Most families in Colorado have filed their tax returns by this time of year. Some of those families may be dealing with divorce proceedings and taking extra time to ensure that their finances are in order. Asset valuation is just one item that needs to be managed during mediation, but it is important to be deliberate and thorough.
Financial experts remind spouses who are divorcing that their money will need to be stretched a bit further, since not only are assets and property being divided, but they will have to fund two households instead of one. It may be a good idea for each spouse to collect copies of financial papers, such as bank statements. Opening separate bank accounts and credit cards will also be beneficial. This is also a good time to become educated on Colorado’s laws surrounding property and asset division.
While those are excellent suggestions for handling the parameters of divorce as it is happening, it is important that spouses also look to the future. If there are children in the relationship, it may be a good idea to think of how their college expenses and other potential future costs will be covered. Creating a new budget will be an effective way to manage one’s finances properly. Spouses will also want to examine their insurance plans, retirement funds, pensions and even their wills to determine if anything needs to be altered.
Tax season is stressful enough — a divorce at this time should be cause for all parties involved to be attentive to the process of asset valuation. Families here in Colorado who find themselves in this situation might want to take extra time to ensure everything is properly handled. The most important point is that spouses who decide they no longer wish to be married must work together to decide what will be best for everyone’s needs.
Source: CNN Money, “Don’t let divorce wreck your finances”, Karen Cheney, April 4, 2014