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2 ways to financially prepare for a high-asset divorce

On Behalf of | Apr 27, 2018 | Family Law

If you feel you are nearing the end of your marriage with your spouse and are ready to become single, do not rush to file the divorce papers. Your finances are going to take a hit during the divorce.

Take some time to get your finances in order and create an exit strategy first.

1. Understand how divorce affects your financial situation

Regardless of whether you are a high earner or a stay-at-home parent, divorce is going to have a major impact on your finances. Understanding how they will change can help you better navigate through the divorce process and cause you less stress.

Determining at least a rough estimate of your projected income after the divorce may help you to develop a budget and determine what standard of living you can afford. You might benefit from working with a financial advisor.

2. Not all property, assets and debts are split 50-50

California is one of a few states that require the equal division of marital assets. Exclusions from division often include individually owned assets, such as real estate, accounts, inheritances and items received before marriage. Assets, properties and debts that you and your partner acquired during your marriage are subject to the state’s community property laws.

Many complex and high-asset divorce couples find it challenging to classify some of their assets and debts as joint or individual because they might have used marital funds to secure and maintain them, or because the value of the assets may have increased due to factors during the marriage. Make sure you identify all assets, debts and financial obligations you and your spouse own before you file the papers.

There are many things you need to consider before you bring up the subject of divorce or file papers. Anticipating the possible outcomes for your situation can help you to develop the right strategies to avoid complications in your post-divorce life.