During the course of a marriage, finances inevitably become intermingled. There are often shared credit cards and bank accounts. If a house is purchased, both individuals usually take out a mortgage together. This can also be the case with car loans and even educational loans which are applied for jointly. When a marriage dissolves, a dispute often ensues in determining who is entitled to these assets and who will assume joint debt. When couples can’t come to a mutually accepted agreement, the Arizona courts must intervene, often resulting in a time-consuming, expensive, and public proceeding. It is important to remember that Arizona is a community property state and therefore all property acquired from the date of marriage until the date of filing for divorce will be divided as per the parties’ agreement or court order.
If you think your marriage is headed for divorce, there are a few things you can do, even before separation, that can help to make the dissolution of your union and joint finances a bit easier should you and your spouse decide to part ways. The first step is to speak with a financial advisor who can assist you in organizing and creating a plan. In evaluating your current financial situation, it’s important that you not only consider your personal and joint assets but also your bills and annual taxes. A personal net worth statement helps to do just that by compiling all of your expenses, income, assets, and liabilities into a single document. In this statement, be sure to note all marital and non-marital assets and liabilities, and detail non-traditional income sources such as stocks and dividends. While this may seem like a big undertaking, it will be required by the court if your divorce is contested and some preparation now can save you a great deal of time during a stressful divorce proceeding.
One of the most important things you can do if divorce is looming is to separate your finances from your spouse as much as possible. You might consider closing joint bank accounts and credit cards and opening new accounts as an individual. This can help to protect you from hefty bills if your spouse decides to go on a spending spree, whether the charges are legitimate or out of spite. During this time you should also check your credit report for any accounts your spouse may have opened or bills they may have missed payment on to ensure your credit score doesn’t take a hit.
Once your personal net worth statement is prepared and you have successfully established some financial independence, you can start moving forward with a new budget that takes your income and expenses as well as your spouse’s financial situation into account and determines how much each of you will require to live separately. If you have children, you will also need to consider their needs and what it will take to keep their lifestyle the same during, and long after, the divorce. It is also important to start looking into life insurance and disability insurance to protect your children in the event of your death.
Lastly, don’t wait to change the beneficiaries on your insurance policies and other assets. Although some cannot be changed unless there is a final divorce decree, others may be altered and should be done as soon as possible. An experienced family law attorney can help you to understand your options before you file for divorce and protect your best interests throughout the proceedings. Contact the Arizona family law attorneys at Garnice Law today at (480) 351-4804 for a free consultation.