Divorce is a complicated and premeditated process. The process of divorce starts with a spouse deciding to divorce. The key to a successful divorce is planning for it.
Divorce can be divided into two aspects of legal and financial divorce. In either case, it is advisable to hire professionals. But before going to the professionals, it is crucial to get a few things underway.
What is Divorce Financial Planning?
Divorce financial planning is planning the finances for life post-divorce. It is described as financial planning for a fruitful life after the divorce. It is defined as the process or the plan to reach a fair and beneficial financial settlement.
Steps: Divorce financial planning starts when the spouse communicates his or her decision to divorce. This is the time to start planning for your legal and financial divorce.
Communicate and Discuss with Your Spouse Your Financial Expectations and Needs: Financial divorce is closely linked with legal divorce. The ramifications of legal divorce influence financial divorce planning: - What type of divorce are you going in for?
- Are you planning to sue for child custody?
- Are you going to demand the ownership of the matrimonial home or a share in the percentage of the sale proceeds?
These questions determine the financial divorce plan. Does the spouse need to have one or not? It is recommended to have one in place regardless of the type of legal divorce being sought. Financial divorce planning is your safety net to a good and financially secure future on your own terms.
Start Documenting All Financial Details: The second step is to document all minute financial dealings, accounts, receipts and benefits accruing to the entire family. This documentation goes a long way in determining the annual net value. It also helps in deciding the percentage of share to be demanded of this income. The documentation should also involve your contribution to the family income.
This may take the form of personal income, financial investments in familial property purchase including individual loans. It is essential for the spouse to detail all financial debts, accounts, credit cards and gifts incurred during the marriage duration. It is also important to lay claim to pension benefits accruing to you in your documentation. At this point, it must be clear that you can claim pension benefits if your spouse has applied for them during time of the marriage. If the application is made after the divorce, the chances of a successful pension claim are few.
Consult a divorce financial specialist. After documentation, it becomes crucial to get the process of financial divorce underway. Usually, divorce firms recruit financial divorce specialists. These professionals work with legal divorce specialists. The client enjoys the advantage of the legal and financial divorce being argued simultaneously.
But in uncontested divorces, the spouse has to hire a personal divorce financial specialist. The professional helps the individual in documentation of financial details. This includes advising the client on what to demand and expect. Ultimately, the seeds of financial divorce lie in the hands of the client. The specialist acts as the guiding hand. The individual can demand and expect a share in the personal income of the spouse if this income was earned during the marriage duration with help and advice from partner.
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