Joseph H. Beale Attorney At Law, PLLC

Virginia Legal Blog

5 critical steps to prepare your finances for divorce

It may not be something you're looking forward to, but it's a necessity to prepare your finances for divorce. With knowledge of your situation, it's easier to make confident decisions that will work in your favor in the future.

Here are five steps you can take to prepare your finances for divorce:

  • Gather all necessary financial records: These vary from person to person, but typically include bank account statements, retirement account statements, mortgage statements, tax returns and pay stubs.
  • Make a list of your assets and debts: Knowledge of both your assets and debts is imperative as you move into discussions regarding property division. Also, make note of which assets are jointly owned and which ones are owned by either you or your ex.
  • Open your own accounts: Once you close joint accounts, it's time to open new ones for yourself. This can include bank accounts, retirement accounts and a credit card account, among others.
  • Create a budget: Your income and expenses are likely to change as a result of divorce, so creating a new budget is a must. This is also a good time to search for unnecessary expenses, as you may want to eliminate these when possible.
  • Get help: You're not alone as you prepare your finances for divorce. There is plenty of help to be had, ranging from a divorce attorney to a financial analyst to your tax professional. These professionals can answer your questions and provide direction during this difficult period.

How income affects the property division process in divorce

When a marriage ends, there are often significant concerns regarding what the financial future will look like. The terms of the final order will affect a Virginia reader for years to come, and a person's income structure will play a significant role in this. How and how much a person is paid will impact how he or she fares in the divorce. 

If a person makes a normally structured salary, such as receiving paychecks every two weeks, this will not be complicated to address during a divorce. However, there are pay structures that can be quite complex, such as those that may offer bonuses, commission pay and more. The lesser-earning spouse may be entitled to spousal support, and the amount of this support depends on the pay of the other spouse.

Why do Virginia couples file for divorce?

The choice to end a marriage is not always an easy one to make. For some Virginia couples, divorce only becomes inevitable after months of separation, discussion and consideration. There are many common issues that can lead to this decision, and understanding why it happens can help a person move forward with his or her divorce.

Most people get married for love, and a lack of love is one of the most common reasons for divorce. Feelings can change over time, and things can happen that can alter spouses' feelings for one another. Even if spouses are friends, a loss of romantic feelings is detrimental to a marriage, as is a loss of trust, mutual respect and sympathy. These are all things that serve as the foundation for many marriages. 

Wills and smart estate planning steps for Virginia couples

Planning for the future is not an easy process, especially for a Virginia couple that just got married. It's difficult to know what kinds of legal protections are necessary and important for two people who may be young with lower incomes and little savings. Drafting wills, trusts and other estate planning steps can be a smart course of action for a couple of any age and financial status.

One smart step for a couple starting out with the estate planning process is to simply take inventory of their assets and their debts. This can help someone understand where he or she is and what protections can be helpful for their current status. In addition to inventorying property and assets, it is also smart to go ahead and identify beneficiaries. This is prudent even for couples who do not have kids yet.

Arriving at child custody arrangement can be complex

Divorce is hard and divorce is sad; both of these are magnified when children are involved. In Virginia and across the country, child custody is often a difficult issue to resolve as both parents typically want what is best for their child, but may have different ideas of what that may entail. There are different types of child custody and different factors to be considered in determining the best interests of the child.

The different types of custody include joint custody, legal custody, physical custody and sole custody. Joint custody typically involves a child spending part of his or her time with each parent. This can be the best option if the parents live in relatively close proximity to each other to allow the child to attend the same school and activities and maintain friendships. Legal custody gives a parent the right to make decisions on behalf of the child regarding such things as medical care, schooling and activities. Sole custody grants legal and physical custody to one parent but the other may have visitation rights.

You need to adjust your estate plan once you file for divorce

Filing for divorce can quickly cause a lot of stress and complicated emotions in your life. Even though you may have planned on ending your marriage for some time, taking the steps necessary to begin the process can be harder than people anticipate.

Underestimating the emotional difficulty of divorce can leave people vulnerable to overlooking critical considerations. Severing your legal ties to your former spouse can take a lot of time and planning. The longer you were married, the more intertwined your finances, careers and social lives have become.

Best child custody arrangements involve time with both parents

A child typically does best in a family where two parents are involved and available. This does not have to apply to only married parents in Virginia. Divorce is hard but it is possible for two people to successfully parent their children when they are no longer married. A recent study points out four areas involving child custody matters that are considered vital to maintaining the child's health and sense of well-being.

Perhaps the most important finding was that a father's time is more valuable than the money he may be able to contribute. Working 80 hours a week to provide financial support does not enable a father to bond with his child. It has been shown that fathers of premature babies who visit them in the hospital experience similar physiological changes to what mothers experience. Changes in the male brain are evident in the increase of oxytocin and a decrease in testosterone.

Parent's divorce choices can impact their kids' marriage

When a couples chooses to end their marriage, it affects more than just those two individuals. The choices they make will have an impact on the youngest members of the family, and sometimes, these effects are not always positive. Studies have shown that children who lived through their parents' divorce are more more likely to eventually go through a divorce themselves. 

Virginia parents cannot control the choices their children make when they become adults. However, they can be cognizant of the ways their decisions have impacted the mental and emotional well-being of their children. During a divorce, they may strive to provide as much stability and security as possible for the kids. Through practical and fair custody and visitation plans, parents are able to help their kids adjust to post-divorce life.

Single parents can benefit from trusts in their estate plans

A single parent is solely responsible for the physical, emotional and financial well-being of a child. This is an immense responsibility, and it's easy to see how some Virginia parents may get caught up in day-to-day life and overlook plans for the future. Estate planning is critical for single parents, and they may benefit from using trusts as a way to accomplish their goals.

A trust is a way to set aside and protect assets for a specific use in the future. In the event that the parent passes away, a trust will accept funds from his or her estate, IRA accounts, insurance settlements, retirement accounts and more. This money would be protected and used solely for the benefit of the child. A parent can also name a trustee, which is a trusted individual named to oversee how the funds in the trust are used. 

Smart money management during divorce is important

When people initiate the process of ending their marriage, one of the main concerns they have is about their financial futures. It's normal to have serious misgivings about what the future will look like on one income, and it may take some adjustments to various areas of a Virginia reader's life. Smart money management during the divorce process will lead to a smoother transition to post-divorce financial circumstances.

One helpful money management tip is to plan a budget. By knowing what's coming in and going out, a person can better monitor spending. Divorce can be an expensive and financially uncertain time, and it's smart to be cautious with spending. A person may also want to start making adjustments in lifestyle now. Even in high-income divorces, each party may have to get used to new financial circumstances, and having a spending plan now can pay off in the future. 

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