Build Your Financial File Before There Is a Crisis
For an accomplished woman considering divorce, one of the most important decisions may occur before a petition is ever filed: becoming informed about your own financial life.
A successful career does not necessarily mean you know every detail of the family finances. One spouse may handle the taxes. Another may communicate with the financial advisor. Business records may be maintained by an accountant. Investment statements may arrive electronically. Retirement benefits, equity compensation, insurance policies, and loan documents may be spread among several institutions.
Then a marriage begins to unravel, and suddenly information that was never urgent becomes critically important.
That is why pre-divorce financial planning should begin with a simple goal:
Build your financial file before there is a crisis.
Know What Exists
Before filing, begin identifying and lawfully gathering financial information available to you.
Depending upon your circumstances, that may include:
- Personal and business tax returns;
- W-2s, 1099s, K-1s, and recent pay statements;
- Bank and investment statements;
- Retirement and pension statements;
- Mortgage and loan documents;
- Credit-card statements;
- Life-insurance information;
- Employment and compensation agreements;
- Bonus, stock-option, restricted-stock, and deferred-compensation records;
- Business ownership and financial records;
- Real-estate documents;
- Trust documents; and
- Records concerning inheritances, significant gifts, or assets owned before marriage.
The purpose is not to empty filing cabinets or secretly access accounts you are not authorized to access.
The purpose is to know what exists, where it is located, and what questions need to be answered.
Understand How Money Comes Into the Household
For many professional women, compensation involves much more than salary.
You may receive bonuses, commissions, partnership distributions, business income, equity awards, deferred compensation, investment income, or other benefits.
Your spouse’s compensation may be equally complicated.
Those distinctions can matter. Florida’s child-support statute, for example, recognizes numerous forms of income beyond traditional wages, including bonuses, commissions, business income, retirement payments, interest, dividends, rental income, and income from trusts or estates.
Before the divorce process begins, understand not simply what each spouse’s paycheck says, but how the household actually receives income.
Know What the Household Costs
Now is also the time to understand your expenses.
What does it actually cost each month to maintain the home?
What are you paying for:
- Mortgage or rent;
- Property taxes;
- Insurance;
- Utilities;
- Vehicles;
- Childcare;
- Tuition;
- Children’s activities;
- Health care;
- Travel;
- Household help;
- Debt;
- Professional expenses; and
- Retirement savings?
Divorce ordinarily transforms one household into two.
Knowing what your current life costs is the beginning of understanding what financial independence may require afterward.
Do Not Make Unusual Financial Moves Without Advice
Pre-divorce planning means preserving information and understanding your position. It does not mean moving money, hiding property, changing account ownership, making unusual withdrawals, or attempting to place assets beyond your spouse’s reach.
Florida equitable-distribution law specifically permits courts to consider the intentional dissipation, waste, depletion, or destruction of marital assets after filing or within two years before filing.
Before making a significant financial change because divorce is being considered, speak with family-law counsel.
Start With Our Pre-Divorce Financial Planning Checklist
Knowing that you need to prepare and knowing where to begin are very different things.
Perez-Calhoun Law Firm has developed a Pre-Divorce Financial Planning Checklist to help you begin identifying the records, accounts, property, liabilities, business interests, compensation, insurance, and other financial information that may become important if you decide to proceed with a dissolution of marriage.
Use the checklist to begin building your financial file while you have the opportunity to do so carefully and thoughtfully.
Allow Perez-Calhoun Law Firm to Help You Plan Before You File
Considering divorce does not mean you have to file tomorrow.
It does mean that important decisions should be made with reliable information.
Allow Perez-Calhoun Law Firm to help you with your pre-divorce planning before a financial crisis—or litigation deadlines—begins setting the timetable for you.
Contact Perez-Calhoun Law Firm to schedule a confidential consultation regarding your individual circumstances.
Know What You Own: Marital, Nonmarital, Premarital, and Inherited Property
This article is provided for general informational purposes concerning Florida family law and does not constitute legal advice. Every financial and marital situation is different. Consult qualified Florida family-law counsel regarding your individual circumstances.
