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Law Office of Lily L. Huang

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Planning finances for a potential divorce

While few people like the idea of getting a divorce, the reality is that around 39% of marriages in the United States will end in divorce. California residents may be interested in steps they can take to prepare themselves financially for a divorce, which could minimize the financial impact of it.

The first step a person would want to take is understanding their assets. This is especially important for an individual who has not played a large role in caring for the family’s finances. They should gather bank statements, pay stubs, property deeds, outstanding loans, credit card statements and investment and retirement account information. Having access to all of these documents will allow them to truly understand where they sit financially.

The next step is calculating what a new budget would be after a divorce. They would want to calculate things like living expenses, car payments, retirement contributions and tuition payments. They may have to pay child or spousal support. Their medical insurance may be affected by a divorce, which means that they may be responsible for a medical insurance payment each month.

Sticking to a conservative budget is essential when planning a divorce. An individual does not know what expenditures lie ahead. They also don’t know if they will receive or have to pay spousal support, which could affect their standard of living. Additionally, if a person has started the divorce process, they may not be legally entitled to make any large purchases until after the divorce is finalized. It is better to wait until a person really understands their financial situation before splurging.

Many questions arise as a person considers a divorce. A lawyer may answer questions regarding property division, spousal support and other legal matters that relate to ending a marriage. A lawyer may also help a client file the paperwork needed to get a divorce started and even represent a client in court if it is necessary.