A prenuptial agreement is a contract made between two parties who intend to be wed. This agreement outlines many provisions, usually related to finances and property, which the parties want to agree to prior to being married. Such agreements may include: The rights to property owned prior to being married; The right to spousal maintenance or the elimination of spousal maintenance should the marriage end; The characterization of property acquired during the marriage.
Five Steps to Help You Financially Prepare for a Divorce
- Make copies of all financial records.
- Obtain a credit report.
- Get your own accounts.
- Get your debt under control.
- Start a budget.
It’s very important to have an accurate picture of all your assets and debts. You’ll need to know all bank accounts, savings accounts, loan accounts, credit accounts, tax returns, etc. as all of these will need to be divided in your divorce. Having copies made before you actually separate from your spouse will save you the trouble of trying to track records down later.
A credit report is a useful tool in a divorce, it helps you to ascertain all the debts associated with your credit score. If your credit score is tied to your soon to be ex-spouse, a credit report will help to provide a clear picture of your current financial status and will identify any problem areas. It may also potential reveal loans or lines of credit that you did not realize were opened in your name during your marriage.
You will need your own accounts once the divorce is finalized anyway and your own accounts will give you freedom and peace of mind during the pendency of your divorce. In a community property state such as Texas all assets and debts are still considered community property, but having your own account allows you to handle your own bills during the divorce and prevents your soon to be ex from control over your money.
Divorce is an expensive process as it is. Reducing your debt will increase your potential credit line in the wake of a divorce as well as lessen your bills you will be responsible for with only your income after a divorce.
A divorce forces most people to live on one income when they are accustomed to living on two incomes. Establishing a budget will help you live within your means and make the transition from two incomes to one income more manageable. Make sure to be reasonable; you want to live within your means, not incur additional debts during the divorce process.