Divorce Planning Financial Checklist

Living Arrangements

If you and your spouse don’t want to live together during the divorce process, you may need to agree on alternate living arrangements in which one spouse moves out of the family home. Be sure to budget for this part of the divorce process, especially if you will be living in separate homes for a while before the divorce is finalized.

If you have children, keep in mind that moving out of the family home can impact custody arrangements. For example, in Maryland, courts consider factors like who is the primary caregiver for a child and which parent lives closest to a child’s school when deciding custody arrangements. While these aren’t the only factors considered, they do impact the court’s decisions.9 Talk to your attorney before moving out of the family home to ensure that your decision won’t impact other parts of the divorce process.

Child Custody and Support

If you have children, then the divorce process will involve decisions about custody and child support. Two kinds of custody will be decided during the divorce process:

• Physical custody: Where a child lives and which parent they live with, sometimes referred to as “parenting time”


• Legal custody: Who is involved in long-term planning and significant decisions related to a child

There is no one-size-fits-all custody arrangement, and like other aspects of a divorce, the process can vary from state to state. Multiple factors are taken into consideration when making custody and support plans, including:

• Who is the primary caregiver


• Psychological and physical fitness for caregiving responsibilities


• Character and reputation


• Ability to maintain family relationships


• Financial resources


• Length of separation


• Any prior abandonment or surrender of custody

The preferences of children and parents are also taken into consideration. If both you and your spouse want to share custody equally, you will be able to talk with your lawyers to create an arrangement that works. You will also have to come up with a plan for schooling, holidays, and weekends that fits with the rest of your custody plan.

If you are worried that shared custody is not in the best interest of your child or children, mention that to your divorce attorney early on in the process of working together. They will be able to advise you on steps to take to protect the well-being of your child or children.

Assets and Property Division

Part of divorce is dividing up your assets, both physical and financial. These can include:

• Real estate


• Vehicles


• Furniture and other household items


• Banking and investment accounts


• Valuable property such as art or jewelry

You will need to create a list of all your assets and their value to begin the process of property division. If you have a prenuptial or postnuptial agreement, this will guide how you divide your property. Otherwise, you’ll have to work within your state laws.

Nine states in the U.S. are community property states, meaning that couples are required to equally split all assets that were acquired during their marriage. However, debts and assets acquired before the marriage are not considered community property and belong to the spouse who originally owned or owed them. The community property states are:10

• Arizona


• California


• Idaho


• Louisiana


• Nevada


• New Mexico


• Texas


• Washington


• Wisconsin

However, most states are common law property states, which means assets purchased during a marriage are owned by one spouse unless both names are on the title or it was bought from a joint account. Debts also belong to the person whose name they are in, not to both spouses.

Common law property states follow the principle of equitable distribution during divorce proceedings. This is different from equal distribution. Equitable distribution tries to create a fair distribution of assets by looking at a variety of factors, including:11

• The length of the marriage


• Each spouse’s financial and practical needs


• Financial contributions made during the marriage


• Other, nonfinancial contributions made during the marriage


• Custody arrangements for children

If you and your spouse are willing and in agreement, you aren’t required to have a third party help you divide up your assets. However, you should work with a financial advisor and divorce attorney to ensure that the property division is fair to both parties.

Financial Management

Throughout the process of divorcing, you will need to have a variety of legal documents and paperwork on hand. Organizing this paperwork, including your financial information, will help the process go more smoothly. It will also help you protect your property and assets because you will know exactly what is being discussed at every point.

Collect and make copies of:

• Marriage paperwork: Marriage license, as well as any prenuptial or postnuptial agreements


• Tax returns: Federal, state, and local tax documents for at least the past five years (including your spouse’s if you file separate returns)


• Real estate: Deeds, mortgage documents, appraisal information, property tax information, cost basis of the home, contracts/invoices for major renovations, and any rental property records


• Vehicle information: Deeds for cars, boats, or other vehicles


• End-of-life plans: Wills, power of attorney, and advance healthcare directives


• Business documents: Any receipts, tax paperwork, and payroll information; registrations, trademarks, or patents owned by one or both spouses


• Financial statements: Banking, investment, and retirement accounts, as well as any Health Savings Accounts or flexible spending accounts


• Debts: Records for home, auto, student, and personal loans, as well as credit card statements


• Insurance: Records for life, auto, homeowners, personal liability, or other insurance


• Valuable personal property: Receipts for major purchases or previous appraisals for art, jewelry, and other heirlooms

If you are worried that your divorce will be contentious or your spouse may attempt to hide assets, gather these documents and make copies before initiating the divorce process.

You will also want to change the passwords on your bank, retirement, email, social media, and other accounts. This will help keep both personal communications and communication with your attorney and any other advisors private throughout the divorce. In the case of a contentious divorce, it also helps prevent your spouse from locking you out of your personal accounts if they know or can guess your passwords.

Credit Scores and Debt

Filing for divorce doesn’t directly impact your credit score. However, if you have late or missed payments because you are distracted by divorce proceedings, have trouble accessing your accounts, or put more expenses on a credit card than usual due to the cost of the divorce, your credit score can take a hit.

To protect your credit during a divorce:

• Set reminders: Create alerts or calendar reminders to make payments on time.


• Pay something: Make at least the minimum payment on all debts, even if you are unable to pay a bill in full.


• Open new accounts: Remove yourself from joint accounts and open new accounts in your name only to prevent lenders from coming after you for your spouse’s debts.


• Buy identity theft protection: Divorce can make you a target for scammers, including your ex.