Deciding to file for divorce is a big decision. Unless you’re in danger, you should take time to prepare for the process. Part of this means gathering documentation that will help you as you go through the property division phase.
Having an up-to-date picture of your finances reduces the chance that your spouse will be able to hide anything from you. Your goal is to walk away from the marriage with the best financial backing possible, and knowing the state of this part of the marriage is the first step in doing this.
Basic documents to gather
At a minimum, you need to have proof of all income for the home, bank statements and the most current statement for any financial accounts. Don’t overlook things like retirement, investment and life insurance accounts. You should also know about any high-value assets, including art collections, antiques and similar items.
You also need to know about car loans and mortgages, as well as any other outstanding loans and credit card accounts. These must be handled during the property division process, so knowing exactly what marital debts are outstanding is beneficial. These can often balance out with the assets when it’s difficult to divide those equitably. If one party gets a higher amount of debt, for example, then he or she could get a correspondingly higher share of the assets.
Try to get copies of insurance policies and benefit statements. These can help you to determine whether you’re going to be able to cover the costs of them on your income. You don’t need to try to keep assets that are going to drain you financially, so knowing what you can afford is a priority.
Family-based business warning
Owning a business with your spouse is a good experience for many individuals, but it can cause an issue in divorce if you don’t have an idea about the revenue for the company. Sometimes, divorces are plagued by “sudden income deficit disorder,” or SIDS. This occurs when the spouse who handles the finances for the business alters the financial records to make it look like the company isn’t as profitable as it really is.
If you’re in the midst of a high-asset divorce or one that includes a family business, you might consider adding a forensic accountant to your team. This individual can review records in an attempt to spot anything amiss that could signal your ex is trying to hide assets from you in an effort to get a better settlement in the split.