At some point in the process of getting your divorce, you will need to collect and understand your financial information in order to negotiate your divorce agreement. In most marriages, one spouse handles the bulk of the financial management. If you are that person, you will have a good idea of where to find all of the information you need. On the other hand, if your spouse handles the finances, you will need to consider how you will most effectively determine the full state of your finances. Often you will need to start copying documents, with or without your spouse’s knowledge, prior to separation in order to obtain the full picture. Those documents will need to be stored in a safe place, usually outside of your residence. They should be treated as very valuable, as they may become critical to you if your divorce grows contentious.
Divorce involves dividing assets and may involve the determination of spousal maintenance (alimony) or child support or both, these elements based on your income. You may have assets that are quite easy to identify: house, cars, jewelry, retirement account, etc. If you and your spouse work for others on standard compensation plans, your income will be fairly easy to determine as well. Complexity arises if you have had funds invested in less visible assets, such as property, investment accounts, or businesses that you may not have your name on. We have had cases where spouses who travel frequently have put money in bank accounts in countries that provide a degree of privacy that can make the funds hard to track. A more common issue arises in determining the income of self-employed people or commissioned employees.
Aside from knowing your assets and debts as well as your income, you will need to understand your cash flow. That is, you will need to know what it costs to maintain your current standard of living. In most cases, your standard of living will need to decrease somewhat after the divorce, but as you negotiate spousal maintenance and child support, you need to understand the degree to which you will be affected. If a judge becomes involved in these matters, he will likely take into account your current standard of living.
Because finances are so integral to divorce, we have extensive articles dedicated to the topic. For now, recognize that if you have not been active in managing the finances of your family, you need to begin paying attention and learning so that you can be confident that the information on which you base your divorce negotiations is accurate and complete.
