Divorce can be difficult emotionally and can put a financial strain on both parties. If there are many assets to divide, it may be tough to remember them all and even harder to agree on how to divide them. It is not impossible to walk away from a divorce financially sound, but it does take some thought and action to keep your assets protected.
Consult a Lawyer and Financial Advisor
A lawyer can help you to navigate the complex laws surrounding division of assets and the legal proceedings that must be taken care of before the divorce can be finalized. A financial advisor can help you to create a budget for yourself as you move through the divorce and can help you to understand more about what you will need come tax time. Both professionals can be extremely helpful for you during a divorce, so don’t discount one in favor of the other.
Close Any Joint Accounts
Poor financial decisions on the part of your spouse can affect your credit aversely if you have joint accounts. In some cases, spouses may even max out credit cards or miss payments on loans intentionally to hurt the other spouse. To avoid these types of financial hits, close joint accounts as soon as there is a separation or talk to your soon to be ex-spouse and work together to change the account ownership over.
List Assets and Prioritize
Go through and detail all of your assets as well as you can, and then try to logically prioritize them by what you must have versus what you are willing to relinquish. Try to be fair when you make this list, as the more amicable the division of assets is, the more likely that the divorce will go smoothly. Being organized like this may also help you to secure more of what you want when it comes time to negotiate.
Update Insurance and Beneficiaries
Health insurance, car insurance, dental insurance, life insurance and any other type of insurance that you have purchased as a family plan will need to be updated so that you can each carry your own separate policies after the divorce. When changing plans over to separate policies, be sure to change beneficiary information. If the divorce is not amicable and you don’t know everything about your policy, an insurance agent will walk you through everything if you ask for assistance.
Try to Settle
Settling outside of court can save money, time, and emotional upset. It is easy to draw up paperwork that details all aspects of the divorce agreement, including child support and visitation if applicable, alimony, and the division of assets. Keeping things cool and logical throughout the proceedings may be your very best strategy to preserve your finances.
If you are going through a divorce, consult a financial advisor in your area to help protect your assets.
