5 Financial Tips For Preparing For A Divorce

Feb 18, 2022

Financial Tips for Divorce

Have a family law concern or need representation? Reach out to Raul Sandoval, Jr. and his team, Austin's trusted experts in divorce, prenuptial agreements, child custody, and family law.

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If there’s one thing everybody knows about divorces, it’s that they can cost a lot of money—between legal fees, court fees, and the apportionment of assets, the process of separating from a partner entails real financial changes in your life. Here are some financial planning tips and advice to get you started on your divorce preparations in Austin, Texas.Taking time to prepare your finances can help you better understand your financial position before the divorce process begins. Reviewing your income, expenses, assets, and debts can help you plan for potential changes after separation. Having your financial information organized can also make it easier to discuss important financial matters during the divorce.

Find Your Financial Records

Be a smart planner and gather your financial records—tax returns, bank statements, employment information, etc—which tell the story of your marriages’ financial health. It’s important to have this information ready going into a Texas divorce case so that you have a good sense of assets and liabilities—i.e money, property, or debts acquired during the marriage. Getting this information and planning accordingly can take a long time, so start early.

Track And Anticipate Expenses

Legal and accounting fees are likely to be a big part of your financial life until the divorce is complete, so start budgeting for them now. You can do that by tracking your current expenses carefully, making sure to save more than you spend, and planning for future expenditures as the Texas divorce case proceeds. This is a time to be as frugal as you can—and you should accept that your standard of living is likely to change, even if you won’t necessarily be starting from scratch.

Create Separate Income Streams

Part of the process of separation is disentangling yourself from your partner, especially if you maintain joint finances. Here is some advice—You can take steps like setting up a new, private PO Box at your post office and opening new checking and saving accounts at different institutions—once you’ve done so, you can update your direct deposit information to ensure that your paycheck isn’t deposited into any joint account. A tip to remember—you’ll have to disclose income to the court regardless of where it’s deposited. What you should not do is draw from the communal accounts—emptying that pot, or even dipping into it more than usual, in the weeks and months before your divorce could be detrimental.

Refrain from Big Financial Decisions

The divorce or custody proceedings will lay out a series of major financial changes, for better or worse. So while you might want to get cracking on adjusting life insurance beneficiaries, wills, retirements and such, these are actually part of the legal proceedings, and making any changes without the court’s blessing might lead to criminal contempt charges. Tread carefully, and ask your lawyer before you make a move.

If Possible…Work Together

One of the most effective ways to protect your finances during divorce is to—where possible—keep your head, and stay civil. If you and your partner can cooperate in disentangling your finances, your divorce will proceed quicker and more smoothly, meaning it will cost less, meaning you’ll both be better off.

When In Doubt, Talk To A Lawyer

Family law lawyers—like those at Sandoval—stand ready to help you through the process of uncoupling your finances from your partner. If you need guidance on how best to do so, and what the court will and won’t permit, call one of our specialists for a consultation. At Sandoval Law Firm we understand the stress of dealing with divorce, child custody and domestic violence. Our firm consists of founding attorney Raul Sandoval Jr. and a dedicated support staff. Mr. Sandoval earned his law degree from Texas Tech University School of Law. Since that time, he has been practicing family law in the Austin area, as well as teaching seminars, classes and other forms of professional development.

Key Takeaways

 
  • Gather financial records such as tax returns, bank statements, employment information, and property records early.
  • Track your expenses and create a realistic budget to prepare for changes in your financial situation.
  • Review your income and accounts carefully when separating your finances from your spouse.
  • Avoid major financial decisions involving assets, retirement accounts, or beneficiaries without appropriate legal guidance.
  • Work cooperatively when possible to help reduce conflict, expenses, and unnecessary financial complications.
 

Frequently Asked Questions

Gather important financial records such as tax returns, bank statements, employment information, property records, and information about debts and other assets.

Creating separate financial accounts may be part of preparing for separation, but it is important to understand your legal obligations and discuss your situation with a family law attorney before making financial changes.

It is generally important to exercise caution before making major financial changes involving assets, retirement accounts, beneficiaries, or other property. Consult your attorney before taking action.

Keeping accurate financial records, tracking expenses, planning for legal costs, avoiding unnecessary financial decisions, and working cooperatively when possible can help you better prepare for the financial aspects of divorce.