Introduction

Divorce is usually a stressful period in the life of individuals due to the emotional and the financial losses that they undergo. The nature of assets and finances requires certain measures to be taken to safeguard your financial rights. This is where getting the right legal and financial advice is very important so as to arrive at a fair award and a sound financial future after the divorce. The following is an article that contains some advice and guidelines that one needs to consider to ensure that their assets are safeguarded during a divorce process.

Seek Legal Advice

The first and probably the most important is the selection of a professional divorce lawyer, no matter how friendly the spouses are planning to part ways. A lawyer can inform you of the laws in your state, safeguard your interests, and give you an idea of how your property may be split. In particular, if there are many and/or complicated items in the property (such as a house, investments, pensions, or business), you should be advised by a specialist in divorce law and money. A lawyer will assist in identifying all the marital property, establish the worth of such property, and seek the best way to get a fair share.

Prepare a Balance Sheet and Record All Assets and Debts

You also require a list of all the property that was owned before marriage and acquired throughout the marriage, as well as, all the debts incurred during the marriage. This includes things like:

– Building or other real estate interest

– Joint or separate bank accounts

– Brokerage accounts and retirement savings such as 401(k)s and IRAs

– Pension plans

– The life insurance policies that include an investment element

– Businesses

– Vehicles

– Other items precious in the same regard as jewelry, collections and etc.

Acquire all financial statements possible to obtain and photocopy all the available documents. Also compute mortgage balances, credit card balances, auto loans, and all other types of debts. These paperwork will assist when it comes to division of property.

SecureSeparate Bank Account

The moment you decide divorce advice you are going to seek a divorce, it is wise to open a new checking account in your name only. Ensure that you inform the bank that all communications be forwarded to your place of work or P.O. Box. This will allow you to have an immediate source of funds apart from the joint account that your spouse has access to. From this point forward, deposit your paychecks into this new, separate account.

You can use this individual account pay bills accruing from the divorce process as well as to cater for your needs. It shields you from the risk of your spouse making large withdrawals from the accounts that you have jointly opened. Ensure that any money that you transfer from the joint account to individual accounts before filing is reported and justified later on.

Cancel Joint Credit Cards

If you have credit cards that you and your spouse use together, you should contact the credit card companies the moment you make up your mind to get a divorce, before your partner accumulates a huge bill. Request the company to block the account from accessing any new charges without your prior permission or approval. A few issuers will allow you to change joint accounts to those in your name only. This safeguards your credit by making certain that any recently accumulated obligation is billed to your partner.

This is one area that you should be very careful with your retirement accounts.

A few of the most valuable properties a couple gains through their marriage includes retirement plans. In dividing retirement plans such as 401(k)s, IRAs, pensions, etc as property distributed during the process of divorce, the aim should be to divide the asset and its appreciation up to the time of division, without at the same time incurring taxes or penalties. There are some rules and regulations for IRS that make it possible to divide retirement accounts without imposing taxes. For more information on the details, you can consult a financial advisor.

It is also crucial not to withdraw or transfer wealth from retirement accounts without knowing the repercussions. The decision to withdraw could lead to taxes as well as penalties that can later on decrease the value of an asset. Just be patient and do it right by making sure your accounts are officially segregated according to the divorce decrees.

Think About Valuing Assets Prematurely

Obtain professional appraisals of all the principal assets as soon as possible before the date of the spin-off. Assets such as land and buildings, interest in a business, some personal assets, and investments may require a certified appraiser to come up with the fair market value. The last thing you want is for the value of assets to be assessed after months of the separation when the markets could be far from the levels recorded at the separation date.

Protect Business Assets

If either one of you own a business wholly or partially, special care should be exercised to safeguard this particular asset. To start with, you will require an experienced business appraiser to determine the fair market value of the business at the date of valuation based on sales, profits, assets, liabilities, condition of the market, and goodwill.

You also need to retain copies of all legal, financial, and tax documents relating to business assets and operations. Also, learn about any of the business partners’ buy-sell agreements and rights of first refusal that may affect what becomes of the business during the divorce.

This goal is usually to hold ownership interest in the business while your spouse gradually buys out that share. This preserves your future earning capacity. However, if you are not interested in operations, you may wish your spouse to retain the business while you receive other assets of the same value.

Don’t Forget Insurance Policies

Other assets that should also be considered part of the divisible marital estate include life insurance policies with cash value, independently purchased disability insurance policies, as well as deferred compensation programs. Your lawyer will make sure that you get to retain possession of these assets as provided by the divorce agreement. This involves having beneficiaries legally altered as required.

Choose other methods of conflict solving

If a couple wants to save money and emotional energy on the process, they can consider more friendly methods, such as collaborative divorce or mediation. This makes conflict levels less, solutions less combative and more interest-based, and costs less than continuing the litigation process. Selecting the proper litigation attorney who prefers to settle cases logically rather than engaged in a legal battle can save a lot of stress and funds.

Make A Post-Divorce Budget

To secure your financial well-being, hire a different financial planner to develop a long-term financial framework after the divorce. This plan should include your income, living expenses, assets, liabilities, insurance, retirement savings, college savings goals, and other obligations. It assists to guarantee that your settlement amount is being invested appropriately so that your money is generating returns and your requirements are being met. You would like to maintain your living standards to the greatest extent possible even after the separation.

Conclusion

Divorcing couples face a lot of stress to deal with issues such as division of property, assets, liabilities and accounts. Economic futures also have been found to elicit emotions, although these can be particularly intense in some cases. Make sure to have legal support and financial advice throughout the process. To prevent such occurrences, proactive measures such as registering separate accounts, cataloging assets, seeking appraisals, and considering post-separation safety. Albeit, you cannot avoid the pain of dissolving a marriage, at least you can attempt to make the divisions of properties polite, fair and favorable to your fiscal future. That is why you need to seek divorce financial advice so that you have the best shot at being financially stable and prosperous after the divorce.