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How to prepare financially for a divorce

Deciding you want a divorce does not necessarily mean you feel nothing for your soon-to-be ex. As you move through the process, you will likely experience sadness, frustration and anger. Everything you shared now needs to be split, including real estate, vehicles, furniture and money. Many of these decisions may be difficult to make. However, preparing financially can reduce your stress and may help you better adapt to your life after the split. 

Do not immediately empty your bank account

If your divorce is contentious, your first instinct may be to empty your joint account to ensure your spouse does not get to the money. California is a community property state, so income acquired during the marriage is considered shared income. If you empty out an account, you are taking money that may equally belong to your spouse. This will likely lead to issues with the court down the road.

There is nothing wrong with opening a separate account and starting to deposit new earned money into that account. Just refrain from moving money you acquired during the marriage into another account.

Start saving more money

Even if you do not end up in court, your lifestyle is about to change. Maybe you and your spouse split all the bills, or maybe one of you paid more of the bills. Either way, you are not going to be splitting expenses with anyone going forward. Saving a little extra money can help you get through the initial transition. If you do decide to hire a family law attorney, you also want to set aside money to pay his or her fees.

Compile a list of all your expenses

Perhaps you have a spreadsheet of all your monthly expenses, or maybe your former partner paid all the bills. Whatever the case, you need to figure out your monthly bills and then compare that your income. This will help you decide if you can keep up your mortgage payment, or if you can afford your current car.

Gather all your bills together and try to come up with a realistic tally of other expenses like going out to dinner, shopping and travel. If money looks tight, you may want cut back on some extras. Or if you share a home, you may consider selling the home or letting your spouse keep it.

Gather all your other financial documents

When you are pulling bills together, you will also want to gather financial documents like retirement accounts, investment portfolios, checking and saving accounts, mortgage statements, auto loans and any other significant assets. Having documentation of all these assets will prevent your spouse from trying to hide any of this income. That way you can make sure all is accounted for when it is time to finalize property division.

Divorces have a serious impact on personal finances. Preparing for the future impact should ease the transition and may help you move forward more successfully.

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