How to prepare for a divorce

Deciding how to plan for a divorce can feel overwhelming, especially if it happens suddenly. The following divorce checklist might help you navigate a challenging time and know what to do when getting a divorce.

Discuss the divorce with your spouse

During divorce proceedings, there are many considerations and decisions to make that could affect you and your family members. If you and your spouse feel comfortable, consider having conversations directly to establish common ground and make each other's priorities known. The first topic to address is whether you think it will be a contested or uncontested divorce. If both parties can agree on major issues, like property division, child custody and child support — it could help save time, reduce legal expenses and allow for a less stressful separation. Consider avoiding holidays, birthdays or other important dates when choosing a time to have these conversations.

A contested divorce — usually more expensive and time-consuming — may be unavoidable if one spouse is uncooperative. In these instances, working with a neutral mediator with experience in divorce cases may be beneficial, especially if child custody is involved. The extra cost of a mediator may be worth it if you have concerns about the impact of direct contact with your spouse or feel you won’t be able to represent your interests without a third party present.

Gather important documents

Since there's a significant amount of paperwork involved in divorce proceedings, it’s recommended to have your documents prepared as early as possible for a potentially smoother process. When gathering important documents, go back at least three years. Required documentation typically includes:

• Bank and credit card statements. Gather relevant statements to help provide a clear picture of your financial assets and debts.
• Loan paperwork. Include loan agreements like mortgages, car or student loans, to account for outstanding debts.
• Real estate papers. Collect deeds, mortgage documents and other relevant property records for real estate holdings.
• Retirement account details. Provide statements for retirement accounts, like 401(k)s or IRAs, to assess future financial planning.
• Insurance documents and wills. Collect your life, health, car, property and other owned insurance policies, along with wills, to help protect your assets and future.
• Stocks and bonds. Include statements for investment accounts to detail the portfolio’s value and ownership.
• Tax returns. Supply past tax returns, income verification/paystubs, bonuses and commission to present a full picture of your finances. Disclosing these documents is important to understand income and potential liabilities.
• Home inventory. Create a home inventory list. Take pictures and add notes to show which items specifically belong to you. Additionally, document larger assets such as cars or houses, less tangible property like investments or business interests and items of sentimental value.
• Marriage documents. Have your marriage license handy and prenuptial or postnuptial agreements if either are in place.

Get support

Divorce can be emotionally draining, making it very important to prioritize your well-being throughout the process. Surrounding yourself with a solid support system is among the most crucial steps you can take. Lean on friends or family members who can provide a listening ear without judgment, as they can offer much-needed emotional support during this time. It’s also beneficial to stay active, whether through exercise, yoga or even taking walks outside — physical activity can help reduce stress, keep your body healthy and your mind clear. Maintaining social connections may help counter feelings of isolation, so try to make time for hobbies, group activities or have coffee with friends. Building and relying on a community can help you stay resilient, fostering emotional and physical strength as you navigate the complexities of divorce.

Understand divorce laws

Educating yourself about your state's divorce laws is another helpful step in navigating the divorce process. Each state has different requirements for filing, as well as specific rules about how property is divided and what kind of spousal or child support may be owed. Become familiar with these laws so you have a foundational understanding of what to expect. This can help save you significant time and money when working with lawyers. Many states follow an "equitable distribution" model for dividing property. This means assets may not always be split 50/50, but in a way the court deems fair. Understanding these laws early can allow you to set realistic expectations and possibly streamline the settlement process.

Consider getting a lawyer

Whether you plan to go to court or mediate, you may want to find a reputable divorce lawyer to help you through the process. Divorce involves several contracts, and a lawyer’s legal expertise could be helpful. If your spouse has already involved an attorney, consider getting one of your own to have someone who can properly support you throughout the process.

Even if you hire a lawyer, consider doing a bit of your own legal research to know your rights. It could benefit you to have a basic understanding of the process from a bird’s eye view when making these big decisions. Each state has its own regulations, so reference information relevant to where you are.

