Financial planning for divorce is one of the most important — and most overlooked — aspects of navigating a California dissolution. Beyond the legal proceedings themselves, understanding how to budget for the divorce process, plan for post-divorce living costs, and protect your financial position helps ensure you emerge from divorce on a sound footing.
Divorce Financial Planning — Before You File
Divorce financial planning should begin before the petition is filed. Gather copies of all financial documents: tax returns for the last three to five years, bank and investment account statements, retirement account statements, credit card statements, mortgage documents, vehicle titles, and business records. Once the divorce is filed, California's automatic temporary restraining orders (ATROs) freeze the financial status quo — having documentation before that point gives you a complete baseline.
Budgeting for Divorce
Budgeting for divorce requires accounting for both the cost of the legal proceedings and the cost of establishing a separate household. Legal fees for contested divorce in California range from $15,000 to $100,000 or more depending on complexity. Uncontested divorces with full agreements cost significantly less. Beyond attorney fees, budget for court filing fees, process server fees, and potentially the cost of financial experts, vocational evaluators, or custody evaluators if those are needed.
Cost of Living After Divorce
The cost of living after divorce is often higher than during marriage because two people are now maintaining two separate households on income that previously supported one. Financial planning for divorce should project post-divorce monthly expenses: housing (rent or mortgage), utilities, insurance, food, transportation, childcare, and debt service. This projection is critical for spousal support negotiations — both the amount and duration of support should reflect the actual post-divorce financial reality of each party.
Protecting Your Credit During Divorce
Joint credit accounts remain the responsibility of both account holders regardless of what a divorce decree says. If the decree assigns a joint debt to your spouse and they fail to pay, the creditor can still pursue you. Divorce financial planning should include closing or separating joint accounts as soon as possible, monitoring your credit during the proceedings, and ensuring that joint debts assigned to the other spouse are refinanced in their name only — or secured by indemnification provisions in the settlement agreement.
Furubotten Law, APC advises clients on the financial dimensions of divorce throughout Orange County and Riverside County. Call (714) 795-3862 for a complimentary case evaluation.