By Heather Needham, Financial Advisor CDFA®
While America’s divorce rate has dropped in the last decade, three out of every 10 marriages still end in divorce.
If you are considering divorce, it’s essential to have a strong team behind you, including a Certified Divorce Financial Analyst (CDFA), who can help you achieve an equitable divorce settlement. As a CDFA with Northwestern Mutual, here is a pre-divorce checklist I use with clients to help them get their financial affairs in order.
- Consult a divorce lawyer or CDFA.
The best time to consult a divorce attorney, mediator and CDFA professional is when you’re considering a divorce. Prepare by learning about the different divorce options to determine what works best for you. There are many important considerations to be aware of, such as timelines for dividing retirement plans, financial accounts and health insurance.
- Prepare a parenting plan.
If you have minor children, a mediator or attorney can help both parties develop a parenting plan in the family’s best interest. This includes evaluating your living circumstances moving forward.
- Create a post-divorce budget.
Meet with a CDFA professional to consider all your monthly expenses and estimated income. This will help your attorney or mediation team determine appropriate maintenance and child support amounts.
- Prepare a complete list of assets and liabilities.
List all marital and non-marital property. If you are a business owner, five years of tax returns will be necessary.
- Compile all financial statements and documents.
Documents you should provide to your lawyer and CDFA professional include, but are not limited to: three years of income tax returns, investment account statements, insurance information and more. Scan the QR code to the right for a complete list of documents you’ll want on hand.
- Take a home inventory.
Include furniture, electronics, artwork, jewelry and other items of value.
- Assess your earning potential.
You’ll need your current salary and bonus information if employed. Be sure to include any profit sharing provided by your employer or company. If you are not employed and will require income to supplement maintenance and/or child support, start thinking about your employment options and associated income levels.
- Ensure your privacy.
Consider opening a PO box where you can receive confidential correspondence from your attorney and other advisors. Also, consider changing passwords for online accounts.
- Start building credit.
Open personal checking and credit card accounts in your name to start building personal credit. Access a free credit report to check your credit status.
- Ensure your safety.
If you feel you or your family are not safe, contact a domestic abuse hotline or law enforcement immediately.
Disclosure: Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI and its subsidiaries. Sandy Botcher is associated with the local office at the above address and is not a licensed insurance agent, registered representative of a broker-dealer, investment adviser representative of a registered investment adviser, or representative of a federal savings bank.
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