When divorce is on the horizon, many California spouses feel overwhelmed by the sheer number of changes that are imminent. It can be difficult to know where to start, and some spouses simply shut down and fail to address important issues in a timely manner. When it comes to finances, however, taking a well-informed and proactive approach can mean the difference between future financial stability or failure following a divorce process.
The first step that all spouses should take, either with the other party or independently, is to make a full accounting of the current state of the family’s finances. This includes listing all income, assets and debts. By having all of the information available, savvy decisions can be made to protect the financial future of both parties.
It is also important to talk with each other about future expenses, such as the cost of a college education for any shared children. This type of agreement can be written into the final divorce paperwork, which can help both parties to plan for their child’s education with a clear idea of how that expense will be distributed. This type of discussion can also be helpful if the couple shares a business.
Other financial matters deserve attention as well, such as insurance issues, tax consequences and estate planning. While divorce can be an emotional time and can often lead to contention, working together to determine how to handle finances can save couples in litigation costs down the line. When a California marriage is dissolved, finances are going to be divided. How that occurs and how much is left to divvy up will largely depend on the ability of both parties to work together to reach the end goal of dividing one household into two.
Source: al.com, “10 tips for divorcing couples,” Stewart Welch, Oct. 31, 2012