How to financially prepare for your divorce

Many people who are contemplating divorce in the Rogersville area believe that they do not need to change their financial habits. They may think that because they live in an equitable distribution state, they will receive enough marital property and assets to support their current lifestyle.

Divorces do not always pan out that way, however. When it comes time to divide assets, marital property and award additional funds in a divorce, judges consider the needs, means and contributions of both parties. They also base their decisions on the best interests of any children. Anyone who is thinking about divorcing their spouse should consider the following suggestions on how to prepare their finances first to avoid surprises. 

Get rid of joint accounts and debts 

Joint accounts and debts will hold you back once you settle your divorce. Before you file, you should close any joint accounts you have with your spouse and open your own. You should also pay down any debts that are in both of your names so you do not run into complications and hardship if your soon-to-be spouse misses payments. 

Budget for the new lifestyle 

You may not know exactly what you are going to receive in your divorce settlement, but you should create a budget based on what you do know. Document every source of income and how you will spend it. Plan your finances so you know what you need to do to meet them. Do not overlook healthcare, college or savings costs. For example, if you were the lower earning spouse, you may need to get another job or a better-paying position to maintain a similar lifestyle. 

Understand your new tax situation 

Once your divorce becomes final, your tax filing status changes. Any alimony and child support awards you receive can have an impact on your tax situation as well. You may want to work with a financial advisor so you have a clear understanding of how your divorce settlement can affect your finances. 

It is important for you to anticipate the different ways divorce can change your financial picture. By learning the different outcomes, you can get your finances in order to minimize its impact on your lifestyle.

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