Talking about money can raise tension with any couple, but discussing finances during divorce can be even more stressful. Separating the assets and debts you share with another person has the potential to get heated and complex. However, if you can approach the situation with a clear head and calm attitude, the experience is likely to go faster and smoother.
Take the example of Sharon and William. They have been married for 23 years, have two kids in college and one in high school. Sharon inherited her family’s business which William managed for most of their marriage, although Sharon had a key role as well. The couple has two houses, three cars, a boat, a large savings account, multiple investment accounts and many valuable and sentimental belongings in their home.
As the couple works through their divorce, they struggle to sort out money and other assets. The business is particularly challenging to divide. They both acknowledge it’s Sharon’s family legacy, but also agree William put a lot of time and effort into getting it to where it’s at today.
The process of dividing assets in William and Sharon’s case is extreme. They are unsure of how to even proceed and the thought of losing sentimental belongings or the business feels overwhelming. How would you approach it?
Community Property State
Although Arizona is a community property state, collaborative divorce allows the spouses to work together and have a say in the distribution of assets and debts that may differ from traditional community property principles. Rather than leaving the distribution up to a judge, this type of divorce is handled out of court. The spouses work together with their attorneys, communication coach and neutral financial professional to come to an agreeable outcome.
Assets and Finances During a Divorce
The first step of splitting assets and finances during divorce is to make sure you have everything on the table. This takes honesty and transparency from both parties. Consider all of the assets and debts while making your list, regardless of whether they are in the names of one spouse or both spouses.
Gathering documents can be tedious, but it is necessary. Some of the documents you’ll need to collect include:
- Deed to home and mortgage documents
- Credit card statements
- Checking and savings account statements
- Investment and retirement account statements
- List of assets and debts brought into the marriage
- List of current assets and debts
- Loan statements
- Recent pay stubs or statements
- Tax returns
Many people try to offer advice about what worked for them, but remember your situation is unique. The goal of collaborative divorce is to work things out in the most amicable way possible for your family, leaving both spouses with a satisfactory outcome.
A Quick Guide
Here are some tips that can help you deal with finances during divorce:
- DO be conservative with spending and saving during the divorce
- DON’T make any big financial decisions, purchases or changes
- DO get help if you’re at an impasse
- DON’T hide assets
- DO consider your children
- DO prepare to compromise
- DON’T get back at your spouse by withholding money or freezing accounts
- DO be fair about what belongs to whom
- DO consider collaborative divorce if you’re willing to work together
A collaborative divorce is a unique approach to dividing assets and finances during divorce. Financial issues can get complicated, and that’s when experienced professionals are beneficial. Contact Best Legal Choices if you’re ready to discuss finances during your divorce.