4 Financial Moves to Make Before Filing for Divorce 

Divorce can be a difficult, emotional, and overwhelming process, especially when it comes to protecting your financial future. As a high-earning woman, the stakes are even higher. You’ve worked hard for your success, and the thought of navigating a divorce while ensuring your assets are protected can feel daunting. But with the right preparation, you can take control of your financial destiny and enter this new chapter with confidence. 

In this post, we’ll walk you through four crucial financial moves to make before filing for divorce. These steps will help ensure you’re financially secure and ready for independence, so you can face the future with peace of mind.

1. Understand and Manage Your Current Financial Situation 

Before making any decisions, it’s essential to have a clear understanding of your current financial situation. This includes both your assets and liabilities, as well as any ongoing financial obligations. 

Key steps: 

• Create a Detailed Financial Inventory: List all your assets, including real estate, savings, investments, and retirement accounts. Also, include any debts such as mortgages, credit card balances, and loans. 

• Assess Your Income and Expenses: Track your monthly income, including salary, business income, dividends, and any other sources. Then, record your monthly expenses—both fixed and variable. 

• Gather Key Documents: Collect tax returns, bank statements, pay stubs, property deeds, and any other relevant financial documents that show your financial standing. 

Knowing where you stand financially will give you a clearer picture of what’s at stake and allow you to make informed decisions about your next steps. 

During marriage, it’s common to share finances with your spouse. However, before filing for divorce, it’s crucial to start managing your finances to prevent any complications down the road. 

Key steps: 

• Open Separate Bank Accounts: If you haven’t already, open individual accounts for yourself. This includes checking, savings, and credit cards in your name alone. 

• Establish Your Own Credit: Ensure you have your own credit cards or lines of credit. This will help you maintain a good credit score and establish financial independence. 

• Separate Assets: Avoid transferring assets to friends or family members as a way to hide them. Not only is this unethical, but it can also be considered fraud during the divorce proceedings. 

Starting the process of financial separation early can prevent disputes later and give you more control over your financial future. 

2. Consider Hiring a Forensic Accountant 

In high-net-worth divorces, it’s common for one spouse to hide assets, or for complex financial arrangements to make the division of assets more challenging. A forensic accountant can be a valuable asset in this situation. 

Key benefits: 

• Uncover Hidden Assets: A forensic accountant can help track down assets that your spouse may be hiding, such as offshore accounts, investments, or business interests. 

• Evaluate Business Valuation: If you or your spouse own a business, it’s crucial to get a professional valuation. This will ensure you receive a fair share of its value. 

• Analyze Tax Implications: A forensic accountant can also help you understand the tax consequences of asset division and spousal support obligations. 

Hiring a forensic accountant is an investment in your financial security, ensuring that all assets are accounted for and valued accurately. 

3. Understand the Tax Implications of Divorce 

Divorce comes with significant tax consequences that many women overlook until it's too late. It's important to understand how your taxes will be impacted by the decisions you make during the divorce process. 

Key considerations: 

• Filing Status: Your tax filing status will change after divorce. This could have implications on your tax bracket and deductions. Speak with a tax professional to determine the best strategy for your impending new status. 

• Alimony and Child Support: Alimony may be taxable income to the recipient and deductible for the payer. However, tax laws change, so ensure you fully understand the impact before negotiating. 

• Asset Division: Certain assets, such as retirement accounts or stocks, may be subject to taxes upon division. You’ll want to carefully consider the timing of asset transfers to minimize tax consequences. 

By understanding these financial and tax implications, you can make more informed decisions during your divorce proceedings and avoid unexpected financial burdens. 

4. Plan for Your Financial Independence 

One of the most empowering steps you can take before divorce is to prepare for your financial independence. Whether you’ve been the primary breadwinner or your financial situation has been more reliant on your spouse’s income, it’s vital to create a plan for how you will support yourself after the divorce. 

Key steps: 

• Evaluate Your Income Needs: Determine how much money you’ll need to maintain your lifestyle post-divorce. This includes housing, child support, healthcare, and any other ongoing expenses. 

• Develop a Financial Plan: Work with a financial planner to create a post-divorce budget and plan for your financial future. This may include saving for retirement, investing, and planning for future expenses like education or healthcare. 

• Consider Career Advancement: If you plan to increase your income after the divorce, you may want to invest in career coaching or additional education to help you achieve your goals. 

Financial independence is the key to securing your future, and planning ahead will set you up for success after divorce. 

Conclusion 

Divorce is a major life transition, and preparing for it financially is one of the most important steps you can take. By understanding your finances, separating your assets, hiring a forensic accountant, considering tax implications, and planning for your independence, you’ll be in a much stronger position to navigate the divorce process with confidence and clarity. 

Taking these four financial steps before filing for divorce will help ensure that your financial future remains secure and independent.

If you need personalized advice or help preparing for your divorce, book a case review with our experienced team today. We’re here to support you every step of the way.

Our team of experienced divorce attorneys is ready to help you navigate the divorce process with confidence and clarity. We’ll provide personalized advice to ensure your financial future remains secure.

For additional insights, don't forget to grab our free ebook, The Executive Strategies: Mediation vs. Litigation – Your Guide to a Smooth Divorce Process. Let us guide you through your next steps with clarity and confidence.