One of the most stressful aspects of divorce involves the financial uncertainty of the process. What property will I receive? Will I receive any maintenance? Will I have enough funds to maintain my lifestyle? Will I still have my retirement funds?
Anyone approaching divorce can reduce financial uncertainty in several ways.
First, consider a prenuptial agreement before marriage or a postnuptial agreement after marriage. A prenup or postnup allows spouses to decide for themselves how to divide their assets, how to address spousal support, and a variety of other divorce-related matters. As long as the agreement is made with full disclosure and access to counsel, and is voluntary, the terms of the agreement will be upheld by the court in the event of a divorce. In this way, a spouse that has an inheritance or other separate property to protect can do so, just as a spouse who has concerns about spousal support may put those terms in writing as well.
Second, before considering divorce, be sure you know your real financial status. Retrieve copies of all bank accounts, retirement accounts, loans and credit card statements. Do a full credit background check to see if you have your name on credit card balances of which you were unaware.
Third, take some time and draw up a post-divorce budget. Decide what lifestyle you would like and see if you can make it feasible financially – set out your income and anticipated spousal support and see if that balances out with the anticipated spending. If you cannot sustain the level of spending, you know you have to downsize your expectations, at least in the short term. To avoid a sudden financial catastrophe after divorce, be sure you can afford a reasonable lifestyle before agreeing to any property settlement.
If you follow these three steps alone, you will have a much better handle on what to expect in the event of divorce, and therefore you will reduce much of the financial anxiety associated with divorce.
If you have questions about financial stress and divorce, contact us – we can help.