The basic information your lawyer will try to get from you is pretty simple: state of residence, length of marriage, gross salary, and the like. But to truly know your situation and your needs, it is important to dig a little deeper and ask some more important financial questions as you contemplate divorce. Here are 10 questions to ask yourself as you begin to move into the divorce process.
10 Financial Questions to Ask Yourself as You Contemplate Divorce
1. What assets do you own?
This is a basic question that should be top of mind. You can likely come up with a list of bank accounts and real estate off the top of your head, but —
What retirement assets do you and your spouse own? Stock options? Art, jewelry, or antique collections? Time shares? Business interests? A thorough inventory of marital assets goes far beyond liquid cash.
2. What do you owe?
Along with knowing what you have, it is important to know what you don’t have! This includes all credit card debt and outstanding loans. Be specific. Do you owe more on your house than it’s currently worth? Do you still have student loans outstanding? Credit card debt?
3. Could your spouse be hiding assets?
It may sound unlikely, but assets have a way of disappearing after divorce proceedings begin. For example, a spouse may transfer assets to a third party or create false debt in order to skew their financial picture and try to avoid paying a large settlement or alimony. If you suspect that your spouse is hiding something, let your CDFA know- and begin to locate all possible financial documents to find traces of elusive assets.
4. What is most important to you?
A CDFA advocate, who represents just you, will certainly need to know what you find most important. For example, do you wish to remain in the marital home? Knowing that will help you structure different settlements and future predictions.
5. What are you willing to give up?
As you contemplate divorce, understand that settlements rarely work out with everyone completely happy — so it is good to prepare a for a potentially harsh reality. After all, it is often far more expensive to continue fighting your ex over a particular asset than it may be to just let it go.
6. How do you expect your custody arrangement to be structured?
Assuming that you have children, it is important to know who they will be spending the most time with. Factoring in child support payments can affect the way a financial picture comes together. Be sure to check your state’s child support guidelines so you can take realistic numbers into account.
7. How would you describe your financial situation?
More important than the specific content of your answer is the general feel of your description. Does this question propel you into insecurity? Are you assuming that your lifestyle will continue unchanged? Are you assuming (perhaps incorrectly) that you will receive spousal support? This is a really good time to consider some supportive therapy, as emotional-financial issues surface and may distract you from a logical, reasonable solution.
8. Do you expect to pay or receive alimony?
Though fewer divorce settlements include long alimony payments, many people still assume that it will be part of their own settlement. Getting accurate information is very useful in helping your team create models for your financial future.
9. Where are you in the divorce process?
For better or worse, most people will seek out a family lawyer first in their divorce process. You may not think to bring in a financial professional until further into the process. How far have you gotten in gathering and cataloging information for your financial affidavit? Do you even know what a financial affidavit is? Taking the time to understand this with help your team to tailor our communication, advice, and instructions to your specific needs.
10. What questions can I answer for you?
This might be the best place to start. Divorce is a confusing, emotional, overwhelming experience, and most people only do it once. Many clients simply don’t know what to expect and a little Q&A with an expert can go a long way toward making you feel more in control of the process. Have some patience and compassion for yourself — and I’ll answer your financial questions as thoroughly as possible…without giving legal advice. I’m here for the extra support you need.