What does it mean to have a successful divorce? It almost seems like there is no such answer. Divorce can be one of the most traumatic experiences one can go through next to the death of a loved one. So maybe the question should not be successful but may be less traumatic.
The financial aspects of divorce can be a challenge because often time one spouse oversees the finances while the other one is often left in the dark. The most stressful things in our lives are things we do not know about, the unknown.
Here are ten things you can do from a financial standpoint to reduce that stress.
- Consultant various specialists – Couples going through divorce usually rely on their attorneys for every aspect of their divorce. The fact of the matter is there are other professionals who can handle different aspects of your divorce more efficiently than your lawyer. This eliminates time your lawyer will spend on areas that are not their expertise. There are financial specialists, like Certified Divorce Financial Analyst (CDFA) who can help you with asset division, support calculations and filling out your financial statements. There are mental health specialists, real estate professionals, mortgage, specialists who are much more qualified and specialize in divorce. When you work with these professionals, your divorce becomes more efficient and that translates to less expensive.
- Gather your financial information – It is important to gather your financial information and to continue to inventory your financial assets and liabilities. Gather tax returns for the past three to five years, investment account statements, mortgage and equity line statements. List them all out. If you find something that has an account number on it, then chances are you will need to document it.
- Understand your finances – You may be the spouse that does not handle the finances. If this is the case, you need to start to learn your finances. You will have to do this post divorce anyways so now is the time to get educated. A financial expert can help you get started. Look for a CDFA who is familiar with the financial aspects of divorce.
- Establish a budget – There are three things you need to do financially. Where are you today? Where are you the day your divorce is final? Where are you going to be financially? The future will look much different than where you are now. You need to set a budget to determine where you will be post-divorce.
- Negotiate fairly – This is easier said than done but think about the end goal in mind. I never heard anyone post-divorce say they got everything they wanted. You must decide what is important to you in the end, especially if you have kids because you will still be co-parents for the rest of your lives. I suggest reading attorney David Kellem’s article about the price of peace. https://www.kellemlawgroup.com/blog/2018/march/david-s-divorce-dictionary-price-of-peace/
- Protect your Credit – Couples need to begin to close or change accounts that are help jointly. Credit cards, lines of credit and other accounts that are held joint need to be changed. If you are on an account that is held joint, and payments are not made it will also negatively affect your credit.
- Consider tax implications – Not all assets are treated equally. It is important to know what the tax effects on assets are when dividing assets. Some assets have a tax consequence while others do not. This will mean if you think you’re getting an even split you may not be after taxes are paid. Consult a CDFA for assistance.
- Update legal documents – This includes changing beneficiaries on life insurance, annuities and even emergency contacts. Consult your attorney on what legal documents need to be updated.
- Take of yourself – Finances can be complicated and overwhelming. It is important to take care of yourself as much as possible, including eating right, exercising and seeking therapy or therapy groups. Some people find that going through divorce can be a fresh start and a reason to finally put themselves first.
- Follow Court Orders – This sounds obvious, but some people think that they can decide what belongs on their financial statements and leave out assets or income that may appear not necessarily. Let your attorney advocate for you and the best strategy is to be upfront about everything. Credibility is important in this process.
Divorce can be stressful. Build a team of professionals that can help you get through it efficiently. Get yourself educated by attending webinars and workshops. A good place to look for some throughout the country is Vesta Divorce https://vestadivorce.com/.
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