Divorce can create chaos in nearly every aspect of your life. When preparing to get a divorce, it can be easy to overlook some of the ways the divorce is likely to affect you. Our society often talks about how to prepare for divorce emotionally, but preparing for divorce financially is just as important.
Missouri divorce law requires spouses to disclose financial information to one another. This information will be necessary for issues like property division and, if applicable, child support and spousal maintenance. Here are six tips on what you can do to financially prepare for a divorce.
You should seek the assistance of an attorney who knows Missouri family law as soon as you can. A family lawyer can help you understand how to survive a divorce financially, even before either you or your spouse has filed for divorce. Financial advice is part of the wide range of roles a divorce attorney fills when representing a client. Your lawyer can provide you with a divorce financial checklist tailored to your particular needs. If your finances are particularly complex, they can bring in a divorce financial planner to help you prepare.
You will need copies of any documents that show how much money you make, spend, and owe, as well as what assets you own. You will have to disclose financial information to your spouse once the divorce process has begun, but first, you need a complete picture to provide to your attorney.
You should make copies of all bank statements for at least the previous three years, although five years is better. This includes joint bank accounts and accounts that are just in your name.
You need copies of your federal and state tax returns for the past three to five years, along with supporting documents like W-2s and 1099s. If you and your spouse filed jointly, your tax return will have your spouse’s financial information as well.
Three to five years’ worth of credit card statements can help establish your and your spouse’s spending patterns. They can also reveal unusual or excessive expenditures.
You should obtain copies of any credit applications filed in the past year with banks or other lenders. These often contain important information about your finances that might not be apparent from other documents.
You can obtain a credit report for yourself, free of charge, once per year. This will provide information about credit history, and it might show any unusual recent transactions or activity.
If you own real estate and have a mortgage, you should obtain copies of as many mortgage statements as you can. This includes property that you and your spouse own jointly and property held by only one of you.
You will also need documents that provide other information about the property, including deeds that establish ownership, statements from tax assessors, and documents that show liens on the property.
Any portion of a retirement account accrued during a marriage is considered marital property under Missouri law. This means that the court can divide it between the spouses in a divorce. This includes Social Security benefits. Statements showing the balance of any retirement accounts or pensions can help establish how much of it is marital property and how much is separate.
You will need statements for any other financial assets that you own, including brokerage accounts, mutual funds, or cryptocurrencies.
Life insurance coverage may be considered an asset in a divorce. If you have children and provide health insurance coverage for them, that will be a factor in child support determinations. Make copies of any insurance policies that you have, along with recent statements.
Your attorney will want a complete inventory of your major assets. They will also want a thorough accounting of your income and expenses. You will have to provide the court with much of this information, so it is best to start as soon as possible.
Your inventory does not need to include everything you own, but it should include significant assets like real estate, cars, and investment accounts. It should also include valuables like jewelry, collectibles, and other heirlooms.
You should take pictures of valuables and any other property that is important to you. You should not hide any assets, but if you are worried that your divorce will be contentious, you might consider putting valuables and other important items in a safe deposit box.
If your inventory includes both marital and separate property, you should make an inventory that only shows your separate property. You should also gather documents establishing that the property is separate. If you purchased a car before the marriage, for example, your vehicle title will show this.
You cannot withhold or conceal assets from your spouse, but you should begin the process of establishing your own separate finances once you have started to prepare for divorce. This might involve opening a bank account or applying for a credit card in your own name.
If you have a will, living trust, or life insurance policy, who are the named beneficiaries? You might not be able, under the local rules of your jurisdiction, to remove your spouse as a beneficiary while your divorce is pending. Still, you should know what your estate planning documents say, as you might want to change them as soon as you are able.
Mark A. Wortman is a family lawyer in Kansas City whose sole focus is divorce and related family law matters. He can show you how to financially prepare for divorce and answer your questions about your rights and options. Please contact us today online or at (816) 523-6100 to schedule a confidential consultation to discuss your case.