How to Prepare Financially for a Divorce
Divorce brings financial challenges that require careful planning. Missouri law considers several factors when dividing assets, calculating spousal support, and determining child support. Taking steps to prepare financially can make the process smoother and help secure your future.
So, how should you prepare yourself financially for a divorce? At Talbert Law LLC, we have helped clients in Kansas City, Missouri, through divorce for years. Let’s work through the specifics of divorce and break down how you should prepare yourself.
Assess Your Current Financial Situation
Understanding your finances is crucial before starting divorce proceedings. It's important to gather any documents and review accounts to get a clear picture of your financial standing. Some steps you can take to assess your financial situation include:
Collecting all financial documents, including recent bank statements, tax returns for the past three years, and pay stubs. These records will help establish your income and financial contributions to the marriage.
List all assets, including real estate, vehicles, investments, and retirement accounts. Knowing what you own helps prevent disputes over property division.
Identify outstanding debts such as mortgages, student loans, car loans, and credit card balances. Reviewing these obligations will help you plan for post-divorce financial stability.
Monitor your credit reports for discrepancies or joint debts you may not be aware of.
Determine your monthly expenses by calculating rent or mortgage payments, utilities, groceries, insurance premiums, and childcare costs.
Having a comprehensive understanding of your finances will allow you to make informed decisions during the divorce process.
Separate Your Finances and Establish Individual Accounts
Once divorce proceedings begin, you should separate any finances that are jointly held by you and your spouse. This process involves more than just opening a new bank account; it requires strategic planning to protect your financial well-being.
Start by opening a personal checking and savings account and rerouting any direct deposits to your new account. If you previously shared a credit card with your spouse, apply for a credit card in your own name to start building independent credit. Maintaining a solid credit history is crucial for future financial stability.
Tracking personal expenses separately from joint accounts can also help create a clear distinction between shared and individual financial responsibilities. Make sure to review automatic payments linked to joint accounts and update billing information for utilities, insurance, and subscriptions.
If you and your spouse share financial responsibilities, consider discussing temporary arrangements to cover joint expenses until the divorce is finalized. Missouri courts often issue temporary financial orders to maintain stability during the process, so keeping detailed records of financial transactions can help protect your interests.
Understand Missouri’s Asset Division Laws
Missouri follows an equitable distribution model, meaning assets are divided fairly, though not always equally. Courts take various factors into account when determining asset division, making it essential to understand what influences these decisions. Each spouse’s income and earning potential play a significant role in property division.
The court considers whether one spouse earns significantly more than the other and if any financial imbalance exists. Contributions to the marriage, including homemaking, child-rearing, and unpaid labor, are also weighed. If one spouse sacrifices career opportunities to support the household, that factor may influence the division of assets.
The length of the marriage affects how assets are distributed. Longer marriages typically involve a more equal division of assets, while shorter marriages may result in each spouse retaining what they contributed.
The courts will consider the economic circumstances of each spouse, including their ability to maintain a similar standard of living post-divorce. If a spouse has wasted marital assets through reckless spending, gambling, or hiding funds, the court may adjust the division accordingly.
Understanding these factors can help you prepare for negotiations and protect your financial interests during divorce proceedings.
Plan for Child and Spousal Support Obligations
Missouri courts determine child support based on a formula that considers both parents’ incomes, childcare costs, health insurance expenses, and other relevant factors. Preparing for these obligations in advance can help ease the financial transition.
Child support calculations take into account each parent’s gross income, the number of children, and any additional costs such as medical care and educational expenses. If one parent has primary custody, the other parent typically contributes financially to cover the child’s needs.
Spousal support, or maintenance, is awarded based on several factors, including the financial needs of the requesting spouse and the other spouse’s ability to pay. The court considers the standard of living maintained during the marriage and whether the lower-earning spouse requires additional support to become self-sufficient.
The duration of the marriage is also a key factor, as longer marriages are more likely to result in spousal maintenance. Understanding how these obligations are calculated allows you to adjust your budget and prepare for your financial responsibilities post-divorce.
Create a Post-Divorce Budget
Adjusting to a single-income household requires careful financial planning. A well-structured post-divorce budget can help you regain financial independence and stability. Some steps you can take to create a post-divorce budget include the following:
Identify essential expenses such as rent or mortgage payments, utilities, groceries, and transportation costs.
Consider health insurance and medical expenses, particularly if you were previously covered under your spouse’s plan.
Budget for child-related expenses, including daycare, school fees, and extracurricular activities, is equally important.
Incorporate an emergency savings fund into your budget to provide financial security in case of unexpected expenses. Even setting aside a small amount each month can help in the long run.
It’s also beneficial to cut non-essential expenses, such as streaming subscriptions or dining out, to balance your new financial situation. Developing a budget early in the process can prevent financial stress and create a solid foundation for the future.
Protect Your Credit and Financial Future
Divorce can impact credit scores if debts are not properly divided, making it crucial to take proactive steps to safeguard your credit.
One of the best ways to protect your credit is to pay off joint debts before finalizing the divorce. Outstanding balances on joint accounts can affect both parties, even after the divorce is complete. If paying off debts isn’t feasible, consider transferring balances to separate accounts to remove financial ties with your former spouse.
Closing joint credit card accounts or removing authorized users from your accounts can also prevent unwanted financial liabilities. If your ex-spouse accumulates debt on a shared account, you may still be held responsible for repayment.
Monitoring your credit reports regularly will help you catch any discrepancies or unauthorized activity. Divorce-related financial changes can impact your credit score, so staying informed about your credit status is essential.
Avoid taking on new financial commitments, such as large loans or major purchases, until after the divorce is finalized. These steps can help establish financial independence and protect your credit standing moving forward.
How We Help Clients During Divorce
Our legal firm strives to help protect your financial interests during a divorce. We help clients gather documentation, negotiate fair settlements, and advocate for favorable asset division and support arrangements. Our experience in Missouri family law allows us to offer strategic legal advice tailored to your unique situation.
We assist with reviewing financial records, preparing for court proceedings, and developing legal strategies to secure a stable financial future. Whether you need assistance negotiating child support, dividing assets, or determining spousal maintenance, we work closely with you to achieve the best possible outcome.
Contact Us Today
Divorce can be emotionally and financially overwhelming, but with the right legal support, you can move forward with confidence. If you’re preparing for divorce, our attorney at Talbert Law LLC is ready to provide the legal guidance needed to secure your financial future. We serve clients in Clay County and Jackson County, Missouri, as well as Johnson County, Kansas. Contact us today to schedule a consultation.
