Planning Your Divorce: Four Ways To Financially Prepare For An Unmarried Future

Posted on: 14 January 2015


A lot of people carefully plan their weddings - down to the last cookie and cocktail - but they don't plan their divorce, and that's a huge mistake. While you're probably not enjoying the prospect of your divorce the same way that you once looked forward to your wedding, you should use the time before your divorce wisely, because your life after the divorce is at stake. Here's 4 tips on how to make the necessary financial preparations for your unmarried future.

1.) Consider your timing.

Unless you're in an abusive situation, you need to consider the timing of your divorce. Whether your spouse is oblivious to your desire to end the marriage or the feelings are openly discussed and mutual, you should make certain that you don't damage your future by filing for divorce too quickly.

In many jurisdictions, the length of the marriage can control the duration of spousal support. It may also impact your ability to claim certain pension benefits. It will absolutely affect your ability to claim benefits on your ex-spouse's earnings through Social Security, should you ever need to do so, because you must have remained married for 10 years to qualify. 

You may simply want to wait until after you get your car fixed and the tax return comes in, so that you have a reliable vehicle and enough money to put a security deposit down on your own apartment. Or, you may decide to stay married until you finish some sort of vocational training or school, so that you can earn a better living after your divorce.

2.) Get all the documentation that you can.

Save yourself a lot of time and stress by getting copies made of all the important financial documents that you can locate. Make yourself copies of:

  • tax returns for the last five years
  • loan paperwork
  • credit card statements for the last year
  • bank statements for the last year
  • property deeds
  • car registrations or deeds
  • insurance policies
  • wills and trusts
  • 401K paperwork
  • stocks, bond, and other investment papers
  • property inventories used for insurance
  • copies of business records if either you or your spouse are self-employed

While you are in the process of gathering documentation, make new documentation if you think it's necessary. For example, take photographs of any valuable collections or personal items that are owned by either you or your spouse, including jewelry, artwork, limited edition items, automobiles, electronics and guns.

It's never a bad idea to take photographs of your home and possessions as they exist prior to the divorce being filed. It can make it easier to negotiate a fair division of household goods if you can sit down with a stack of photos, your spouse, and a mediator.

3.) Build your cash, your credit and your privacy.

A lot of people worry about how they're going to afford attorney fees, but they forget about all the other things associated with starting over in a new household. You need to be prepared for expenses like the security deposits on the utilities at a new place, movers, renter's insurance, and even things like cookware for the kitchen and towels for the bathroom. You need to start building your cash reserves, so that you can afford the basics once you separate.

While planning for your divorce you should also (discreetly):

  • Open a new checking and savings account in your name only. Consider joining a credit union and opening your accounts through it, because credit unions often offer other services (like micro-loans) that larger banks do not.
  • Open a post office box and make sure that mail from your bank, attorney, or any other sensitive source is directed to it.
  • Obtain a credit card, possibly two, in your name only, so that you start to establish a record of your financial responsibility as an individual, rather than as part of a married couple.
  • Obtain a copy of all three of your credit reports. This will let you examine the record for inaccuracies, and it may also reveal hidden credit cards or loans your spouse has taken.

4.) Keep your emotions about your finances under control, no matter what.

During the process of planning for your divorce, you may learn something about your marital finances that shocks and angers you. If you do, don't confront your spouse with the information until you've had an opportunity to discuss the situation with your divorce attorney, such as Bray & Johnson Law Firm.

If you find out that your spouse is hiding assets or income, you don't want to alert him or her of your knowledge. The same rule applies if you discover that he's taken out loans or credit cards that you don't know about. Vent to your attorney if you have to, but keep your spouse unaware of the information until your attorney advises you otherwise.