Three Steps to Prepare Divorce Finances
By definition, divorce is a sea-changing event. Some of the most significant, and potentially contentious, issues in divorce surround financial matters. Taking a proactive stance in regard to divorce finances is crucial. There are three fundamental steps a person should take to prepare financially for divorce.
Divorce Finances: Identify and Separate Non-Marital Assets
Not all property is subject to division in a divorce case. Although marital assets are subject to distribution in a divorce case, non-marital assets or separate property is not.
There are two different property division standards utilized by courts in different states in the United States. The community property standard calls for an equal division of marital property between spouses in a divorce case. The equitable division standard requires that a distribution of marital assets be fair and just under the facts and circumstances of a specific cases. Both standards exclude non-marital assets or separate property from the distribution scheme.
An initially stem to prepare financially for divorce is identifying and segregating separate property. Examples of non-marital assets generally include any property owned by a person prior to the date of the wedding. Other examples include property inherited by one spouse only during a marriage. In certain situations, a give designated for one spouse during a marriage also qualifies as a non-marital asset.
Divorce Finances: Develop Individual Credit History
The second key step to take in advance of seeking a divorce is to make certain a person has an individual credit history. If an individual lacks an individual credit history, as can be the case even in the 21st century, the process of developing one needs to commence.
Women remain more at risk of not having an individual credit history when a marriage ends. Fewer women are left in this position that was the case a generation ago. However, women in divorce proceedings still tend to be more at risk of lacking an appropriate individual credit history in the aftermath of a divorce.
Divorce Finances:Conserve Money
Divorce oftentimes results in a period of financial instability and insecurity. Another step to take before filing for divorce is conserving money. In addition, money should be set aside to ensure financial obligations are met during a divorce case.
In addition to financially preparing for divorce, a person must be proactive in selecting a divorce attorney. The typical divorce lawyer will schedule no-cost, no-obligation initial consultation to discuss the ins and outs of marriage dissolution.