One spouse always knows more about family finances.
This is a truth I’ve seen repeated again and again. A marriage is a partnership including dividing the responsibilities of the home. One spouse may have more time, or they may like it so choos to handle the family finances.
They may have education or traits that make them better suited to do the job. Or, maybe they handle the money simply because the other spouse won’t.
The danger of the one financial truth in all divorces.
Why does this matter?
You Know More or You Don’t
Don’t fool yourself. I’ve seen cases when someone thinks they understand the family finances and a few basic questions prove otherwise. If you’re not sure, get advice from someone who can help you figure out how much you know. If you’re the one who knows less, …
You’re at a Disadvantage
Your soon-to-be ex-spouse could use this to obtain more assets and income. Don’t panic or be embarrassed. Recognize you’ll need help understanding your finances and do your best not to let your emotions take over. The person you’ll interact with most is your attorney. That means…
Your Attorney is at a Disadvantage
Your attorney is immediately at a disadvantage if your knowledge is less than your spouse. That’s because they are relying on what’s in your head at first. Recognize there’s a “gap” and…
Have a Process to Fix It
Does your attorney have a solid process for organizing the family finances? Can they take you from where you are to a level playing field with your spouse? There is no bullet-proof checklist. However, there is a general strategy. You must identify, quantify, assign, and distribute assets, liabilities, and income. You may still need to…
Bring in Financial Experts
If your finances include a family business, real estate, investments, stock options, retirement accounts, complex assets, hidden assets, or fraud, you may need assistance. Good financial experts will bring value to your case. Don’t let them wander without a plan. Work with your attorney to identify the objectives so the financial expert can deliver results. Experts could include tax CPAs, insurance agents, financial advisers, business valuation analysts, forensic accountants, and others.
The Bottom Line
Recognize the universal truth that one of you understands the family finances better. If it wasn’t your area, that’s OK. You and your attorney should identify the gaps, put a solid process in place, and bring in experts where necessary.