Undergoing a divorce is a terrible phase. During this emotional turmoil, the last thing anyone needs is added trouble. However, it is quite unfortunate to see many individuals falling into deep financial troubles during the divorce proceedings.
Remember this financial trouble does not end with a huge paycheck being signed. But, it spells trouble to their life, children, and future.
So, being financially sound and astute during the divorce process can help you avoid a financial fallout.
The following are specific strategies laid down by Knoxville divorce attorneys to protect your finances:
Learn how much money you have
Before anything, you should know how much money you have. From in-hand cash to saving bank balance, you should know every penny you own. This includes your 401(K), IRA, any other savings or investment account.
Avoiding this step runs the risk of you unknowingly hiding money. Whilst this may be a genuine mistake, you shall lose credibility during the divorce process. And if you have multiple avenues of income, hire a Knoxville divorce attorney or a forensic accountant. They are professionals and shall work with your best interests in mind.
Get the valuables and other assets valued
Disclosure of all financial investments and valuables is great during a divorce. This helps both the parties know their assets and owings. By getting these valuables and assets valued, you can also gauge your cash flow. This is vital when you are planning the future of yours and your children.
The clarity in the ownership of assets and valuables can save a lot of unnecessary drama in the courtroom. By understanding each other’s entitlement, logic shall win against emotions.
Separate the bank accounts
One of the first steps you need to do is to open a separate bank account. Then, inform your spouse before transferring half of your joint account funds to the newer one.
This shall help you in tracking your money whilst also building an emergency fund. Consult with a few Knoxville divorce lawyers and have a fair estimate of the attorney fees. Only when you have sufficient funds for the fees and at least three months, file for a divorce.
Divorce proceedings are lengthy, so have some liquid assets to bank on. Also, get all the financial statements on which you have signed from the bank. They will further your credibility during the divorce process
Split debts and monitor your credit reports
Having joint credit while filing a divorce is a bad move, yet, committed by many. Pay all the joint credit and close the accounts as soon as possible. If not, there are chances of your spouse’s action affecting your credit score.
Remember creditors or banks do not care about your divorce. You are still liable to them, so split the debts and pay them. Attorneys in Knoxville Tn stress the importance of moving into divorce proceedings without debt.
Also, grab a copy of your credit report and scrutinize it with a fine-toothed comb. There might be scenarios where you are liable to a creditor without your knowledge. With a Knoxville divorce attorney to help, talk with the creditors and get your name cleared off the accounts.
Future-proof the tax game
Not all assets are taxed and if they are, chances are there for unequal taxation. While splitting assets, know the tax burden on each of them to ensure a fair split.
For example, A spouse receives 100,000 $ in Roth IRA and the other receives 100,000 $ in a checking account.
The value of the assets may be the same but after taxation, the latter shall have to cough up a substantial amount in taxes.
The concept of alimony is thrown around casually during the time of divorce. But, understand that it is a taxable income. Any mention of alimony in the final divorce decree can see money flowing to Uncle Sam.
From assets to the language used in the agreement, you should ensure there is an equal split post-taxes. This is one of the important details to know before moving into a divorce trial.
Hire a divorce attorney
All the aforesaid steps are crucial to secure your finances during the divorce process. While each step looks simple and DIY-like, it is not. With the number of emotions gushing you, these steps are irksome and shall exhaust you.
This might affect you in multiple ways like losing a crucial negotiation, settling for less, or even concealing an asset. None of these are in your favor and shall only deter your financial condition.
If there is one solution to all these, it is to hire a Knoxville divorce attorney. He/she comes with years of experience in negotiation and protecting one’s interests during divorce. They shall help you from filing paperwork to negotiating the splitting of assets.
No matter how well-informed and logical a party to the divorce is, he/she can never compensate for a professional attorney.
Always remember the divorce process is a life-altering change. If it goes downhill at any point, recouping can be a struggle. Hence, invest in a quality divorce attorney and secure your financial position.
If you are looking for divorce lawyers in Knoxville, the best is waiting for you. Volunteer Law firm — the ideal mixture of old-fashioned work ethics and today’s speed. With years of experience in legal representation, your best interests are their priority.
So, contact them here and build a secure financial future.