on our firm and how we are different than your normal financial advisor. www.DustmannGroup.com
