If you and/or your spouse are contemplating divorce, there are a lot of things to think about. Children, of course, if there are any, should be number one on the list.
Number two should probably be how you are going to make it financially. Most married couples have combined their salaries and bank accounts to make the most of their budget and spending. Now that the thought of ending the marriage is at hand, there are some important things to consider and prepare for:
Be aware that the same amount of money from both of your salaries will now be supporting two residences. Expect to have less money and budget appropriately.
Be honest about whether you or your spouse can afford to keep the house. Usually, one spouse opts to stay in the house, but sometimes it is better to sell the home, even if it means taking a loss. You need to consider all options, such as who will buy the other out if you keep the home? If you sell it, is there equity to be redeemed, or will you both be liable for a deficit?
Make sure you take inventory of all of your jointly owned assets. It is easy to forget about those commodities that aren’t on your radar, such as life insurance policies or investments. Your attorney will need a list for proper negotiations to take place.
When considering the value of assets, remember to deduct any tax liability that might reduce the value. For instance, an IRA is funded by pre-tax contributions; therefore, its worth should be valued after taxes are deducted.
Calculate your future needs. Take the time to do some realistic planning for your financial future. Be specific and detailed when it comes to your current and future expenditures.
Hire a good attorney and a good financial advisor to start your divorce proceedings. You may need to include others professionals, such as a mediator or counselors.
Source: Institute for Divorce Financial Analysts, “Surviving Financially After Divorce,” Fadi Baradihi, accessed Nov. 17, 2017