When you are considering divorce, the first financial task is to compile your net worth statement. This is true whether you believe you are going to have a friendly or acrimonious divorce. You should really be compiling and reviewing your net worth statement quarterly even when you are happily married.
I have found that many couples do not understand their financial situation until they are in a divorce. Those who have chosen the preferred dispute resolution of collaborative divorce learn about their assets and liabilities at the beginning of the divorce. In collaborative divorces, a neutral financial professional (that would be my role) compiles the net worth statement and reviews it with the couple and their attorneys. We don’t play hide the ball in collaborative divorce cases.
If you are not going to use the preferred divorce method, but instead are going to have a litigated divorce and you are not the spouse who keeps track of your financial details, you are more likely to going to have a difficult time getting your arms around the true financial situation.
It is crucial to truly understand your financial situation during a divorce because it drives your short-term and long-term financial decisions.