The decision to get a divorce is almost never taken lightly. It carries serious emotional consequences in the short and long term for both spouses – regardless of who initiates. Once divorce is on the horizon it is vital that steps be taken in preparation. Failure to do so can be emotionally and financially damaging.
Each divorce has its own special circumstances and must be dealt with individually. However, every divorce results in a separation of assets and assignment of obligations as an outcome. Understanding this is the first step to being prepared for what comes next.
Information Gathering on Finances
A divorce is essentially separating one shared life into two individual lives. Accordingly, all assets, liabilities, and property should be identified, and you should know the value of each. You should know the value of commonly held assets such as:
- Real property and the amount of equity in it
- Investment accounts
- Retirement accounts
- Stocks, bonds, and/or mutual funds
- Personal property such as vehicles, boats, antiques, and other valuables
You should also know the amount of all liabilities including:
- Balances due on real property such as mortgages or home equity loans
- Balances due on personal property such as cars, boats, and the like
- Credit card balances
Other financial information that is important to know include each party’s earning history and capacity. You must also know the amount normally paid for monthly expenses including household expenses such as utilities, mortgage, taxes, food, transportation costs, and personal expenses.
Property Ownership and Debt Liability
In divorce, some property may be considered individually owned and some may be commonly owned. Generally, property that was owned prior to the marriage will only belong to the original owner. The situation is more complex and nuanced regarding debts incurred during the marriage. Liability will depend on whether your home state is governed by community property law or common law.
In community property states debts are owed by the couple. Most states are governed by common law where debts incurred in support of the marriage, such as food and necessary household items, are owed by the couple while other debts, such as a loan for a car in one spouse’s name, will only be owed by the person incurring the debt.
Divorce will require an accounting of assets and liabilities. In addition, a number of procedural steps and court filings will need to be completed to achieve dissolution of the marriage.
It is a good idea to consult with a lawyer sooner rather than later to ensure you understand the process and how best to protect your interests. Decisions such as whether or not you stay in your marital home, change jobs, remove children from the marital home, or move assets, should not be made in a vacuum. These actions could negatively affect your future rights.
There are options for alternative dispute resolution (ADR) that can be used to negotiate details, such as mediation, arbitration, and collaborative law. But, without a good understanding of the laws of your state, relying solely on ADR for negotiating a divorce might not be in your best interest.
Bucks County Divorce Lawyers at Freedman & Lorry, P.C. Help Clients Prepare for Divorce
If you are contemplating divorce, contact an experienced Bucks County divorce lawyer at Freedman & Lorry, P.C. We can provide you with the knowledge and tools you need to get through this process in a way that best protects your interests. Call 888-999-1962 or submit an online contact form to schedule an initial consultation today. Our offices in Philadelphia, Cherry Hill, New Jersey, and Pinehurst, North Carolina serve clients throughout the surrounding areas.