Many people focus on the emotional stress that can come with a divorce. While this is certainly an aspect of it, there can also be a large degree of financial stress. Divorces can get costly, especially with increasing levels of litigation. There can also be added stress if one spouse mainly handled finances and you do not have much knowledge about your financial assets.
Here at John R. Foley, P.C., we can help. Our family lawyers are expert litigators and are extremely knowledgeable about all aspects of a divorce, including child support and alimony. If you are in the Dearborn area and are in need of a family lawyer, then we could be right for you. Schedule a meeting with us today to discuss your upcoming divorce, along with any needs or concerns you may have (financial or not).
In today’s blog, we will share eight tips our family lawyers recommend for navigating the financial waters of a divorce. If you have any questions or are simply ready to begin the divorce process with a family lawyer on your side, then contact John R. Foley, P.C. in Dearborn today.
Choose a Family Lawyer Within Your Budget
First and foremost, our family lawyers recommend choosing a divorce lawyer whose fees are within your budget. Of course, we hope this never limits your options or prevents you from working with your dream lawyer; however, choosing a family lawyer who is not in your budget can place unnecessary financial strain on your budget leading up to and following your divorce.
If you and your spouse are amicable regarding the divorce or are at least open to communication and agree on most terms, then mediation could be a good option. Most couples who choose mediation for divorce save money over the traditional route because there is only one family lawyer to pay and the divorce proceedings are generally faster. Here at John R. Foley, P.C., we offer mediation. And Mr. Foley, the founder and principal of our law firm, is committed to avoiding emotionally and financially debilitating litigation whenever possible. He also provides pro bono legal services on referral from religious leaders in the area.
Avoid Big Purchases
Leading up to a divorce, our family lawyers recommend being conservative with spending and saving money. Joint finances can be a murky area and the division can be subject to various state laws. You should treat all debts, assets, and income as joint (as if it is a single pot of money between you and your spouse). If you empty your accounts or even just spend more than usual in the weeks and months preceding your divorce, the consequences could be less than desirable. You should instead spend the same amount of money as usual (excluding the expenses of a family lawyer, etc.) and ask your spouse to do the same.
Some people think they can, for example, use their money to buy a boat, RV, or another large expense. When you are married, though, it is considered joint finances and that boat or RV could be subject to division upon divorce.
Evaluate Social Security
Social security can often be overlooked during divorce proceedings, but it is an important financial aspect to consider when you talk with your family lawyer (especially if you are an older client approaching retirement). If you have been married to your spouse for at least 10 years, then you may be able to get up to 50% of their social security benefits once they reach the age of retirement. Be sure to discuss this possibility with your family lawyer as this could be another financial asset to consider during your divorce case. When working through the financial considerations of your upcoming separation, it is important to work with your divorce attorney for your future, post-retirement well-being and not just your immediate financial well-being after your divorce.
Gather Your Financial Documents
Financial records show the financial history and health of your marriage and are a necessary part of meeting with your family lawyer. Gathering all these documents, however, can be time-consuming and difficult — especially if one partner generally handles the finances. Our family lawyers recommend locating these documents as early as possible and perhaps even taking them to your initial meeting with a family lawyer.
Start with the following documents (and ask your divorce attorney if you should find others):
- Checking and savings account statements
- Credit card statements
- Retirement account statements
- Investment account statements
- Loan statements (mortgage, auto, personal, etc.)
- Recent pay stubs
- Assets and debts brought into marriage
- Assets and debts acquired since marriage
- Income tax returns
By having all these documents when you first meet with a family lawyer, you can speed up the process immensely. Be sure to make copies, though, and don’t take your only versions of the documents.
It may also be a wise decision to gather this documentation before filing for divorce if you expect resistance from your partner. If it is not an amicable divorce and one partner controls much of the finances, then gathering all the necessary documentation may be more difficult. If your spouse is making it more difficult, then be sure to speak with your family lawyer about potential court-ordered options.
Know Your Assets
When talking about divorce, not every dollar is created equal. What do we mean? Well, $200,000 toward a mortgage is certainly significant, but it will not make you money or change your future like $200,000 in a retirement fund would. When helping you through the divorce process, a family lawyer should recognize this and fight for assets, finances, and property accordingly. It is important for you to know all of your assets, not just the immediately recognizable ones like a checking or savings account. Retirement, debts, mortgages, assets, property, and more should all be considered.
Know Your Money
Our family lawyers often notice that one spouse may primarily handle the bills, expenses, and payments. While this may work fine in a marriage, it certainly does not do anyone any favors during the divorce process. If you are not aware of what expenses you currently have, what your debts look like, or what your future expenses may be, then you may not go into the divorce process with the full knowledge you should have. By gathering documentation and tracking expenses — both of which are suggestions from our family lawyers in this blog — you can overcome this.
Reduce Your Retirement Contribution
Every dollar you put away is subject to division during the divorce process. Any divorce lawyer out there will recognize the importance of a retirement contribution with each paycheck, but many will acknowledge that it may be prudent to reduce it when you have an impending divorce. By reducing your retirement contribution in the event of a divorce, you can turn that money into a usable asset that can benefit you — rather than yet more money to divide between you and your spouse.
Finally, our family lawyers recommend tracking your expenses and carefully planning for future expenses. This goes along with knowing your money.
If you have children and will be seeking sole or joint custody, then you should know how much you spend on your children every month. If you will be seeking alimony (spousal support) with your family lawyer, then you should know what your monthly expenses look like.
Many families operate off of a budget each month. If you do, then great! You can share months and years of expenses with your divorce attorney. If not, then that’s OK, too. You can start now (and estimate spending from past years with the help of bank and credit card statements). Tracking expenses should include the following information:
- Home maintenance
- Household bills
- Anything you spend money on
Do not forget to also include expenses that would not be considered monthly — trips, vacations, college tuition, after-school activities, etc. — and replacing big-ticket items like refrigerators, washing machines, etc.
No matter the outcome of your divorce, there will undeniably be a change in your financial situation. By tracking all of these expenses and working with your family lawyer to become familiar with them, you will be able to plan for the future and come up with a reliable post-divorce budget.
Meet With a Family Lawyer in Dearborn Today
Your upcoming divorce will require many changes in many different ways. By following the tips in this blog from our family lawyers, you can hopefully reduce speed bumps along the way and assuage your current financial concerns. Here at John R. Foley, P.C., our family lawyers and divorce attorneys have the compassion, experience, and dedication you need in someone who is representing you. It is recommended you meet with several divorce lawyers to find the one that is best for you, and we at John R. Foley, P.C. would be glad to meet and discuss your divorce and financial situation. Contact us today to meet with a family lawyer in Dearborn.