First and foremost, become informed of what is out there. All too often, we get clients that, despite being in a position where they are the main income earner of the marriage, have left their spouse in full control of the finances. While this may have been convenient during the relationship, it is imperative that you become informed on not only what is coming in, but what is going out. Each party will be responsible for completing their own financial disclosures, and you do not want to be in a position where you are asking the spouse for the required information.
If your name is on a bill or other account, even if you have never accessed it previously, you can get the required information directly from the provider. This includes current balances as well as previous account information. You also have access to one free credit report each year. If you have never run your credit report or if it has been a while since you looked at the information, it is always worthwhile to pull it. If there are any accounts that you have no knowledge of or that you may have simply forgotten, it’s the easiest place to find them.
I would highly recommend speaking with your attorney to come up with an individual plan when it comes to financial issues, as the advice will largely depend on your individual situation. Most importantly, knowledge is power, so become informed!
During a divorce, you should get a clear understanding of all of your property and debts. Oftentimes, one spouse handled finances in a marriage and that leaves the other without an understanding of what property and debt is involved in your case.
Start collecting information such as copies of your tax returns, bank statements, retirement accounts,and life insurance policies. Remember to run a credit report to make sure you know all of the credit cards in your name, which can tip you off to see if your spouse is opening cards in your name. It is also important to make the proper beneficiary designations after your divorce is final and update your will accordingly.
Assuming the husband is the higher wage earner, there are some things that can be done to help secure their financial future, but there is no doubt that their financial obligations will increase pursuant to a divorce, which makes the years following the divorce a financial strain more than what the you were used to during the marriage.
Guys should have their attorney run support guidelines to determine an approximate amount of support they should expect to pay for any children and the dependent spouse. This will assist in budgeting and planning for the future.
The longer the parties may cohabit pending the divorce the better in terms of finances, because often there will be no support obligation, or a reduced one, pending cohabitation. (Obviously, this may not appropriate or possible in every case). This allows the financially independent spouse to preserve some funds for when the parities do live separate and apart.
Guys should also remember to conserve attorneys fees where possible and to discuss how to do this with his attorney. For example, our attorneys will lay out all options for our clients, as well as the costs associated with each.
Decisions need to be made considering your financial future while also protecting your interests in the litigation. That said, decisions pending your case should not be made based on principle or in an effort to make the other spouse’s life difficult – all that leads to is throwing good money after bad.
Once a divorce is pending, be sure to check with your attorney before making any financial decisions. This includes everything from opening another account to changing cell phone plans. Sometimes courts require that every penny is recorded and accounted for, while others have mandatory injunctions that requires both parties to maintain status quo while the divorce is pending.
Remember that nothing changes a court order but another court order. What may seem insignificant, such as cutting HBO, may be a violation of a court order. Talk to your attorney before making any changes. You could end up in jail for contempt or may be at fault with a smaller division of the marital estate, depending on the state.
Securing your financial future during and following divorce can be incredibly difficult and varies significantly from case to case and can mean different things to different people. If you are the spouse in the relationship who has been the primary earner and you are dissolving a long-term marriage, you’re probably going to have to modify your plan for your financial future.
For example, if you thought you had $500,000 in your 401k set aside for retirement, and that’s being divided between you and your spouse so now you only have $250,000, you may need to consider working with a financial advisor to figure out the best ways to invest strategically to try to recoup the retirement funds you lost in divorce.
If you are on the other side of the situation and your wife has been the primary earner, do not hesitate to seek child support and maintenance and any assets you may be entitled to if it is a longer term marriage and your attorney is advising you that you may have a right to receive money from your spouse.
Finally, don’t allow the divorce itself to ruin your financial future. I have seen clients fight so much in their divorce that they both go into debt to an extent that is irreparable and they make a difficult financial situation far worse than it has to be.
Divorce is a struggle emotionally and financially. Common situations with finances that men will face including going from a two-income household to one, or having expenses / income related to child support or spousal support. Also, men may have to pay attorneys fees for the divorce process.
The first step to secure a good financial future is to understand that there may be a period of time to rebuild financially and you will have to make some sacrifices to recover. The second step is to make sure that any settlements are made to provide the best advantage from a tax perspective. Finally, you need to listen to the advice of your counsel.