Are You Considering Divorce?
The decision to leave a marriage is a deeply personal one, but in the eyes of the law, a divorce is fundamentally a legal contract — and one you will need to prepare for.
There are many things to consider when deciding whether to leave a marriage. What you might not be thinking about is how you will manage the process itself. Like most contracts, a divorce requires a number of documents, including detailed financial statements that are used for negotiation. You will be in a much better position if you know what information you need and take the time to gather it before contacting a lawyer or mediator.
Getting organized for divorce is similar to preparing documents for your accountant. It will be easier if you have been closely involved in your family’s finances. If you haven’t been, don’t worry, you are not alone, and this is a good opportunity to become fully informed about your financial situation.
First, you will be dealing with a lot of paperwork. A good place to start is by 1) purchasing a
3-ring binder or accordion folder to hold all of your papers, and 2) creating a master list of tasks and deadlines.
The Key Documents
The next step is to gather financial information for the two documents that are required for all divorce proceedings: The Monthly Budget and the Statement of Net Worth, also referred to as the “Financial Affidavit.”
►Monthly Budget You need to know exactly how much it costs to maintain your current lifestyle. Unless you are already tracking your spending, it will take some time to figure this out.
You should review at least the last three to six months of your bills and credit card statements. Also, try to estimate future expenses such as moving expenses, college tuition, medical insurance, etc.
This is a good time to start recording your monthly expenses using an Excel spreadsheet. When laid out in this way, it will be easier for you to see where your money is going, and where you could cut back if necessary.
►Statement of Net Worth (aka) the “Financial Affidavit,” this may be the most important document that you submit to the court. It summarizes all of your assets and liabilities, and is used to determine the size of your marital estate. You can find a blank copy of the Financial Affidavit aka Statement of Net Worth form at your state’s government website.
Assets include the equity in your home; checking, savings, and brokerage accounts; retirement funds; and other material possessions. Liabilities include your mortgage, credit card debt and any personal, auto or school loans you may have. You can find a complete list of all accounts in your name by checking your credit report.
While gathering all this information may seem daunting at first, it’s important to remember that the more organized and complete your documents are, the better your chances of a satisfactory outcome, allowing you to move forward confidently in your new life.
One of the best way to help you with this is to hire a Certified Divorce Financial Consultant (CDFA). I’d be happy to help you complete these two documents as well as navigate the entire process. I can be reached at 914-980-0898 or via email: email@example.com