How to Prepare Financially for a Divorce

If your relationship has broken down irretrievably and you know that realistically divorce is the only option, you may be wondering how you can afford to divorce your partner.

It isn’t just the cost of the actual divorce that you are probably worried about, you may be worried about how you will be able afford a new house, run a car and pay the bills by yourself whilst trying to maintain some savings and pension contributions.

There is a lot to consider when thinking about getting a divorce, but rest assured the Courts will always do what is fair for both parties and having a reputable family law solicitor on your side is always a good idea.

How to prepare financially for a divorce

1. Before divorce proceedings begin it would be useful to gather all your bank statements, and subscription emails to help track your monthly outgoings including household bills, transportation, food, childcare arrangements, entertainment and other expenses. The more accurate your monthly outgoings are, the better the position you will be in to see what you can still afford following the separation of finances.   It may also be a good time to complete some financial hygiene and review all of your subscriptions and memberships as there may be items that you no longer need. 
2. Make sure that you have your own bank account in your own name. It is not advisable to just empty the joint account into your own account prior to a divorce as this will be scrutinised during the disclosure process. It is important to take legal advice at an early stage to protect your interests. 
3. Make sure you have details of all of the log ins for any online banking, pension and investment apps, giving you that little extra security that you know where everything is.
4. If you are in a position to start building up your savings in the months leading up to the divorce this may help to give you more financial security during and after the divorce process. 
5. It would be a great time to review your credit score and try to improve this if required. A good credit score is vital for securing loans/mortgages, renting property, and other financial activities post-divorce.

During the Divorce Proceedings

To reach a financial settlement you will both need to give full financial disclosure to the other side. This will include details of

1. Assets: savings and investment account statements for the past 12 months.
2. Inherited wealth:
3. Property: a list of real estate, vehicles and other assets accrued before and during your marriage.
4. Details of any business assets if you own a business together.
5. Taxes: income tax returns from the previous three years. Understand your joint income position is important.
6. Debts: details and balances for mortgage accounts, personal loans, credit and store cards. Understand which of these of joint debts that will need to be reviewed on separation.
7. Income: salaries, rental income, dividends and any other revenue streams.

Spousal and Child maintenance

If your spouse is the main earner in the household and you have taken some time way from your career to perhaps focus on bringing up children, do not worry.  The courts will take financial equality into account and your contribution to managing the household and your children’s upbringing will all be considered.  The courts aim is to give both parties a fair share of the marital assets upon division.  This includes pension division.

When there are children in the family, the Child Maintenance Service will agree on a level of child maintenance that the non-resident parent will pay to help with the cost of bringing up the children.  Child maintenance is reviewed annually, or when a parent applies for a variation, so it can stay the same, increase or decrease as required.

Following Divorce

When you have details of your financial position following the divorce it may be a good time to set someshort term and longer-term financial goals, particularly if you are heading toward retirement age.   If you have been given a share of your spouses pension that you may wish to look at how to invest the fund for maximum benefit.  Financial planning is important and seeking the advice of an independent financial advisor would be beneficial.

If you would like to speak to someone about preparing financially for a divorce, then our experienced team are here to help.