10 Things you should do in anticipation of filing for a divorce
So you are contemplating divorce and are probably experiencing conflicting emotions. The feeling of anxiety and uncertainty can be overwhelming and you want to know how to proceed. There are many different ways people handle the stress of a divorce. In many cases, a married couple has been together for years and their assets and liabilities are completely interwoven. They share real estate, bank accounts, mortgages, bills and credit cards. This blog entry will attempt to provide you a quick and easy guide to some immediate steps you can take once you choose to file for divorce. This post will focus more on the financial aspect and we will address issues related to children in more detail in a future blog entry.
1. Know what you have.
One of the first things an attorney will ask you regarding your divorce is, “What assets and liabilities do you and your spouse have?” In many cases, one spouse will handle all of the financial issues of the marriage while the other spouse will handle other issues. This can leave one spouse unable to answer that basic question. This is usually a result of innocuous division of “labor” rather than an overt attempt to conceal assets, but the end result is that one spouse can be in the dark about what the parties actually own.
Start by making a list of all assets (real estate, retirement accounts, bank accounts, investment accounts, vehicles, insurance policies, etc.) that you can remember. Add to this list as you recall other assets. You can review pay stubs (to show deductions for retirement plans, for example) and tax returns (to show investment properties or other sources of income). You can also search your county clerk’s web site for recorded deed and mortgage documentation.
Request a free credit report from www.annualcreditreport.com. You are entitled to a free credit report each year. This web site is managed by three of the major credit reporting agencies pursuant to the “Fair and Accurate Credit Transactions Act” (FACTA). Obtaining a credit report will enable you to see what, if any, debts are in your name.
2. Make copies of all important documents.
In some cases, a spouse (incorrectly) believes they will get the upper hand by hiding information from the other spouse. The only result of this conduct is that both parties will have to pay their respective attorneys unnecessary legal fees to confirm what would otherwise be obvious (usually with the intervention of the Court). To avoid litigating this issue, you should have back-up copies of your important documentation.
Make copies of the following documents:
- Bank Accounts – savings accounts, checking accounts, CD’s, money market accounts, children’s accounts, etc.
- Retirement Accounts – 401(k), IRA, 403(b), deferred compensation and Pension statements, if applicable
- Tax Returns – preferably for at least the previous 3-5 years, inclusive of W-2, 1099’s, and other substantiating tax forms
- Pay Stubs – try to make copies of both your spouse’s and your pay stubs. If you are unable to obtain your spouse’s information, they will be required to provide it to you during the course of the divorce litigation, but it is always helpful to have it from the beginning.
- Proof of stocks and bonds or other investments
- Insurance policies
- Mortgage Statements
- Credit Cards – any and all credit cards both in your individual names and in your joint names. Make sure you copy down the entire credit card number and expiration date
- Other debts – loans against retirement accounts, loans to other individuals
Your attorney may be able to subpoena much of the above information on your behalf. However, that will increase your attorney fees. Therefore, it is a good idea to be organized and spend time gathering these documents prior to meeting with your attorney.
3. Print out recent statements of all assets and liabilities.
This is related to #3 above, but warrants its own discussion. Once the divorce litigation or settlement negotiations (or both) commence, you and your spouse will need to have accurate information regarding your assets and liabilities. Therefore, you will need to have the documentation to show the values for these items.
Print out the most recent statements for all assets and liabilities listed in Paragraph 2. Since, in pretty much every case, the marital estate concludes at the filing of the Complaint for Divorce, having account information just prior to this date will be helpful, especially if one spouse goes on a spending spree just before the divorce litigation.
4. Change your passwords.
Many times the stress of the divorce causes people to behave irrationally. As a precaution, you should change your individual e-mail, bank account, social media and other related passwords. Hopefully it will be a non-issue and, since these are your own personal accounts and not joint accounts, your other spouse will probably not even be aware of the change.
In this age of social media, you will also want to consider making your Facebook (and other social media) pages private. Be careful with what you post online. A good rule of thumb is to assume that anything you post online can and will be found by your soon-to-be ex. Even if you have the strictest privacy settings on your Facebook page, you and your spouse may share friends who can notify them of any irresponsible or inappropriate material on your Facebook profile.
Additionally, even if you are careful with what you post, you must also be vigilant about monitoring pictures and comments in which are you are tagged. This will also ensure the children are not privy to, and affected by, their parents’ conduct and comments since most children over the age of thirteen utilize social media.
5. Inventory and protect cash and valuables.
Cash cannot be traced and can be easily dissipated without any records. As such, if you or your spouse have a significant amount of cash, you should document it and protect it. The easiest way to protect it is to deposit it into a bank account and hold it until a later date. If you are uncomfortable with that for whatever reason, you can always deposit the cash in your attorney’s Trust Account. The funds will then be held in escrow until a future agreement is reached between you and your spouse or a Court Order.
If you own valuables, such as jewelry or collectibles, you should inventory and take pictures of them. These are much harder to track than bank accounts (where records are automatically generated). It is better to have a list of all of these items (along with corresponding pictures) at the outset of your case.
6. Rely on your support network.
Divorce is one of the most stressful times in person’s life. Unfortunately, the Courts, and the legal system at large, are unable to help you emotionally get through this difficult time. Reach out to close friends and family members. They will be an invaluable crutch during this time.
