Financially Preparing for Divorce in Massachusetts: What Steps to Take?

So you are considering divorce. Maybe you have grown apart from your partner, or one of you has changed fundamentally. Regardless of the reason, as you begin to think of a life without your spouse, fear may begin to consume you about how you will be able to afford to live on your own. On the other hand, you may be concerned that if you divorce, you will have to part with the money and assets you have worked hard to accumulate.

Either way, you may start to question whether it is worth staying with your partner even if you are unhappy. Though staying may seem like the smart option — or the only option — there are ways you can protect your financial situation, even if it is precarious in the short term, and divorce your spouse with confidence. Here are five of the top ways how.

File for divorce.

For many people, financial security is one of the biggest considerations that factor into their decision whether to stay married or divorce. As a result, many people remain in marriages that are unhealthy. Staying in an unhappy marriage can be emotionally and psychologically damaging. However, with the right legal and financial team, you can start a new life independent of it.

Though it may feel daunting to divorce yourself financially from your spouse, especially if, for example, you stopped working sometime after getting married, it can be liberating to be financially independent. A 2016 study conducted by Avvo revealed that 73% of divorced women did not regret their decision to end their marriage and found they were happier living the single life even if they were worse off financially.

As for concerns about how much you will have to pay your spouse? You can alleviate those worries, too, with one simple step. And that is, once you make the official decision to move forward with your divorce, you should consider seriously putting your plan into action by retaining a family law attorney and having them file for divorce with the court on your behalf.

This move essentially stops the financial clock in various ways. First, it stops the clock on the length of your marriage for purposes of alimony. Generally, the longer the marriage, the more alimony you have to pay. Also, because an automatic restraining order goes into effect once the other party is served, , it can also serve to protect the depletion of marital assets by your spouse. The filing date can also affect decisions involving child support, spousal support, parenting time, and various other issues, depending on your individual circumstances.

On the flip side, doing nothing can actually cost you money. If, for example, you are the higher-earning spouse, you may be working hard to build marital assets that are going have to be divided anyway. Also, as the more financially dependent spouse, you could potentially risk your spouse depleting assets or hiding them, in addition to hiding income or other information that could be relevant to your financial picture at some point. In either scenario, you would remain stuck in a marriage that isn’t bringing you joy, if not a worse situation. Now, ask yourself: Are the above possibilities worth it?

Gather as much financial information as you can.

Why? You, and your divorce attorney, will have to determine your monthly “nut” and how much it is going to cost you to live post-divorce.

Do your best to locate and make copies of all financial records you have before your divorce starts. This includes all tax returns for the past three to five years, wills, trusts, loan applications, loan documents, financial statements, banking records, brokerage account statements, credit card statements, deeds to real property, car titles, insurance policies, and insurance riders.

Also, provide copies of any records that can serve to prove that certain assets should be separate and not divided in divorce. This applies to inheritance, gifts, or property you owned before marriage. In some instances, these assets can remain yours, and documentation can help to that end.

Be sure not to leave any assets off your list, either. Even if you don’t want a particular asset, your lawyer can use it to negotiate for something else you do want.

If your spouse owns a business or has an occupation that generates cash that may not be easily traceable, your divorce lawyer can also help you to engage a forensic accountant to look for evidence of additional income. A forensic accountant can similarly value a business your and or your spouse own.

Finally, don’t overlook hobbies or side hustles that might have expensive equipment associated with them or generate income.

Feeling overwhelmed or not sure about what documents you need to collect? Use the following checklist for added direction.

Asset-Related Documents

• Deed
• Home equity line(s) of credit (HELOC)
• Mortgage(s)
• Personal property
  • Antiques
  • Art
  • Bonds
  • Collectibles
  • Jewelry
  • Stocks
• Real estate interests
• Vehicles
• Airplane
• Boats
• Cars
• Farm equipment

Childcare Documents

• Bank accounts
• Birth certificates
• College savings plans
• Investment accounts
• Report cards and school records
• Trusts
• 529 plans

Financial Documents

• Credit card accounts
• Debt records
• Bankruptcy
• Foreclosure
• Liens
• Employment records and paystubs
• Financial records (i.e., bank statements and loan information)
• Income tax returns for the prior three to five years
• Investment account statements
• Pension plan information
• Retirement savings accounts
• Social security statements

Personal Documents

• Annulments (from any previous marriages
• Birthdates for you and your spouse
• Divorce decrees (from any previous marriages)
• Internet history related to children or finances (emails, texts)
• Judgments and pleadings involving you or your spouse
• Life insurance policies (including those from either spouse’s employer)
• Marriage certificate

If you can’t get your hands on all of the information detailed on this list, don’t worry. Your divorce lawyer may be able to obtain a more complete picture of your marital finances during the discovery stage of divorce. In the meantime, there is something else you can do, and that is to …

Educate yourself on personal finances.

Being in the dark about money can cost you. Spouses who handle all of the finances during their marriage generally have an advantage over those who don’t. That said, if your spouse had control over your marital finances, let today become the day you take control of your life.

The best way to do that is to become educated about personal finances. From the various types of bank accounts that you can have and what it means to balance a checkbook and pay monthly bills according to a budget to how you can plan for retirement and apply for medical insurance independent of your spouse, among other topics, there is much to learn. But once you do, you can gain a sense of control over your life that you never knew before.

A financial professional, perhaps a certified divorce financial analyst (“CDFA”) or a financial planner, in addition to your divorce attorney, can help educate you. You won’t learn everything overnight, but the sooner you get started, the easier it will be.

Accept that both sides usually have to make some financial sacrifices during a divorce.

A “good” settlement doesn’t mean that you walk away with everything you had expected when you first entered negotiations. What it does mean is that each party leaves with some of their wishes fulfilled and an understanding of why others weren’t. In other words, you and your spouse will likely have to make concessions during the divorce process and adjustments in your post-divorce lifestyles.

This is all made easier when you have an understanding of your financial picture before your divorce, during the divorce process, and after your divorce is finalized. If there are missing pieces of the puzzle, move forward from where you are today. This is how to build a financially sound future.

Meet with an attorney for a confidential assessment.

Divorce can be an emotionally and financially taxing process for everyone involved. However, by having thorough and clear documentation of your shared and personal assets and developing financial literacy as an independent person, you can set yourself up for financial success post-divorce.

Just as importantly, if you are worried about your financial stability, remember that you have options other than remaining in an unhappy and unfulfilling marriage. At Farias family law, our experienced family law attorneys can help you assess those options and plan for tomorrow and many tomorrows to come. Conctact our office today.