How to prepare financially for a divorce

On Behalf of | May 28, 2019 | Uncategorized

When people in Illinois get a divorce, they need to be able to protect themselves financially, and this requires a thorough knowledge of their financial situation. They also need to understand what their expenses will be like after the divorce. The first step should be to gather as much documentation as possible.

Tax returns, bank statements and credit card statements from the past three years will all be useful. Pulling credit reports can help people identify joint accounts and jointly held debts they will need to address in the divorce process. Next, they should start putting together a lifestyle analysis. This needs to be a thorough record of all expenses both before and after divorce. In addition to financial statements, online tools can help by pulling information from accounts to identify expenses. People should make certain they are accurate in estimating expenses. For example, while inflation is generally low, this does not apply to college costs and health care. Financial professionals may be helpful in putting together these budgets.

They also need to track down all sources of property, including valuable collectibles, investments, retirement accounts and assets stored in safety deposit boxes. Both spouses will need to submit complete financial records to the court.

The couple must then either decide how they will divide their property or go before a judge. Like most states, Illinois is an equitable distribution state, and this means that marital property will not necessarily be divided 50/50. For example, if one person owns a business, any contributions of the other spouse to the company’s value will be considered in assessing what share of the business the spouse might own. Couples may also have the option to negotiate an agreement in which they each take different assets instead of dividing any of them.

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