When people get married, it typically represents the fresh start of a union filled with hope and possibilities. Despite best intentions, one of those possibilities is divorce. Whatever the reasons for dissolving a marriage, it’s never easy for either partner, particularly if children are involved.

However, divorce is a reality that many couples face, and beyond the emotional challenges, you should also consider the monetary implications and take steps to protect yourself. Here are four tips to help you address the potential financial impact of divorce.

1. Gather information and assess your financial situation. Life is hectic and it’s easy to lose track of finances. With an impending divorce, get to know where you stand financially. Conduct an inventory of your banking, investment and credit card statements, and any loans or lines of credit held individually and jointly. If you add up your sources of cash flow, you’ll identify whether your standard of living could change once you’re on your own. As well, creating a net-worth statement that lists your total assets and liabilities may help you see your bigger financial picture. To initiate your own financial journey, close joint accounts whenever practical, and consider obtaining a copy of your credit report. If you’ve co-signed for any debt obligations, ask the lender to revise the loan agreement so each person becomes responsible for their own debt.
   
   
2. Create a framework for dividing assets. Now that you’ve identified assets, devise a fair way to split them. The more agreement you reach without legal intervention, the smoother your divorce proceedings will be. Keep in mind sentimental value in addition to financial, as heirlooms or keepsakes may hold little financial value, but carry special meaning. Of course, the family home is a major asset to discuss. If you wish to stay in the home and have the financial ability to meet all expenses and (if any) mortgage payments, you may buyout your spouse at market value or other agreed-upon price. Alternatively, you could sell the home and split whatever equity you each held. It’s a good time to broach the topic of child support and living arrangements for the kids, so you can reach mutual agreement – legally documented – rather than having it court ordered. For young children, remaining in the family home and their current school could be less disruptive at a time when they need stability.
   
   
3. Update policies and other legal documents. Over the years, the lives of a married couple will intertwine. Regarding workplace benefits plans, you’re likely on each other’s policies for medical and health care. When you divorce, you’ll rely on your own plan and may need to supplement coverage to compensate for any shortfall. For similar reasons, also look at insurance policies you might have and adjust accordingly. As well, you’ll want to change beneficiaries on any policies, plans and accounts where the spouse is designated, including financial accounts and registered plans (e.g., RRSP, RRIF, TFSA). If your will names your spouse as a beneficiary or executor, or if they’ve been granted any powers of attorney, consider how you want to amend your will.
   
   
4. Build your support team. Although this point appears last, it’s actually important to assemble a team of professionals right from the start, to help you navigate the divorce process. This team may include your lawyer, accountant, tax/estate specialist and an Alterna Advisor. Together, they’ll help protect your various rights and interests so you can emerge from the divorce proceedings as financially strong as possible. You’ll likely also want to surround yourself with a network of loved ones to support and guide you, plus it may be useful to consult with a therapist or divorce coach who can help you manage the emotional aspects of divorce. Every divorce is unique, so consider these tips as a potential starting point and then customize your approach to suit your specific goals and circumstances.