For most couples, the hardest bullet to bite when terminating a marriage may be sorting out the divorce finance details. Every dollar of income earned, or asset obtained while you are married is considered a marital asset and is subject – with some exceptions – to division.
Breaking out who pays what bills or who earns more is not a deciding factor in how the money is divided. The court does not look backward, it looks at your current financial situation when determining the division of assets in regards to divorce finance.
Divorce Finance if You Own a Business or Real Estate
If you or your spouse own (or jointly own) a business, it may be necessary to have a business valuation completed. This is the process of determining the economic value of a business. Business valuations are typically used to determine the fair value of a business during a merger or acquisition or for taxes. But, they may be needed for a divorce proceeding as well.
Similarly, if there are real estate holdings involved, you may need to have your home or property appraised to identify its value.
Four Reminders Regarding Divorce Finance
1. Maintain Your Financial Obligations
You and your spouse must maintain and uphold your financial obligations until the divorce is final. You must continue to jointly pay bills until there is an agreement from the court. Examples include utility bills, school tuition, travel league/lesson fees, etc. Failure to keep things as normal as possible can lead to additional headaches and stress, including damage to your financial profile and credit rating.
2. Financial Documents
Divorce cases depend heavily on documentation. Your financial account records, phone records, mortgages, and car notes are all likely relevant to the divorce. Make copies of all relevant documents before filing for divorce. Remember to also secure records of shared online accounts. Divorces can be contentious, so having copies of financial documents is important to your case.
3. Joint Bank Accounts and Credit Cards
We may advise you to either close your financial accounts or leave them the same. This depends on how you and your spouse handle your joint financial accounts and credit cards. The goal is to reduce the risk of your spouse draining bank accounts or investment portfolios.
4. Making Necessary Sales or Purchases
In most jurisdictions, the judge automatically issues an order at the beginning of your divorce case that prohibits you or your spouse from selling, buying, or disposing of any marital property. If there is a legitimate sale or purchase that’s been in the works, it’s best to complete it before filing for divorce.
