By: Joemar Pasco
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Why You Must Get a Financial Settlement After Divorce
If your marriage is currently “on the rocks” and one of you are contemplating divorce, then there is an important detail that you need to be aware of: financial settlement. The process of financial settlement is the determining factor of who gets what and how much. In the court system, it is referred to as financial proceedings. Many countries around the world allow both partners to make a claim to each other’s financial worth.
Although this is a common divorce practice, it can cause divorces to become very drawn out in court. So if your relationship was happy at the beginning, don’t be surprised if you start to see it become negative and fierce over time. However, if a financial settlement is agreed upon, then you’ll likely not have to worry about going through all of the stress again after already going through a divorce.
There are a few steps that you need to be aware of during the financial settlement so that you’ll receive as much as you deserve.
Right from the very first mention of divorce, you should start to hear alarms go off. This is the moment where you need to start putting all of the finances together and everything that has significant value. These include items that are also in your name only such as your pay, retirement fund, or any vehicles. It would be a good idea to check if your state has a law that governs community property. If it does, then you’ll need to be prepared to give half of everything that the marriage accumulated.
By preparing now, you will have a lot easier time accessing the necessary documents when they are needed. These include tax your most recent tax returns and any and all financial statements from investments and bank accounts. Having these all together will allow the process to be faster and smoother. After you have all of your paperwork in order you’ll need to also know what everything is worth. Also, you’ll need to decide how your finances and debts will be handled.
Keep Your Future in Mind
This is an important step when children are involved because the court will consider their needs first before all else. This could result in an uneven acquisition of the home-based on which partner has been caring for the children the most.
If no children are involved, then only the needs of the parties will be considered. This means you will have to figure out the amount needed for you to survive on.
At this point, you need to create a budget if you don’t already have one. This is a smart idea because you will have to learn to manage with less than what you were used to. So make sure that you add future savings and health insurance into the budget.
Consult a Mediator if Needed
If it appears that you’ll be unable to come up with a financial settlement after divorce, then you might want to consult with a mediator. With a mediator, they will be able to bring in fresh ideas on how to prioritize so that you both can still reach your end goals. A mediator is very experienced with compromising, so they will be able to achieve what is best for both parties.