March 9, 2018
How to Avoid A Financial Nightmare During Divorce
The fact is, roughly 50% of first-time marriages end in divorce. Regardless of the circumstances, divorce is a painful and stressful experience that can take a toll on your finances. Read on for six tips to help you avoid a financial nightmare during your divorce.
1. Get a Clear Picture of Your Financial Situation
Your financial situation includes everything from your total household income, all investments, and all debts and liabilities. If you were not involved in your family’s finances, now is the time to immerse yourself in the details. Having a clear picture of your financial situation will lay the groundwork for an equitable divorce.
2. Find All Documentation
You will need to show proof of ownership of assets, both jointly and individually owned. Find documentation for everything like bank accounts, investments, cars, property, and other valuables. Determine which items are in your name, your spouse’s, or in both names.
3. Contact Your Certified Financial Planner™
Moving funds or selling off assets by one spouse without the consent of the other is unfortunately a common occurrence. Notifying your CFP® is of utmost importance. Your CFP® should notate your accounts’ limiting transfers and withdrawals. Don’t have a CFP®? Contact your financial advisor, bank manager, or whoever else oversees your financial accounts.
4. Consider All Major Decisions
There are other important decisions that will need to be made that will have significant impact on your finances. Will you sell any property and split the proceeds, or will one of you keep it, paying half to your ex-spouse for their share? Do you need to go back to work after taking a substantial time off? Will you need to make a career change?
5. Don’t Forget About Your Needs
Don’t get caught up in splitting everything, make sure you are getting what you want and need in the process, and think about your life after the divorce. Remember to consider properties, assets, valuables, family heirlooms, and the amount of money that you will need to support yourself.
6. Remember Your Estate Plan
You are more than likely have named your spouse as your power of attorney or named them primary beneficiary. You will want to contact your estate planning attorney to have your documents updated. Also, contact banks and financial institutions to update your beneficiary selections.
In conclusion, divorce ranks as one of the most stressful life events a person can go through. It may be easy to get swept up in settling things quickly, and hastily making decisions regarding alimony, child support and the splitting of assets, without looking 10 or 20 years down the road. This is where consulting with your Certified Financial Planner™ will have big pay-offs. We can help you determine the long-term financial consequences of your divorce settlement, before it’s too late.
Gainplan LLC is a Registered Investment Adviser. This blog is solely for informational purposes and not a solicitation to invest. Advisory services are only offered to clients or prospective clients where Gainplan LLC and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Gainplan LLC unless a client service agreement is in place. Please contact a financial advisory professional before making any investment.