Whether a reader of this California family law blog earns a large income or a modest one, he will want to make smart decisions about his finances before, during and after divorce. Divorce can force a person to divide his wealth with his spouse and, in some cases, pay his ex-partner support for a number of years. While every divorce situation is different and can result in different property division and spousal support outcomes, there are several smart considerations a person can make before he ever signs his divorce paperwork.
First, anyone contemplating divorce can begin finding and copying the important financial documents he has that show how much wealth is vested in his assets. This can be done for items of separate property, as well as dividable marital property. In some cases, spouses will disagree on the valuation of certain items of property during the asset division process and having documentation can help sort out differences of opinion.
Second, individuals who may think divorce is on their horizon can benefit from setting money aside into separate, non-marital accounts. A divorce can take a very long time to work out, from a matter months to several years. Divorces with high net worth issues have lasted more than ten years. Having money in reserve that is only the property of one partner can help a divorcing individual weather the financial storm of ending a marriage.
Third and finally, spouses who plan to separate may choose to proactively separate their credit accounts. These can include credit cards and other lines of credit on which both spouses have drawing rights. Ending shared credit can help protect one spouse from having to pay off the debts incurred by the other.
Whether a divorce is modest or between two people of high incomes, there are many things individuals can do to protect their post-divorce finances. This blog post only touches on a few of the issues divorcing parties may encounter. Individuals who work with divorce attorneys may be able to have their specific divorce questions answered by legal professionals.
Source: Time, "The 3 Most Important Things to Do Before Announcing You Want a Divorce," Farnoosh Torabi, Jan. 13, 2015