It is no surprise that one of the main issues that can cause tension between divorcing couples is money. It is for this very reason that it is extremely important for both parties to be aware of their financial picture during the divorce process. Many times, a husband or wife may wish to bury their head in the sand, refusing to deal with the details of the matrimonial asset pool. This alone can place the individual at a great disadvantage.
Ideally, it is important to be financially aware of the matrimonial finances during the marriage and to be informed of all assets and debts that make up the matrimonial estate. However, it is common for couples to divvy up responsibilities leaving one party responsible for the collective finances of the home. This places one spouse at a disadvantage and when the couple decide to divorce it becomes difficult when all finances must be disclosed and division is necessary. Not to worry however, it is never too late to educate yourself on your finances to assist you during the divorce process.
When you divorce in Hong Kong, one of the first things you must fill out is a Form E. This is a very detailed form where you and your spouse must each disclose all assets at their current value as well as liabilities and ongoing/future expenses. This allows the parties and the Family Court to gain a more in-depth view of the matrimonial pot. Gaining an overview of the matrimonial pot will be exceptionally more difficult if your spouse is not forthcoming about the finances and you are not well-versed in what you and your spouse have in terms of assets and debts.
It is for this very reason that it is important to be financially savvy during the divorce process. Here are a few things to keep in mind so that you are in a better financial position both during and after your divorce:
- Organize, Organize and Organize More: Everyone is talking about organization guru Marie Kondo. Well, it’s time to Marie Kondo your finances and organize all your financial documents so that you know what assets and liabilities you have. To save trees, you can organize financial documents in folders on your computer and keep them in a confidential file that only you have access to. By saving and keeping all key financial documentation on hand, it will be extremely helpful to you and to your solicitor when it comes time to exchange all financial information with your spouse and his/her solicitor. By being organized, the process of providing financial discovery will not be as daunting or overwhelming. I repeat, it is not helpful to dump a suitcase full of unorganized documents at your solicitor’s office. This will only increase your costs owed to your solicitor at the end of the day if they have to sift through everything for you.
- Knowledge is Power: When you are organized, you will have a better understanding of what accounts you have and how much money is owed. In divorce, your financial picture changes drastically and you will need to come to terms with a new normal when it comes to your finances. No longer are you partnered with someone who may be contributing to your monthly income. Thus, if you are educated about your personal finances, you are in a better position to determine a budget for you and your family going forward and create a feasible financial plan post-divorce.
- Keep Your Finances Separate Post-Separation: Once you separate, it may be a good idea to open up your own bank/credit card accounts to keep your finances separate and keep track of what you have and/are spending post-separation. This will also help when the matrimonial pot is being divided and you can easily keep track of expenses if this becomes an issue when discussing spousal maintenance and children’s expenses.
In addition to the assistance your solicitor will be providing you, it might also be helpful for you to consider hiring a professional financial planner. A financial planner can help you organize your finances and assist you in the budget process to create a foundation for a healthy financial picture going forward.
