Understanding finances to prepare for divorce

On Behalf of | May 28, 2019 | High Asset Divorce

Divorce can be a time of major financial changes for people in Texas; the financial effects of the end of a marriage can be some of the longest-lasting. However, in order for people to advocate for themselves during a divorce and secure a fair settlement, it is important that they better understand their own financial situation. In many families, one partner, typically but not always the husband, is responsible for handling most of the family finances. As a result, the other spouse may know little about marital assets, debt and income, potentially putting them at a disadvantage in the divorce.

When preparing to file for divorce, there are some key documents that people should gather and review. Tax returns and other tax documents, including 1099s, W-2s and K-1s, are some of the most important. These provide detailed information about both parties’ income, investment income and capital gains, and this information can be used to present to the court as well as to advocate for a fair distribution in property division. If there is a privately owned family business involved in the divorce, it is also important to gather those tax documents.

Understanding the couple’s lifestyle can also help people to plan for divorce. Reviewing old bank statements and credit card bills can give people a better understanding of how much their life costs on a monthly basis. This can also help people to plan for their post-divorce life or negotiate for spousal support. In addition, it is critical to have an overview of marital assets and liabilities.

People going through a divorce may be even more concerned about the financial changes to come when they do not understand their own circumstances. A family law attorney may help people advocate for a fair settlement on a range of divorce matters.