Going through a divorce is a stressful and emotional time. And it can be all too easy to forget about the practicalities during a marriage breakdown. However, there are things to consider such as assets, debts and pensions. We break down how to prepare for divorce.
How do you prepare financially for a divorce?
There is no denying that the breakdown of a marriage is emotional. But when a couple has joint finances or own assets together, then it also becomes a practical matter. If you and your spouse have decided on divorce, then there are some steps you can take to prepare your finances.
Five things to do to get ahead
- Get organised: In order to reach some sort of financial settlement, you will need to know exactly who has what. So getting organised and knowing what accounts, assets and pensions your partner has is going to help you. Whether or not you do mediation, you will have to fill in a Form E document which is a financial statement for a financial order. Getting all the information together will help complete this form correctly.
- Think about pensions: When looking at your finances, remember to get up-to-date balances for any pensions you or your spouse have. Most likely you will need to complete a Form P document. So be prepared to contact all of your pension providers in order to have a current value.
- Collect your paperwork: There is a lot of paperwork you will need to gather together. So one of the best ways to prepare for divorce is to get as much of the paperwork together as you can. This will include your original marriage certificate or a certified copy, bank statements for the past 12 months for all of your bank accounts, pension valuations, your latest mortgage statement, credit card statements and proof of income.
- Make a marital budget: Understanding what you spend each month on living costs and what you expect to spend after your divorce will help you to calculate what you both need from a financial settlement.
- Understand the cost of divorce: The best way to prepare for a divorce is to understand how much it will cost and who will pay for the divorce. Whoever files will be responsible for paying the £550 government fee. There is a box you can tick if you feel your partner should be the one to pay, but a court would need to agree to this. Also, do some research around solicitors’ fees or mediation fees and explore options if you need financial help.
What are the next steps?
Once you have taken the first steps to prepare for divorce, then you will need to move towards action.
In order to keep costs down, most couples will look towards mediation. This is often cheaper than the cost of a solicitor. It can be a safe space to work through how to separate finances and sort out arrangements for any children.
One of you will need to file for divorce and the other will need to respond. It is wise to do this alongside discussions around a financial settlement. This is purely because it takes a long time for your divorce petition to get processed.
Remember: your decree absolute uncouples you but not your finances. So you do need to work out a financial settlement that can be turned into a legally binding court order.
Once you are divorced, make sure to close all joint accounts and credit cards. This will ensure that you are financially separated from each other.
