Once you have gathered all of your financial information and have taken steps to protect your finances during the divorce process, you need to prepare for your negotiations by documenting your net worth and preparing a budget for life after divorce. We will deal with net worth first.
To determine your net worth, you add all of your assets together. You do the same for your debts, or liabilities. You subtract your debts from your assets to get your total net worth. After having read through the information above, you should be familiar with your assets. You will likely need to research or perform appraisals to get accurate values for at least some of your possessions. For others, particularly pension plans, you will want help from a CPA or other financial professional. When you have these numbers, or near estimates, make a list and total them. If you would like to use a worksheet as a starting point, just look for one online.
Why do you need to go through this exercise? Clearly, the more informed you are about your finances, the better decisions you will make during negotiations. Also, you may learn that when you put everything together, you have far more—or less—than you imagined. This can influence your strategy in negotiations. If you and your spouse have a total net worth of $25,000 and you each make significant use of lawyers, and possibly a mediator, to help you agree about how to divide your property, the fees you pay could easily outweigh any gains you might achieve beyond your spouse’s initial offer. Alternatively, if you find that the net worth is greater than you thought, you may decide that it is worth more effort, and potentially fees, to ensure you receive a fair amount.
