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How to prepare finances before a divorce

How to prepare finances before a divorce

Divorce is still a widespread issue, despite the fact that the number of marriages ending has been going down throughout the country in recent years. However, in 2015, the Michigan Department of Health & Human Services reported that 29,000 divorces took place within the state.

Most couples should be able to tell when divorce is imminent. Therefore, it works in the spouses’ best interest to start planning for the inevitable. Before seeing an attorney or filing any paperwork, it is vital for soon-to-be divorced couples to get their finances in order. In the event one spouse believes his or her partner would be difficult to work with during this process, then it should still be undertaken independently.

Eliminate certain expenses

Divorces can cost a lot of money, depending on how long the process takes. It is vital to prepare accordingly. Divorcing couples should begin to cut back on superfluous expenses so that more money can be spent on the legal requirements.

Open an individual bank account

Most married couples have a joint bank account. As soon as it becomes apparent that a divorce is around the corner, both people should open individual accounts. This can prevent one partner from taking advantage of the other’s finances. It may also be beneficial to cancel any joint credit cards and obtain individual ones.

Gather all documentation before seeing an attorney

There are numerous documents people need to provide to a lawyer before continuing with the divorce. Some typical forms that will be requested include:

  • Life insurance policies
  • Tax returns
  • Retirement plans
  • 1099 or W-2 forms from the last year
  • Bank account statements
  • Recent pay stubs

This information will help the attorney greatly. It can also be beneficial for the divorcing parties because they often learn something new about their financial situation.

Divorce is rarely easy. But by making adequate preparations, the process can go much more smoothly.

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