Every couple that divorces is unique and will have different issues that need to be addressed. In many cases the division of assets is a complex process. In virtually all situations the best thing that all parties involved can do is to take charge of their financial health. In the next couple of posts we will cover ways in which people who are divorcing can do this.
The first step should be taken before financial issues related to the divorce even become an issue. It is a good idea to separate the financial accounts that are used every day. In addition to having a checking account, each spouse should also have his or her own credit card. When getting these accounts into place, it is also a good idea to pull together any other relevant financial documents such as tax returns, credit cards and mortgage statements, retirement and investment account statements and payroll statements.
A good way to go about this is to take another look at your retire plan. If you previously let your spouse handle this task, it may be time to determine whether a different approach is in order. Your income and risk tolerance are relevant in this case.
When making decisions about dividing assets it is also important to be aware of tax consequences. Understanding what, if anything, is owed to the Internal Revenue Service, and addressing that debt, is vital.
While there is an underlying assumption that both parties to a divorce will share information regarding their income, unfortunately, this is not always the case. A forensic accountant can be of assistance in situations where one spouse believes the other one is hiding assets.
In our next post we will provide additional ways in which people who are divorcing can take charge of their financial situation.