Financial Steps to Take Before Filing for Divorce

 Posted on July 27, 2023 in Chicago divorce attorney

Your financial decisions before filing for divorce can have important implications for your future. Taking certain steps can help protect your assets and build a healthy financial life after divorce. If you are considering filing for divorce in Illinois, here are some key financial steps to take beforehand.

Review Your Credit Report

Pull a copy of your credit report and review it for accuracy. Be sure to check for any unauthorized credit cards or loans taken out in your name. Also, confirm your spouse has not missed payments on any joint accounts that may damage your credit score. Dispute any errors with the credit bureaus.

Open Your Own Bank Accounts

Open checking and savings accounts in your name if you share joint marital accounts. Make sure earnings from your job are directly deposited into your personal account moving forward. Close joint credit cards, or remove your spouse’s name if you want to keep the card.

Consult with a Divorce Financial Planner

Seek guidance from a divorce financial planner or advisor. They can analyze your current financial circumstances and projected needs to estimate the settlement you should pursue in your divorce. This provides a helpful starting point for negotiations.

Inventory Marital Assets

List all marital assets and debts, their original and current values, and relevant account numbers. This includes tax returns, pay stubs, retirement accounts, real estate holdings, investment accounts, collectibles, and personal property. Being organized saves time during disclosure.

Value Businesses and Professional Practices

If you or your spouse own a business, business valuators can assess the current fair market value to be divided. Also, account for professional practices like law firms in the property division.

Consider Tax Implications

Consult with a divorce CPA to develop a tax strategy that minimizes liability when dividing assets. Certain transfers of property between spouses can be made tax-free.

Change Beneficiaries on Accounts

Update beneficiaries on life insurance policies, retirement accounts, and transfer-on-death bank accounts to remove your spouse once the divorce is filed. This avoids assets going to them by default after divorce.

Taking these proactive steps can make the divorce process less financially stressful. Working with professionals helps maximize and protect assets.

Contact an Illinois Divorce Lawyer

Divorce is a difficult process, but taking the right steps can help protect your financial future. Contact a Kane County family law attorney to get guidance on the right legal steps to take. Call The Law Office of Matthew M. Williams, P.C. at 630-409-8184 to begin your journey.

Source: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2087&ChapterID=59