“Divorce is probably of nearly the same date as marriage. I believe, however, that marriage is some weeks the more ancient.”– Voltaire
Divorce, an unanticipated event in a person’s life, has a significant financial impact on everyone concerned. What should be done if marital counselors are unable to persuade the husband and wife to reconcile? Many people prefer a mutual-consent divorce to start again.
In a mutual divorce, the husband and wife agree on conditions for their financial separation that are agreeable to both. They control the method and features of the settlement. A divorce settlement may or may not include any assets or money. The partners just need to confirm the agreement in court.
Mutual /Amicable Divorce
Divorce by Mutual Consent, also known as Mutual Divorce, occurs when both husband and wife mutually agree that they can no longer live together and that the best solution is Divorce. They would file a Mutual Divorce petition jointly before the honorable court, without making any allegations against each other.
Discuss Finances for Divorce Settlement
Financial issues should not be mixed up with the emotional aspects of divorce. Understand your cash flow as a first step, even before discussing the financial elements.
“Once you have decided to go for divorce, start preparing your household budget based on monthly income and expenses, including on child care and debt servicing,” says Punit Gupta, Fullerton Securities and Wealth Advisors.
Sit across the table with your spouse and go over all of your money and assets. Liabilities should also be evaluated. Existing loans should be reviewed and decisions made based on the contributions made by each. This is because a choice must be made as to whether one individual is prepared to transfer the loan into his/her name or whether the asset is to be sold and the proceeds shared.
Divorce settlement agreement
The divorce settlement agreement is to be prepared at the request of both parties who wish to terminate their marriage amicably. The divorce settlement agreement to be effective should contain all possible points of settlement on various issues between the spouses so that their separation process is completed smoothly and the remaining issues are determined very clearly for the smooth running of their respective lives after the divorce settlement agreement is enforced.
The agreement will begin by listing the parties involved, the dates of their marriage and separation, and the dates when divorce papers were filed and replied to. If the parties have children, the names (or initials) and ages of the children will be included. It will also state why the parties are divorcing and how they want to settle their divorce. It will then detail the agreements of the parties in all relevant categories. It is in the best interests of all parties to be as detailed as possible. Finally, both parties will sign and date the agreement.
When a couple has children, things get more complex. Because, in such a scenario, the settlement’s goal is to defend their interests. Regardless of who has custody of the children, parents would ideally want to make arrangements for their well-being. Spouses can agree on a single sum or phased payment to the person who will have custody of the kid at various phases of his/her scholastic life or a monthly amount with gradual increases to account for growing living costs.
Consider the investments previously made for children’s education, health care, and other costs while preparing for this. If the parent who will care for the children need financial assistance, be sure the agreement specifies how the expenditures will be split.
Put everything in black and white once you’ve agreed on how to divide assets, obligations, and parenting duties. When filing for divorce, you must notify the court of the settlement.
If you decide to share any obligation or asset in the future, the agreement should specify it in full, ideally with remedies if one partner breaches the agreement.
Before you can reach an agreement on the financial aspects of your divorce, you must first lay the basis by updating the records of all financial holdings. Keep the invoices of assets in your name. If you don’t have the originals, save photocopies of bills of assets owned jointly.
Future finance planning
Your financial future should not be harmed as a result of marital conflict. You must take efforts to remedy any financial damage it may have caused.
If you must pay alimony or cover the costs of your children, you should prioritize these expenses and begin preparing for them right once. Opening a separate account and setting up an automated debit from your savings account might be a smart choice. This will prevent you from becoming behind on alimony or child support payments, which might lead to legal action.
Also, if you have a will, don’t forget to alter it. Also, if your spouse was the nominee on your insurance policies, savings accounts, provident fund, and so on, you should request a change.
Hire a lawyer for legal concerns and a financial advisor for money purposes. Always keep in mind that a professional can always get you a better deal. As a result, do not be afraid of the high costs they may levy. Before taking any action, such as publishing a statement, moving out of the residence, making a financial choice, etc., contact your lawyer and financial planner.