Securing Your Financial Foundation During Divorce
The first step in any divorce case is achieving total transparency regarding the marital finances. This checklist guides you through the process of gathering and securing critical documents to ensure you are fully prepared for negotiation, mediation, or litigation.
Phase 1: Immediate Actions (Protecting Your Credit and Cash)
These steps should be taken as soon as possible to prevent financial damage or asset dissipation.
- Secure Cash and Credit: Change the passwords and PINs for all individual bank accounts, brokerage accounts, and investment accounts.
- Establish a Clean Slate: Open a new checking and savings account in your name only.
- Gather Current Statements: Obtain all recent statements (last 12 months) for joint bank accounts and credit cards.
- Mitigate Debt Risk: Close or freeze joint credit cards if possible, or reduce the limit to prevent excessive spending by the other party.
- Obtain a Credit Report: Pull your personal credit report from all three major bureaus (Experian, Equifax, TransUnion). This ensures you identify all outstanding joint debts that must be addressed in the settlement.
- Update Mail: Ensure important financial statements, especially those related to retirement or investment accounts in your name, are only being mailed to a secure address you control.
Phase 2: Comprehensive Document Collection
Gather and organize these essential financial documents into a secure digital and physical file. You generally need records covering the last three to five years.
Income and Tax Records
- Federal and State Tax Returns (including all schedules).
- Pay stubs, W-2s, 1099s, and bonus statements for income verification.
Assets and Investments
- Bank Accounts: Statements for all checking, savings, and money market accounts.
- Investment Accounts: Statements for brokerage accounts, mutual funds, stocks, and crypto wallets.
- Retirement Accounts: Statements for $\text{401(k)}$s, IRAs, pensions, and annuity contracts.
- Insurance Policies: Life insurance (declaration pages and cash value statements) and health insurance details.
Real Estate and Property
- Deeds, current mortgage statements, and recent appraisal or valuation reports for all properties (marital home, investment properties, vacation homes).
Phase 3: Valuing Complex Assets
These items require professional valuation and often lead to critical mistakes if ignored.
- Business Interests: If either party owns a business, obtain the last three years of profit and loss statements, balance sheets, and tax returns for the business entity. Mistake to Avoid: Never accept a simple estimate; a formal valuation by a forensic accountant is necessary.
- Personal Property Valuables: Gather appraisals and receipts for jewelry, art, antiques, and collections exceeding a value of $\text{\$5,000}$.
- Stock Options/RSUs: Obtain grant agreements and vesting schedules for any stock options, Restricted Stock Units (RSUs), or Deferred Compensation received during the marriage.
Phase 4: Liabilities and Debts
Ensure every single liability is accounted for to prevent being pursued for your ex-spouse's debt post-divorce.
- Credit Cards: List all account numbers, balances, and recent statements for both individual and joint cards.
- Loans: Document all personal loans, student loans, car loans, and lines of credit. Clearly note whether the debt is in one party's name or jointly held.
- Mortgages/HELOCs: Full statements for all home equity lines of credit (HELOCs) and mortgages.
"Your financial protection hinges on the completeness and accuracy of this checklist. Do not proceed with any settlement discussion until every item on this list has been secured and reviewed."
