Be Wise About Your Finances During Marriage and Divorce
February 15, 2017
The old saying goes that marriage is about love and divorce is about money. No matter how wonderful your marriage is, it is a good idea to be knowledgeable about your assets and debts. No matter how amicable you think your breakup may be, don't underestimate the importance of protecting yourself and your future financial wellbeing. This is not as crude as it sounds. The sooner you start seeing yourself as a competent, strong, and self-sufficient individual, the healthier you may feel and, more likely than not, the smoother any divorce process may be.
So here are some quick tips:
- Learn about your finances– gather as much information as you can about your assets and debts. If you are the one who pays all the bills, does the investing, and manages the money, this is easy. If you are not that person, then start learning…quickly! It is not an excuse to say, “I don’t know …She pays all the bills.” Gather documents. Get photocopies of 3-5 years of the last filed tax returns; all recent bank, investment, retirement and credit card statements. Keep these documents in a safe place and update them regularly.
- Understand what is yours- it may not always be clear what is marital property and what is not marital property; nor may it be clear what your share of the property is or will be. Pennsylvania is what is called an equitable distribution state – equitable means fair—not equal. There is not a presumption that everything automatically will be divided 50/50. Percentage division is based upon a number of factors. Also, the nature of what is and what isn’t part of the marital estate may change based upon if , and when, you and your spouse separate. Inheritances, are they marital or not, can be tricky. The best way to understand what is yours now and going forward is to meet with an experienced matrimonial lawyer and explore your situation.
- Establish your own credit- if all your credit cards are jointly held, now is the time to apply for credit in your name alone. Start using that card and pay it off each month. Use this as a method to establish good credit in your name. A good credit rating is essential for many things that you may need down the road, such as qualifying for a lease or a mortgage. Also, open a bank account in your name only. Whether to close joint accounts at this time is something you should discuss with your attorney.
- Pay attention to the details- as they say that's where the devil lies….if previously someone else was paying the bills, or managing the investments, now is the time to get more involved. Review the statements and watch for in flows and out flows. If your spouse never made voluntary contributions to a 401(k) but all of sudden is adding $2000 a month on top of what the employer contributes, take note. Is there a new client in the Cayman Islands? Get your radar up…
- Find a Financial Planner- If you are overwhelmed, feel like you do not know where to begin, are worried whether you will have enough money upon which to live out your life, have come into significant funds after divorce, or just need some advice, find and meet with a reputable financial planner. This can be very helpful. Most planners will not charge a fee for an initial consultation.
If things are rocky at home, hopefully they will improve with good communication and care. However, be wise and be proactive to preserve and protect your financial interests. Some people engage in “ divorce planning” long before they announce their divorce intentions.
If you would like to speak with an experienced attorney about any of these tips, or any other concerns, call us at Bookspan Family Law, LLC 610 565 6200