Money is a major factor often considered when getting divorced, and for good reason.
Getting divorced is complicated—while also both emotionally and financially taxing—for each spouse. Steps must be taken individually to secure your financial future. All the way from before a divorce is filed, during the divorce process, until it is finalized, and you continue in your financial goals as a single person.
When Handling Finances For The First Time
Often in a marriage one person primary handles the finances. This can put the other spouse in a challenging situation, and with a lot to learn in a short amount of time, when surviving divorce.
It may be that you do not know how much money your ex-spouse truly earns, or if you have enough saved for retirement. Or, even if you do have retirement savings, whether you have the right allocation, in addition to enough in the funds to follow your current retirement goals. Insurance is another factor— health insurance, long-term care or life insurance.
The previously-dependent spouse needs a strong financial advocate to help them to to navigate their new financial picture – which can seem entirely daunting.
Alimony, Child Support, And Remarriage
When couples divorce, one member often must pay alimony to the other. If the couple has children, child support is also paid to the custodial parent. But did you know that while child support is not tax deductible by the payer, alimony is? And, if you were married for 10 years or more, you can claim Social Security spousal benefits based on your ex-spouse’s benefit? But what if you remarry?
These are questions you need to know the answers to in order to ensure you have a firm understanding of your financial picture.
Budgeting For Childrens’ College
If you have children, during divorce negotiations or mediation, you must consider together how to take care of college costs for your children.
Will you each save a certain amount to be applied to tuition? Will one spouse take care of the tuition, or will it be split 50/50? Will children obtain financial aid to pay their own way?
Investment Planning & Updating After Divorce
Your assets will be different after your divorce is finalized. At the conclusion of the divorce, our clients often receive stocks and bonds that their spouse purchased during the marriage, or conversely, no longer own stocks that were previously owned.
As such, it is imperative that you assess and understand exactly what you have and how much you need for the future. You need to update your will, beneficiaries, benefits, and other retirement choices. After all, if you were to pass and haven’t updated your beneficiaries, your estate may transfer to an ex-spouse.
You will likely need to change the way you manage your financed as a single person, as opposed to when you were married. Having a financial advocate and advisor can make all the difference.