Often, a spouse can be alienated from their friends and family during a marriage, either intentionally or unintentionally. While this is unfortunate, the good news is that they will usually be more than welcoming once you reestablish communication.
You may also want to consider therapy or counseling to help you cope with the divorce. While your attorney can lend an ear to the emotional turmoil you may be feeling, but they are not trained to be your counselor. If your case is especially contentious, it will be helpful to have a neutral person with whom you can discuss the emotional aspect of your divorce.
7. Start gathering documentation.
There will be a lot of paperwork you will be requested to provide to your attorney in a divorce proceeding. Many of these documents will be at your fingertips, either in your records or available online. However, some of the documentation may take time to locate and prepare. Start now so as to avoid delays later on.
Gather the following:
- Bank Records – at least two years, but ideally more
- Proof of assets
i. Deeds to real property, mortgages, Home Equity Lines of Credit, etc.
ii. Purchase agreements for cars, trucks, boats, etc.
iii. Stocks, bonds and other investment documentation
iv. Appraisals for valuables (jewelry, collectibles, paintings, etc.)
v. Insurance policy or policies
3. Proof of liabilities
i. Credit card debt (even closed accounts that still have balances)
ii. Student loan debt
iii. Utilities (if you are behind)
iv. Mortgage (if you are behind)
4. Employment history
i. Does one spouse have special training that they are not using?
ii. Did one spouse intentionally earn less in the year preceding the divorce as part of divorce planning?
iii. Did a spouse change careers to show a lower income?
iv. You can obtain a Social Security Earnings Statement to show your historical earnings. These statements are prepared by the Social Security Administration (SSA) and are available for download free of charge at this address:
5. Medical history
i. Does one party have a disability that prevents or limits them from working?
ii. Does a party have a history of mental illness?
iii. Does a party have a substance abuse problem? (any DWI’s?)
6. Business records
i. If one spouse (or both) has a business, you will need the business records related to that business. You may have to conduct a business valuation or a cash flow analysis to determine the spouse’s income potential as well as the value of the business. Discuss these issues with your attorney. Any documentation you have regarding the business related to transactions, inventory, accounts, etc., will be helpful.
8. Monitor bank accounts, credit cards, lines of credit, etc.
Even though the legal end of the marriage, for the purposes of equitable distribution, is the date of the filing of the Complaint for Divorce, this legal deadline does not give a party carte blanche to rack up enormous expenses immediately prior to the filing of the Complaint. However, it may be difficult to recoup money or assets that a spouse dissipates prior to or during the divorce litigation. While the other spouse would have recourse in the Courts, from a practical and cost-effective perspective, it is much better to stop such behavior before it starts than to recoup the funds at a later date.
Keep track of your bank records, credit card purchases, home equity lines of credit and other sources of funds. If an account is in your name, make sure you have access to the records (online, by phone, or through the mail). If you are especially concerned about your spouse dissipating a particular account, you should discuss this issue with an attorney immediately, as judicial relief may be the only way to prevent (or minimize) the damage your spouse is causing.
9. Remain civil and don’t involve the children in your conflict.
It is obviously common for divorcing spouses to get into frequent arguments. It is unfortunately equally common for those arguments to involve the children, either directly or indirectly. This must be avoided. There are countless research articles outlining the adverse effects of involving children in a contentious divorce. (link here). There are also many articles discussing the minimal effects of divorce on children whose parents do not involve them in the arguments or who otherwise minimize the children’s role in the separation and divorce litigation.
By mutually agreeing to avoid dragging the children in to the litigation, to not use them as pawns or messengers, and to not discuss the litigation with the children, the divorcing parents are creating a dynamic which allows the children to maintain a semblance of normality and to focus their efforts on adjusting to the concept of having two different homes. Children are resilient and will adjust to this new parenting dynamic, so long as the parents maintain their composure and don’t place the children in the middle of the disputes.
If the divorcing spouses want to have a relatively quick and painless divorce as possible, as most parties claim, they will also need to maintain civility with each other. There will be disputes and, most likely, heated arguments, about the separation; however it is important to remember that these arguments only serve to prolong the litigation and cause one or both parties to become entrenched in their positions rather than attempt to negotiate an amicable settlement. If the goal is truly to resolve the divorce and move on with your life as quickly, amicably, and cost-effectively as possible, that goal must be in the forefront of your mind at all times.
Clearly, these actions are easier said than done. However, with a little effort and by keeping the children in mind, it is possible to end a marriage and, at the same time, remain respectful and effective parents to the child, as well as respectful and civil to each other.
10. Contact an attorney.
Every divorce case is different and unique. The problem arises when you attempt to shoehorn your unique set of facts and circumstances into the statutory and legal requirements of the Courts. While New Jersey Family Courts are courts of equity, meaning their goal is to implement a fair and reasonable result after reviewing all of the circumstances of the case, the Judge’s hands are often tied by the current state of the law.
You should discuss your legal rights with an attorney. Your attorney will be able to guide you through the judicial process, which is often daunting and confusing. Perhaps more importantly, your attorney will also help guide you to reach an amicable settlement to your divorce without the necessity of an emotionally and financially draining trial. Almost every case settles and every case should settle.
Your attorney will be able to give you legal advice about how to handle specific issues pertaining to your case. They will be able to file the appropriate action in Court if there is an immediate issue. They will also be able to help you sort through your financial situation and help you establish your new post-divorce life.