Divorce and Financial Considerations
Divorce can often boil just below the surface of a marriage for several years before coming to pass, churning until one or both of the spouses can no longer maintain their relationship or avoid the inevitable outcome.
At other times, divorce can be unexpected, leaving one spouse little or no time to prepare for the uncertainty and upheaval that accompanies the end of their marriage. In such cases, a husband or wife who is caught off guard may have little to no time to prepare for the financial issues they may face after their relationship has ended.
No matter how equitably marital assets and debts are divided or how income is distributed through alimony (spousal support) and child support, a newly divorced spouse may find themselves in a difficult situation due to inexperience and lack of knowledge regarding their marital finances. Bills, taxes and insurance all potentially present unfamiliar territory when one spouse has primarily handled those day to day affairs in the past.
Consult with an experienced attorney as soon as possible to avoid common financial pitfalls and consider these important issues in advance of your meeting:
1. Insurance – It may be necessary to assume your own car, renters, homeowners, or health insurance. Pay a visit to your insurance agent to discuss how to proceed with changes in your coverage.
2. Credit Cards – If your credit card was part of a joint account it may be necessary to apply for a card in your own name. Also, it may be best to remove yourself from a joint credit card if you do not need to use the card for expenses while the divorce is pending. You want to protect yourself from being liable for credit card debt incurred by your spouse while a divorce is pending.
3. Banking – Checking and savings accounts should be set up in your own name as soon as legally allowable. Consult with your attorney on the correct process to remove joint account owners or to set up your own accounts.
4. Financial Management – If you have not played a part in your financial management during your marriage, find a good accountant and advisor who can counsel you on issues such as taxes and investments.
5. Taxes – If your spouse has been primarily responsible for filing and paying your joint taxes, find an accountant who can help navigate important tax issues. It’s better to pay a professional than to risk mistakes and potential penalties.
There are other financial implications to divorce aside from the challenges of alimony (spousal support), child support, and the division of assets. If you’re facing divorce, please contact the experienced West Michigan attorneys at Johnsen Wikander and let us help you through your most difficult time.