Sort out living arrangements

You may need to decide whether you and your spouse can continue cohabitating for the time being, or if one of you will need to move to a new home or temporarily stay with friends or family while you work through the divorce. If you choose to cohabitate, confirm that your spouse agrees to the situation. If applicable, remember to factor in where your children will stay in the meantime. If you decide to move into a new home, try to look for places where you limit spending to 28% of your income. This is based on the 28/36 rule lenders use to determine a person’s financial sustainability and used as a benchmark to help avoid overspending.

Children and divorce

• Determine who will retain custody. You and your spouse can decide how to split custody or assign sole custody. If you can’t agree, the court will assess the situation and assign custody based on whatever is deemed to be in the child’s interest.
• Pay child support. The court may decide who, if anyone, pays child support based on a variety of factors like the amount of custody time and each parent’s Income and Expense Declaration.
• Establish visitation rights. If one parent is awarded sole physical custody, decisions might be made to determine how often and for how long the other parent will be legally allowed to visit with the child.
• Consider the children’s rights. In some cases, children of a certain age can request which parent they want to live with or how long they want to live with each.

Plan for children's financial needs

While you tend to your children's emotional needs and create a plan to act as co-parents, also focus on what you can do to help lessen the financial impact of divorce and deliver quality care for your children. Here are some things to consider:

• Create a plan for child-related expenses. Details should cover what is included in child support and who will be responsible for tuition, insurance, medical bills, childcare, activities and clothing.
• Outline what to do about unexpected expenses. Take the time to create a financial emergency plan determining which parent will pay and how either side will be reimbursed should something arise.
• Review the divorce’s impact on taxes. One person will claim “head of household” versus “single” which can help reduce tax liability. Know this status can alternate between each parent if it’s decided to split the benefit.
• Plan for children’s insurance and benefits. You may need to change the beneficiary designations on life insurance policies or adjust coverage amounts based on your financial situation.
• Continue to save for college. Discuss what will become of your children’s college savings plans and joint bank accounts between parent and child.
• Establish a routine to help create stability. Regularly communicate with your ex or soon-to-be ex about finances related to your children and develop a process to maintain a status quo.
• Be open to adjustments for your children. Financial needs may evolve with time. Discuss changes and work together to amend the divorce agreement if necessary.

Finances and divorce

It’s important to address your finances early to help set up a stable life after divorce. Typically, household income and wealth for divorced couples drop significantly for both parties.

• Evaluate your accounts. Close joint accounts, change direct deposit information and adjust beneficiaries on retirement accounts, life insurance and legal documents.
• Protect your information. Change your passwords for bank, social media and email accounts. Remove your name from shared accounts and open new accounts solely in your name.
• Receive important documents. Consider using an alternate mailing address or P.O. Box for important documents from your lawyer or regarding finances you don’t want your ex to gain access to.
• Create a new budget. Review all sources of income and make a detailed list of expenses to see where you stand financially post-divorce, and then adjust spending as needed.
• Determine who pays existing bills. Creditors need continual payment so neither party’s credit is affected. For future purchases, obtain credit solely in your name so you aren’t tied to your former partner.
• Rethink health insurance. Consider writing health insurance provisions into the divorce settlement and switching to an employer’s plan. COBRA plans can be a short-term option, but remember they can be expensive.
• Create new goals. Think long-term and short-term, and develop goals like building an emergency fund, paying off debt, saving for college or buying a new property.
• Consider a financial advisor. A financial advisor can help provide a smoother transition, provide insight into your financial standing and give you a roadmap for your goals.

Take care of yourself and your children

Divorce can bring significant stress to you and your loved ones. During this complex time, it might be helpful to pay extra attention to taking care of yourself, allow yourself to grieve and consider seeking medical support if needed. If you’re feeling emotionally distressed, remember that you’re not alone and there are resources available, such as mental health hotlines, therapists and support groups. If you have children, balancing your emotions while caring for them can be challenging, but open communication can help make a big difference. Let your children know their feelings are valid and try to listen to them without imposing expectations on how they should feel or which parent they should support. Ultimately, as their parent, you know what’s right for them, so trust your instincts and provide them with love and understanding.

If you have questions about what your divorce means for your insurance policies with State Farm®, speak with your State Farm agent to discuss options.