How to Financially Prepare for Divorce
Money matters are front and center in any Georgia divorce. The Peach State follows equitable distribution laws, meaning that a divorcing couple must split shared property and financial assets in a manner fair to each spouse. If you’re entering divorce proceedings, you should consider your financial position and prepare for the best chance at a satisfactory outcome. Following these tips will give you a good start.
Tally Your Assets and Collect Supporting Documentation
The cash you have on hand forms a small fraction of your total financial status. Begin by conducting a roll call of all assets, debts, and financial products with your name on them, whether separate or shared. Consider the following:
- Income from your job or business
- Savings and checking accounts
- Retirement accounts
- Health savings accounts
- College savings 529 plans
- Credit cards
- Car loans
- Personal loans for other large purchases
- Retirement accounts
While you take inventory of your finances, you should gather any relevant documentation, including:
- Account statements – Gather savings, checking, retirement, and investment account statements you’ve received over the last year. With many banks and brokerages having online portals, you can access and print them out quickly if you do not have paper copies.
- Pay stubs – Retrieve the last year of paystubs from your file cabinet.
- Loan statements – Gather a year’s worth of statements for any loans you hold or share, including mortgages and car loans.
- Credit card statements – Have the past year of statements ready for any credit card in your name. You should know what was charged and how much you paid the credit card company each month.
- Your credit report – You should access your most updated credit history and rating. If you see erroneous charges or suspicious activity, resolve it as soon as possible.
- Tax returns – Have at least three years of your federal and state tax returns ready.
Once you have a complete “picture” of your finances, you can more accurately predict what they’ll be like after the divorce is finalized.
Save, Don’t Spend
Equitable distribution in Georgia is not necessarily a 50-50 split. If you make more money or are in a better financial position than your spouse, you may have additional liability to pay alimony or remaining marital debts. Before a divorce, take the time to evaluate your expenses and make any necessary budget cuts. Lifestyle inflation before a divorce can impact your financial health after a divorce.
Know Who Owns What
To best protect your property, you should know who owns which assets. Make two lists: one for marital property and the other for your separate property acquired before the marriage. List each item or asset, how much it costs or is worth, and when you remember purchasing it.
You may need to make more than two lists under certain circumstances. For example, if you and your spouse own a business together, you must consider the business’s holdings. Depending on when you started the company and how much you were involved in its operations, those holdings may be marital or separate property.
Follow Your Lawyer’s Advice on Separate Accounts
If you used joint bank accounts before the divorce, you might have considered opening a new, separate bank account to protect your income. However, you should keep using your existing accounts for now.
One reason for this is that a separate account wouldn’t have much protective benefit while you’re still married. Even if you were to reroute direct deposits into the new account, the money would still be considered marital property, and it would still be subject to equitable distribution.
Your lawyer will advise you when opening a separate account is advisable. However, until the conclusion of the divorce, you should hold off on making any changes to where your money goes.
Don’t Hide Anything
An uncontested or mediated divorce is the ideal resolution for a couple ending their marriage. To reach an amicable resolution, the spouses need to practice transparency and some degree of trust. Hiding assets is the fastest way to undermine that trust with both your spouse and the court.
Your lawyer’s goal is to help you protect your assets and financial situation. They will not advise you to covertly conceal money or property toward that aim.
Speak With an Atlanta, GA, Divorce Lawyer
If you’re facing a divorce, the Atlanta divorce lawyers of Kessler & Solomiany, LLC can help you evaluate your legal options. Since 1991, we’ve offered honest advice and an empathetic ear to our clients, protecting their financial future and role in their kids’ lives. For a confidential consultation, contact us today at (404) 688-8810.