Start Ending It – Getting Financially Organized Before Divorce


As a wealth management professional in the great city of Los Angeles, I have sat next to countless divorced spouses facing significant financial challenges during an extremely emotional time. Emotional turmoil clouds decision-making, so my goal here is to provide guidance on some of the groundwork you can do before you get to the more difficult stages of your breakup – filing, negotiations and of course the final settlement.

The financial goals of your divorce should be simple: untie your partnership with the least cost, complexity and collateral damage possible. If we break down the financial aspects of separation to their core, we find that the logical first step is organization. Organizing your thoughts and documentation is essential as you embark on this journey.

What type of divorce do you want?

If you are considering getting divorced, it is important to know that there are several paths you can take these days. To begin with, there are three main types of divorce proceedings:

1. Mediation – this only works if you and your spouse are largely in agreement on all major issues

2. Collaboration – the spouses work with their attorneys to negotiate an out-of-court settlement

3. Litigation – hire your attorney, sign your spouse’s divorce papers, then it’s a litigious run to the courthouse

Although mediation may seem like the most economical choice, if you make a mistake it could cost you more in the long run in terms of support and/or possibly not getting your fair share of assets. Also, if your attempts at mediation fail (the separated parties fail to reach an amicable agreement), you have to start the process again in collaboration or litigation, while the money spent on the mediation process will become a cost. unrecoverable.

“If you think there’s a chance of resolving this outside of court, go the collaborative route. You’ll walk away with so much more money and you probably won’t hate yourself, advises Lauren Greutman, money coach, best-selling author and creator of one of the largest financial resource networks for women. “Only if it is possible of course. If your ex is particularly manipulative or abusive, you’ll be forced to take the more expensive route. Every request, every letter written by your lawyer costs money. When you have an idea of ​​the type of divorce you think you’ll be facing, you can mentally and financially prepare yourself for what’s to come.

Know how much money you need to run your (new) household and where that money comes from

If you don’t have a written budget, create one now. Start by tracking your expenses, either by hand or with software like or QuickBooks. You want to have a good understanding of what it costs to run your household so you can communicate it effectively to your spouse and your attorney during negotiations.

Develop a post-separation budget that is realistic and can be adjusted as life changes. Now is not a bad time to check your credit report, as you may need to apply for a home loan on your own or apply for new credit separately from your spouse.

Make sure you have access to cash and open a bank account in your name only. Once you’ve informed your spouse of your desire to separate, it’s best to start spending money from a separate account from your spouse so that your spending can be more easily tracked. If your future ex starts spending money like the world is ending next week, your lawyers can work to make sure those expenses are deducted from their side of the balance sheet and not something you are ultimately responsible for. .

Inventory your assets and debts – gather all the documentation

Before you jump into a discussion about separation or divorce, it’s extremely important to gather all the documents detailing your assets, debts, compensation, and tax filing history. If your plan is to rely on your spouse to generate this documentation after you file for separation or divorce, you could find yourself in a long and arduous game of “hide and seek” (often referred to as “Finding” in the legal world ) which can have serious financial consequences.

Discovery is the formal process of organizing and exchanging information between divorced spouses and their legal teams. Many people going through a divorce do not have access to some of the relevant documents or, for one reason or another, their spouse does not provide them in a timely manner. Maybe your spouse alone has the login details for some of your accounts – resetting the password might mean an email sent to their email address which you can’t access. It may be easier to get yourself connected to these accounts before telling your spouse that you intend to officially separate. Any documentation you can get before filing for divorce or separation will help you and your legal team during negotiations.*

“[Gathering all the documentation] must take place before the paperwork is filed, because once you have filed for divorce or separation your accounts may be frozen and you are unlikely to be able to take out any new loans unless they are agreed upon, you will not you won’t be able to get around very easily, and it can even be difficult to buy or sell a car,” advises Greutman. A divorced mother of four herself, she has taken this path before and shares her successes through several books she has written and her podcast (which can be found at

“After determining as much of your assets and debts as possible, you need to know what you are legally and financially responsible for and make sure your lawyer immediately drafts a legal separation agreement so that you and your ex play by the same set of rules. . That way, you at least have temporary parenting and financial plans so the divorce process doesn’t break you, especially if you’re the lower-earning spouse.

Moving forward with a separation or divorce is definitely not something to be rushed into, but it is definitely much easier with an organized strategic game plan. A support network of family, friends, legal and financial professionals is also essential. You’ll need a team in place to help you make decisions, minimize the potential financial damage of this process, and put you in the best possible position to start over.

* If you are interested in a phenomenal checklist of documents to gather before you part ways, please contact me at [email protected] for access.

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