In addition to divorce being a complicated process, it is also financially challenging. While no two divorces are the same, there are some universal steps you can take to Be prepared
How Much Does Divorce Cost?
There is a very broad cost range for divorce because of all the different factors involved in each individual case. In the State of Colorado, Attorneys take a Retainer, which can range anywhere from a monthly payment to $7,000 or more. This is where the expense begins for a Divorce The final total will depend upon the complexities of the estate, assets, debts, etc. An average amount for a Retainer is typically between $3 and $5,000.
The most common costs associated with a divorce are:
- Attorney Fees and court expenses
- Court mandated parenting classes for those divorces involving children
- Mortgage refinancing and other real estate costs for property you own
- Parenting Experts when needed
- Forensic Accountants when needed
It is best to begin to prepare your financial position early so that you can set out a suitable strategy for the process of divorce and plan for your post divorce life. For example,
Get Professional Advice
Securing Professional advice and legal counsel is paramount for a successful outcome. Chances are your friends and family members will offer well-meaning financial advice to you during your divorce, but you should get professional advice before making any major decisions. This is especially true if your spouse has been the one managing the household finances until now. Your divorce lawyer can help you here, and will be able to recommend a financial planner/forensic accountant who has experience with people who are in the process of divorce.
Keep in mind that an experienced financial planner will be an asset to your regardless of whether or not you have assets or debts. We must all plan for our futures. Even if you don’t have a assets, it will be worth it to speak to a financial adviser if you have a lot of debt.
Take a Full Look at Your Finances
Your financial records are the written story of the financial health of your marriage. Gathering documentation of all assets, debts and income can take some time, so start as soon as you can. Keep in mind that for accounts you share with your spouse, the financial institution or advisers involved with them are not obligated to keep your requests confidential.
At the very least, you should gather:
- All recent bank account statements
- Current retirement account statements
- All recent Investment account statements
- Current balances for all outstanding loans, including personal, auto and home loans
- All recent Credit card statements
- 3 months of pay-stubs
- Past three years of income tax returns, personal and business
If there are other financial records, gather those, too. Your attorney will be able to determine what is relevant and what is not, so it’s best to provide your attorney with all that you have, even if you are not sure about some of the documentation or what it means.
Know What You Need and What You Don’t
Deciding on how to divide the marital property requires some insight from your attorney. Very often, the value of your home will be appraised so that both parties will have an idea of what the equity is, if any. It’s always a good idea to spend some time thinking about keeping the marital home, or selling it. Sometimes it happens that our emotions take over and we make decisions that are not in our best financial interests. Start to think about what it is that you really want and can afford to maintain once the divorce is final.
These are hard decisions to make, but you have to keep the reality of your post-divorce finances in mind when you consider what you want your divorce attorney to help you fight for.
Try to Work With Your Spouse
When you and your spouse are able to cooperate with each other to separate the finances and divide property and create fair parenting time,the overall outcome will be better. Try to Put your emotions aside, as much as you can, so you and your spouse can come to the best agreements possible. You must be honest with your attorney about all financial matters so that your attorney can provide you with sound advice.
Keep in mind that if you feel your spouse may be hiding assets, you need to speak to your attorney about those concerns immediately. Your attorney will then recommend that a forensic accountant be appointed to properly investigate any possible hidden assets.
The long-term impact of all financial decisions you make during the divorce process will, undoubtedly, determine your financial footing for your post-divorce life. For this reason, the most important step you can take when getting ready for a divorce is to hire an experienced attorney. Just remember, you can always make more money, but you cannot get time back. Make the best decision for yourself now and for your future.