When thinking about finances during the divorce process, it is important to stay focused on the details. Here are seven tips for protecting your financial future during divorce.
- Monitor Joint Accounts
Ensure that you have all account information for your joint bank accounts and credit card accounts. Make sure to monitor these accounts for any unauthorized or large withdrawals and consider opening a new account in your name alone once you have discussed the matter with an attorney.
- Update beneficiaries
This is easier than it sounds. If you have received a Final Judgment of Divorce, your your ex-spouse may appear as beneficiary in many places unless you have taken the appropriate steps to remove them. Make sure to check retirement accounts, insurance policies and your employee benefit package. Additionally, you should change your will and any other documents related to end of life. Make sure that any and all changes to these accounts are in accordance with the terms of your signed Property Settlement Agreement.
- Set up a budget
Divorce is expensive and your overall expenses are likely to increase significantly as you transition from one to two households. It is critical that you create a budget that covers all your ongoing costs and that creates short and long term savings. Sometimes this will involve changing your spending habits to adapt to your new life.
- Assess your assets and liabilities
List all the property owned by you and your spouse in terms of dollar value including all of your financial assets as well. Then list all you liabilities including car loans, mortgage, credit card, estimated tax payments and any other debit. Make sure you list all the items that you need included in the divorce settlement. Be thorough and do not rush the process because omitting something here could be very costly. If you have questions about whether an asset should be included, make sure to address it with your attorney.
- Get help with you taxes
Make sure that you understand the tax implications of your divorce and consult with a financial advisor. Develop an accurate picture for how much is going to be need at tax time. Cash can be tight during and after divorce. Don’t get caught short by owing money to the IRS at tax time.
- Inform yourself on Insurance
Do you understand how will your health care be impacted upon your divorce? What about your car insurance? These are legitimate concerns which you will need to address moving forward. Begin to collect information on of all your policies including auto, property, home owners and life. Make sure you protect you and your children going forward.
- Choose a divorce process that keeps you out of court
Battling you divorce in court not only is very expensive, it also has a long emotional cost on both you and your loved ones. Less confrontational approaches to divorce include collaborative law and mediation. Be sure to discuss all of the options available to you with a Family Law Attorney.