By JoAnne C. Holt, Divorce financial analyst
In order to get through this overwhelming aspect of divorce it is imperative to break this down into steps.
First Step: Identify all your assets and liabilities.
- Start with the easy stuff (we hope) and make a copy of the most recent bank statements, brokerage statements and retirement plan statements. Please remember all of your accounts, whether marital or non-marital, must be disclosed. Making a copy of the recent statement provides your attorney and financial professional the name of the account, the account number, a picture of the type of activity going through the account (little or a great deal), possibly the title the account is held in (maybe a rental account, joint account or joint with a relative).
- Next pull your life and disability policies, if applicable, and make a copy of the most recent statement and the underlying policy. From these documents we can usually identify very important information such as the type of policy, whole life or term, the annual premium, the cash value, if any, the account number, the insured, the owner, the beneficiary.
- Make a copy of the title to our vehicles and if they are not paid for and you do not have title, simply make a copy of the lease agreement or loan papers. These papers will show us the date of purchase or lease, mileage at time of acquisition, vehicle make and model, down payments, monthly payments, term and much more.
Second Step: Identify pre-marital personal property that has sentimental and/or financial value and make a list of who owns what and where it came from. If you have letters to support your claim, make a copy. Do NOT get bogged down in minutia. If you had a patio table and chairs before marriage and during the marriage you bought new cushions and spent a $1,000– do you really want to say the cushions are marital and table and chairs not? Clearly one without the other is impractical. Stay rational, even if you think or know the other party is irrational. Someone has to stay focused.
Third Step: Identify all business interests and make a copy of the last tax return filed for the business. If you have a sole-proprietorship, simply copy the Schedule C from your individual tax return. There may be a lot more work in this area, but this is a subject that deserves a detailed discussion of its own.
Fourth Step: List all real estate owned, either individually, with another, with your spouse, in your spouse’s name, in a trust name; anything you have an interest in either directly or indirectly. Let your attorney decide what must be included. If there is debt associated with any of these investments try to get a copy of the most recent bill. Many financial institutions will send monthly bills that show the principal balance, the interest rate, the payment, and more.
Fifth Step: List any other assets you can think of: a note receivable (make a copy of the note), a lawsuit settlement in negotiations, a tax refund not yet received, etc.
Sixth Step: Now you need to start copying your credit card statements from last month. It might be a good idea to run a credit report on both you and your spouse to make sure you have identified all credit cards.
Seventh Step: Now list any other debts you can think of: notes payable (make a copy), unpaid taxes for current or prior year, loans due to family members, etc.
This is a very simplistic example and many cases are much more complex. It is intended only to give you a guideline on how to accumulate information. Just take it slow and be as organized as you can!
JoAnne C. Holt is a Florida-based CPA, certified family mediator, and certified divorce financial analyst. She also founded www.standbyhousing.com, an organization that presents alternative housing solutions to fathers going through a divorce. Her columns on finances and divorce run monthly on DadsDivorce.com.