Divorce is a stressful time.
Having to arrange a financial settlement after your divorce can add to that.
When dealing with such a significant financial decision, you’ll need to make sure you know all the ins and outs of what you’re going ahead with.
What You Need to Know About Financial Settlements After Divorce
A financial settlement details who will get what. It is the term used by courts to explain the financial proceedings in a divorce. In many countries, when you get divorced, you’ll have a claim to your former partner’s finances. But this also means that they have a claim to yours. And this can lead to some unpleasantries.
This rule can involve long and gruelling court battles, which can turn even the most amicable relationships sour. But if you agree to a financial settlement, you’ll typically be able to avoid the worst of it. If you and your ex spouse can agree on what to do with your finances, you’ll probably be able to avoid that. And that can be key to maintaining a civil relationship.
Preparation is Key
Once you know divorce is likely, it’s time to start preparing your finances. You should start finding out whether your assets – including any cars you bought in your name only, your pension and even your pay check – belong to you or if your former spouse has a stake in them too. Some U.S. states have a community property law, meaning your spouse will own half of everything you acquired during your marriage.
Start compiling a list of your assets and financial information, such as tax returns, loan agreements and statements, and saving and investment statements. This will make it easier to access the necessary information when you need it. It will also speed up the process of coming to a financial settlement, which can help keep the divorce process moving along smoothly.
You should also make sure you know what everything is worth now as well as what it might be worth in the future. You will have to decide what to do with any joint bank accounts or debts shared with your partner. You may choose to close them down, keep them open in just one name, or reapply as an individual.
Consider Your Future
If you have children, their needs will come first in the eyes of the law. This could mean the value of your family home may be split unevenly between you and your partner, depending on who has primary care of your children.
When there are no dependent children to consider, the individual needs of you and your partner are the main consideration. You’ll have to consider how much you’ll need to live on.
This is when drawing up a comprehensive budget is important. If you haven’t been living according to a budget during your marriage, now is the time to start doing so. After all, you’ll be managing on less than you had before. Think about things like individual health insurance and savings for the future.
Get Help When You Need It
If you and your ex can’t agree on a fair financial settlement, you may need to bring in external help. Mediators and lawyers can help the two of you think about what you should be prioritizing and how you can both get where you want to be. These professionals deal with compromise on a daily basis, making them best placed to achieve the same for you.
In order for couples to come to fair financial settlements after divorce, they need to be honest and upfront about their finances. A skilled divorce lawyer will be able to help if you think your partner isn’t being entirely truthful about their financial state.
Leave the investigating to them and focus on yourself. Divorce – and particularly the financial side – can be exceptionally difficult, so it’s important to take the time to ensure you’re managing as best you can. Calling on the right professional help can provide a real source of support during a tough time.