People going through divorce at the outset tend to focus on the emotional aspect – naturally, as a relationship and a family is coming apart. Financially, people also tend to think very short term, in the moment, cover my bills forms of thinking. But as you get into the actual process of divorce, of transitioning from a unit in one household to two separate households with two different budgets, financial considerations post-divorce must become paramount.
First, take inventory of the marital estate. What comprises all of the marital property? Do you know where all these assets are? Do you have financial statements, copies of deeds or mortgages? What about marital debt? Do you know all of your credit cards and balances? Run a credit check to be sure. What is your separate property or that of your spouse? How do you anticipate dividing these assets – which are most important to you and why, and can you afford to maintain these assets?
Second, get a good grasp of income flow. How much do you earn, or if you have not been working, what can you reasonably expect to earn now and in the future with full use of your skills and education? If you cannot make ends meet, what will you need in terms of spousal support? If you can make ends meet, but your spouse cannot, what do you think you can afford in spousal support? If you have children, get a good approximation of what your child support would be under the Missouri guidelines. How does this help close any gap in ability to pay for expenses?
Third, write out a budget of necessary expenses. You should work up one to get through the divorce, when you cannot really dispose of any assets, and one for after divorce, when you need to make hard choices about your post-divorce lifestyle. Knowing your absolute minimum to get by is critically important in evaluating what you will need to ask for in property and support.
Finally, think of important long term issues – secure retirement, health insurance, life insurance, Social Security and the like. You do not want to leave the divorce without addressing these needs.
If you have questions about financial needs and divorce, contact us – we can help.