1. Get professional help
Divorce is highly emotional, which means you might not always be thinking clearly. Having a team of experts by your side will help you rationally navigate the divorce process. A divorce attorney, certified divorce financial analyst and mental health counselor are all great resources during this stressful event.
2. Organize your important documents
As soon as you have made a decision about divorce, collect the following:
- Bank statements
- Credit card statements
- Tax returns
- Retirement account balances
- Appraisals for valuable items
You should also look for money being secretly withdrawn from bank accounts and double-check tax returns for unrecognized income. Then look for line items on IRS forms that might be worth money and should be factored into the settlement.
3. Get a copy of your credit report
Credit reports should be carefully reviewed and spouses should look for loans or accounts they don’t recognize. If these issues are noticed, your lawyer can help you determine whether or not you’re responsible for any debt that has been incurred without your knowledge.
4. Establish your own credit score
Your credit score can drop after a divorce, especially if you don’t have accounts only in your name. Apply for your own credit card before your divorce is finalized, although your score will take a hit. You can use this card to make a few purchases and immediately pay them off. Just make sure you don’t incur debt and rack up interest charges, as this will make a bad financial situation even worse.
5. Create a new budget
You shouldn’t assume your expenses will be cut in half because you’re divorcing. Housing, transportation and utilities will likely stay the same if you choose not to move. Expenses like insurance can even go up after a divorce. Sometimes divorcees can keep the same standard of living, but most of the time changes need to be made.
6. Review your estate plan
If you’ve listed your ex as a beneficiary, you need to change that before the divorce is final. You don’t want your ex-spouse to get your assets if something happens to you. It also may be necessary to designate a new power of attorney and update your health insurance forms for health decisions. This will ensure that your ex is not left in charge of your finances and medical care if you become incapacitated.
7. Wait on major financial decisions
After a divorce, take time before making big decisions. Many people act rashly during a divorce without considering long-term effects. Don’t make dramatic decisions fueled by emotions during and after a divorce, as this can destroy your finances forever. You’re already losing your marriage; don’t also lose your finances.