Inventory of Property
Clearly, one of the most important components of preparing your finances for the divorce isitemizing the assets that you and your spouse have accumulated and properly dividing marital property. Be certain to also include those which either of you may have had prior to the marriage, as any increase in value may be allocated in the divorce. This can be an overwhelming task in and of itself, and so start simply, by making a list of all of your assets: bank accounts, investment accounts, real estate, vehicles, campers, recreational vehicles (including watercraft), time-share memberships, frequent flyer miles, retirement accounts, life insurance with cash surrender value, jewelry, stocks, bonds, collections, personal property (such as furnishings, tools, etc.), annuities, business interests, inheritances or gifts from family members, and rental properties. Make certain to include all assets, whether they are in your name, your spouse’s name, or held jointly.
After you have made a list, then move to the next step of placing a value on each asset. With reference to the bank accounts, investment accounts, and retirement accounts, you can obtain the value by determining the balance in the account by reviewing the statements or contacting the financial institution directly via phone or internet. As to the value of the real estate, you can use tax assessment value as a starting point, but you will most likely want to have an appraisal or a comparative market analysis (CMA) performed during the divorce matter, for a more accurate value. As to vehicles, you can obtain a value from the Kelly Blue Book, or from the NADA books that are available at your library. This information is also available online. As to the valuation of the other assets, make your best estimate, and if necessary, a formal appraisal can be performed. The most important thing is to have a comprehensive listing and a ballpark figure to start with.
One of the most neglected issues relating to finances in a divorce is that of insurance. The most typical insurance policies are: medical, dental, life, homeowners or renters, vehicle, disability and liability umbrella. In some cases, there is also insurance associated with a business entity owned by either you or your spouse. While the divorce is pending, it’s important to make sure that no changes occur to coverage, amount of benefit, or beneficiary of insurance policies. You should obtain information regarding the premiums, coverage terms, who is named owner, and the renewal date, if applicable, of each type of insurance policy.
Although the matter of preparing your finances may seem a bit overwhelming, breaking it down to these five areas makes it more manageable. You will also have the satisfaction of being acquainted and familiar with the financial issues in your divorce case.