Ask an Advisor: I haven’t been happy in my marriage since before COVID. I’m mentally prepared to file for divorce, but unsure how to prepare myself financially. What should I do next?

Ask an Advisor: I haven’t been happy in my marriage since before COVID. I’m mentally prepared to file for divorce, but unsure how to prepare myself financially. What should I do next? – Kate

Divorce can be a tough and emotional experience, and it’s important to be prepared financially before taking any steps. Here are some steps you can take to prepare yourself financially for a divorce.

1. Gather financial documents: Collect all financial documents, such as bank statements, investment records, credit card statements, and tax returns. Make copies of these documents and keep them in a safe place.

2. Evaluate your assets and debts: Take inventory of all your assets and debts, including bank accounts, investments, real estate, and personal property. Determine which assets are separate property and which are marital property. You’ll also want to do this for your spouse’s assets as well. This

3. Create a budget: Determine your monthly expenses and create a budget. This will help you understand your financial needs now and how much money you will need to support yourself after the divorce.

4. Consult with a CDFA: A Certified Divorce Financial Analyst (CDFA) can help you understand the financial implications of the divorce and help you create a plan for your financial future. They can also help you understand how to divide assets and debts. A CDFA will also work directly with your attorney, if necessary, and through a process called Collaborative Divorce, should you choose to go that route. Though a CDFA won’t provide legal advice, they can provide the information your attorney needs to help you make better settlement decisions and support you as an expert witness in court, should it go that far.

5. Consider hiring an attorney: As opposed to a CDFA, a divorce attorney can help you understand your legal rights and protect your interests. They can also help you negotiate a fair settlement with your spouse. Think of them as an integral part of “Team You” along with a CDFA.

6. Open new accounts: If you don’t already have your own accounts, open new bank accounts, and credit cards in your name only. This will help you establish your own credit history and protect your finances. That said, please pay special attention to Tip #7.

7. Don’t make any major financial decisions: Until the divorce is finalized, it’s best to avoid making any major financial decisions, such as buying property or making large investments. This can complicate the divorce process and may not be in your best interest.

8. Protect your credit: Monitor your credit report regularly and freeze your credit if necessary. This can help prevent your spouse from opening accounts in your name or damaging your credit.

9. Consider the tax implications: Divorce can have tax implications, so it’s important to understand how the divorce will affect your taxes. Consult with a tax professional to determine the best strategy for your situation.

10. Take care of yourself: Divorce can be stressful and emotional, so it’s important to take care of yourself during this time. Seek support from family and friends, and consider working with a therapist or support group.

Remember, divorce is a complex process and it’s important to be prepared financially. By taking these steps, you can protect your financial future and move forward with confidence.

Jamie Lima is a financial advisor and Certified Divorce Financial Analyst who helps mid-career professionals better manage, maximize, and grow their wealth. Based in Ramona, California, Jamie serves clients nearby and nationwide.

Get to know Jamie by visiting his profile page on Wealthtender or visiting his website at woodsonwm.com.

Please note that Wealthtender earns a nominal monthly fee from Jamie in exchange for providing access to the benefits described here, subject to these terms. This compensation creates a natural conflict of interest when we favor promotion of Jamie and other financial advisors in the Wealthtender community over advisors not featured on our platform. Wealthtender is not a client of these advisors or firms.

This article is intended for informational purposes only, and should not be considered financial advice. You should consult a financial professional before making any major financial decisions.

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