The Smart Divorce® Weblog

Developing realistic expectations when it comes

to finances is of utmost importance

One of the many concerns that my client’s voice most often during a consultation is their lack of knowledge and organization skills when it comes to their finances.

Getting your finances in order with the objective of cutting down on your legal expenses should be a priority

Lawyers don’t always agree on every issue. But, when it comes to finances, all lawyers agree on how important it is for their clients to be as financially aware as possible. It’s the best way to learn your rights and obligations and to determine realistic financial expectations early in the divorce process. And the more you can manage and organize your information for your lawyer, the more you can help reduce your lawyer’s billable hours!

Here are some ideas as to learn about your finances if you were not involved with finances during your marriage:

• Get more involved in your finances. Know the basics – pay the bills and file the statements. Learn how your daily and monthly expenses are managed.
• Understand where your money is coming from and understand how to budget.
• Take part in managing or setting up any investments, know what your outstanding mortgage is and the terms and so on.
• Gain awareness of your outstanding assets and liabilities.

Many lawyers suggest that if someone is contemplating a divorce or separating, one of the first things you should do is accumulate the financial information.

Once the divorce process is under way, your lawyer will need ready access to all relevant financial documents. Start by locating and gathering together the following records pertaining to both you and your spouse:

 - social security numbers

 - income tax returns for the past three years

 - retirement savings plans statements for the past three years

 - bank account statements

 - insurance policies (life; automobile; house; other)

 - stock certificates

 - credit card bills

 - employment payment stubs

 - brokerage statements

 - pension statements

 - health insurance and work-related benefits

 - real estate records

 - receipts and monthly statements documenting household expenses and everyday expenses (groceries, gas, heat, water, personal grooming, transportation, gifts, clothing, laundry and cleaning supplies, entertainment, miscellaneous expenses, and so forth)

 - list of all assets and liabilities

 - date of separation (the date of separation, or “valuation date,” is the date that is used to determine the value of particular assets–the matrimonial home, bank statements, investments, and so forth)

Photocopy everything, and store your set in a separate folder from the original records. Don’t just keep the originals for your own personal use; the other side is entitled to these documents, too. If you do withhold these records from the other side, sooner or later you are going to be asked to provide them, which will cost you even more in legal fees.

Keeping this information organized, being well informed and involved will give you a feeling of control, reduce the stress, and help to develop realistic financial objectives.