The process of divorce, while often unpleasant and draining, is sometimes the best solution to a difficult situation. On top of learning to deal with strenuous emotions in adversarial settings, California residents should also consider their finances when going through the divorce process.
Property division, including the division of marital property, non-marital property and retirement asserts, can be complex. A recent article advised there are five things couples should consider when going through a divorce.
The article, based off advice given by a California divorce financial planning expert, indicates that an individual obtaining a divorce should first evaluate their assets. While obvious assets such as the home or cars may be easily identifiable, other, smaller property and assets will also be considered in a divorce. Some easily forgotten assets include pension accounts, savings, stock and compensation for personal injury claims. It is recommended individuals make a detailed list of all assets they own.
The second step is to evaluate debt. It is important for a divorcing individual to know where they stand when it comes to paying off debt. Third, it is important to run a credit check. Sometimes, people are surprised by a second mortgage on the home or a credit card in their name.
Fourth, individuals should track their monthly expenditures. It is crucial to be aware of one’s budget in order to adequately predict what is needed to survive financially post-divorce. It is sometimes necessary that a second mortgage be taken out to cover adjustments. But, this is best done prior to divorce, before assets are split.
Last, California residents are well advised to identify all their income sources. While one obvious income source is compensation from work, other sources may include stock payouts or income from trusts. It is helpful to know where one’s money comes in case alimony or child support payments come up. Having a particular source in mind to make alimony or support payments can make the process smoother.
Ultimately, when one is well aware of assets, debt, credit history and income sources, solutions to sometimes complicated problems may be more readily available. Further, an experienced advocate will take all of this information and assist in making a creative solution to difficult issues.
Source: Fox News, “Five things to know about your finances before divorce,” Cindy Vandegus, May 4, 2012.