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Planning for divorce by learning about finances

On Behalf of | May 28, 2019 | Divorce

When women in Arizona decide to divorce, they may need to take special care to protect their finances. While the overall role of women in household finances has changed significantly over the years, many wives still know less than their husbands about the state of household finances, the scope of family assets or the investments that they hold. When 40 to 50% of marriages end in divorce, it is particularly important that women remain aware of their collective finances in order to protect themselves financially in the event of a divorce.

There are some key documents that can help people make decisions about filing for divorce and negotiating a settlement. These include annual tax returns, statements of net worth and lifestyle analyses. Unfortunately, many wives sign off each year on the family tax returns without fully understanding the information contained therein. These documents, including 1099, W-2 and K-1 forms, can provide detailed information about each spouse’s income from employment as well as investment income, capital gains and business income. Tax returns can be particularly important when a family business is involved.

A lifestyle analysis is another tool that can help people to better understand their finances. There are online systems that can help people gather the information they need, including tracking ongoing monthly spending. Three years of back credit card and bank statements can produce a comprehensive overview. This kind of information can also contribute to a financial affidavit of marital net worth, including liabilities and assets owned by the couple.

Even after the emotional and practical issues associated with the end of a marriage are sorted out, the financial effects can linger on. A family law attorney may help individuals seeking divorce to understand their finances and advocate for a fair resolution on property division, spousal support and related issues.

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