Divorce Financial Planning Checklist: What You Must Know
May 25, 2022 | Mason Roberts
Divorce is unpleasant and complicated. It is stressful for your emotions and your finances, but this guide will help you get through it as easily as possible. Your divorce financial planning checklist needs to include the following things:
- Hiring an attorney
- Creating a separation agreement
- Making a child custody agreement
- Itemizing your possessions
- Organizing your legal and financial paperwork
- Protecting your credit
- Having a backup plan in case of emergency
That’s the overview; now let’s dive into each in more detail.
Financial Planning Checklist During Divorce
Hire an Attorney
The first thing that you should do in the divorce process is hire an attorney. Even if the split from your spouse is amicable, you still want to have legal representation to help walk you through the complicated steps of the divorce process.
Create a Separation Agreement
The next step in the divorce financial planning process is to create a separation agreement. Sometimes couples will live together until the divorce is actually finalized. Usually, however, one of them moves out before the process is finished.
This will mean that you have to reevaluate your budget. Having a second household will dramatically increase your budget and you need to prepare for that accordingly. It is ideal if you and your spouse are both spending less than a quarter of your income on housing.
Make a Child Custody Agreement
Another part of divorce financial planning is creating a child custody agreement. Every divorce is complicated, but they are more complicated when there are children involved.
You should meet with a family law attorney who can help you come up with a child custody agreement. This will have an impact on your financial situation because you will probably have to come up with a child support agreement. You will also have to take other factors into consideration, such as travel expenses and babysitter fees.
Itemize Your Possessions
Part of the divorce process involves splitting your possessions between you and your spouse. Part of your divorce financial planning checklist should be making a detailed list of every item in the household that only you own. It helps to take pictures to go along with this list.
In addition to the items that you solely own, you should also make a separate list of items that you and your spouse own together. Having these two detailed lists will make things a lot easier when it comes time for a judge to rule on how your possessions are divided between you and your spouse.
Organize Your Financial Documents
Another aspect of your divorce financial planning should be gathering all of your legal and financial paperwork into one place. You should keep a binder so that you have all of this paperwork together in one place.
Some of the documents that you should gather include your marriage documents, tax returns, any real estate documents, business documents, and anything relating to your estate and end-of-life plans. You also want to have copies of bank statements, retirement accounts, credit cards, insurance documents, and any loans that you happen to have.
All of this information will be important during the divorce process, and you should have it readily accessible.
Protect Your Credit
Getting a divorce will not have an immediate impact on your credit score. However, if you miss a payment on any of your bills because of your divorce, it will lower your credit score.
Additionally, if you live in a community property state, you and your spouse will be on the hook for each other’s debts. This means that you can have your credit score lowered just because your former spouse is missing his or her payments.
Getting Help With Fast Cash
No matter what, divorce is complicated, and it can strain your financial situation. If you are facing a short-term cash flow problem as a result of your divorce and need to get fast cash in order to cover an emergency expense, you have options that you can consider.
One of those options is applying for a vehicle title loan from Southwest Title Loans. This vehicle title cash is a way to get money based on the value of your vehicle’s title, regardless of your credit score.
If you are getting a divorce, you need to carefully think about how this will have an impact on your financial situation. The best way to go about this is to hire a divorce attorney to help walk you through the complications of your divorce.
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.