Is anyone ever prepared for divorce? In my practice I have seen on more than one occasion, individuals who are knocked off balance when one spouse starts the ordeal with "I want a divorce." Here are some tips to help you prepare for the financial implications of divorce.
1. Have access to funds and credit. Individuals may find themselves at the beginning of the divorce process without enough money to hire a qualified divorce team. If you're thinking about divorce, you need to immediately begin to set aside money for the expenses involved Even if you're not, it's important to have funds available to you in your own name, entirely separate from joint accounts. Maintain a credit card in your own name as well; it may be hard to obtain one later.
2. Have important documents on hand. Make copies of all your financial documents and legal records before your divorce proceedings begin. Include tax returns, bank and brokerage account statements, wills and trusts, insurance inventories and policies, property deed, vehicle titles and registrations, etc. Keep the copies in a secure location not accessible by your spouse.
1. You should have a working knowledge of all your marital assets. Don't forget pensions, deferred compensation, retirement investments, stock options, life insurance, annuities, and even country club memberships, accrued vacation time and other executive perks.
2. Keep in mind that an equitable division of property does not necessarily mean a 50/50 split. Georgia is an equitable division state and the length of the marriage, income, and future earnings capacity may all be considered.
THINK FOR THE LONG TERM
1. Stay mindful of the difference between asset value and asset worth. Getting to keep a paid-off house worth $750,000 may seem like a terrific deal, but don't forget that the worth of the asset is lessened by the costs of maintaining it.
2. Fully evaluate how your divorce settlement options affect your future financial security. Remember you get one shot at this, and there are many angles to consider. Work with an accountant to analyze all the financial implications, including income and tax consequences, of various settlement scenarios. What seems like a great deal now may spell disaster 10 years down the road. Do the assessment work ahead of time to make the wisest choice.