Before You Start Your Divorce - Get Organized

Divorce can become quite complicated financially and legally � particularly when couples have considerable wealth. Do not attempt to negotiate any settlement or agreement until you have obtained all information possible concerning your assets and liabilities and fully understand your rights and obligations. To resolve your financial matters fairly, you and your advisors need your complete financial and legal picture. For the items below, estimate the approximate value of each asset and liability as closely as possible. Indicate how each asset is titled (singly in your name, jointly with spouse, in trust). Be sure to record serial numbers and other means of identification when applicable. Also specify your percentage ownership in assets owned with others. Finally, list liens or encumbrances against each asset to determine the equity to be protected.

Organize and have ready:

  • Deeds and mortgages on real estate.
  • IRA, Keogh, pension, and other retirement plans.
  • Life insurance policies.
  • Last will and testament, codicils, and any testamentary trusts.
  • Prenuptial or postnuptial agreements.
  • Divorce decrees and property agreements.
  • Savings and checking accounts.
  • Wills or trusts where you are a beneficiary or grantor.
  • Ownership interests in any closely held business, including corporate or partnership documents, and financial statements of each business.
  • Notes or evidence of obligations due you.
  • Notes or evidence of obligations you owe others.
  • Tax returns for the past 3 years.
  • Leases.
  • Outstanding major contracts.
  • Inventory of valuable personal assets (antiques, jewelry, art).
  • Titles, registration, and appraisals on any autos, boats, planes, or other vehicles.
  • Lawsuits or evidence concerning contemplated suits against third parties.
  • Lawsuits, judgments, or potential claims against yourself.
  • Malpractice or liability insurance.
  • Applications for credit or loans issued within the prior 5 years.

You will, of course, want the same information on your spouse. If you or your spouse own a business, you will want to review:

  • Corporate books and records if incorporated, or partnership agreements if a partnership.
  • Copies of any notes or loans between yourself and your business.
  • Corporate obligations to which you are a guarantor.
  • Life insurance policies maintained by the company.
  • Financial statements of the business.
  • Tax returns of the business.
  • Make certain every important asset you and/or your spouse own is accounted for.

It is remarkably easy to overlook valuable assets unless you systematically review this asset inventory:

  • Cash on hand.
  • Checking and savings accounts.
  • Cash value of life insurance.
  • Motor vehicles.
  • Residential real estate.
  • Investment real estate.
  • Stocks or bonds in publicly owned corporations.
  • Certificates of deposit.
  • Money-market funds.
  • Stocks or equities in any closed corporations, partnerships, or other business entities.
  • Notes or mortgages receivable.
  • Savings bonds.
  • Accounts receivable.
  • Boats, airplanes, or other recreational vehicles.
  • Options to acquire property.
  • Leases or leasehold interests.
  • Art, jewelry, and antiques.
  • Beneficial interests in trusts.
  • Revocable trusts to which you are a grantor.
  • Licenses or franchise rights.
  • IRA, Keogh, 401(k), or other retirement accounts.
  • Tax refunds due.
  • Causes in action (actual or potential claims against third parties).
  • Inheritances and future interests.
  • Safe-deposit box inventory.
  • Copyrights, trademarks, or patents.

Finally, gather information about your liabilities:

  • Mortgages.
  • Tax liabilities.
  • Notes on car loans.
  • Unsecured loans.
  • Other secured installment loans.
  • Charge account balances.
  • Credit card balances.
  • Alimony or child support from previous marriages.
  • Business debts guaranteed.
  • Other guaranteed debts.
  • Outstanding judgments.
  • Potential or threatened claims.

Compile your records so you fully understand every facet of your finances as well as your spouse's. Finally, project ahead over the next year or two so you anticipate inheritances, other windfalls, or even financial problems that should be factored into the divorce agreement.