Getting a divorce is the end of both a romantic and financial partnership. Taking proactive steps can help to better ensure financial success once the divorce is finalized.
A divorce marks more than just the end of a romantic relationship; it is also the end of a financial partnership. Those who are considering or have recently filed for a divorce are wise to keep the following in mind to better increase the odds of financial security after the divorce is finalized:
- Financial portfolio. It is important to have a good understanding of your financial situation. How much is in savings? What type of retirement accounts are present? How much is owed on the family home, auto payments and other forms of debt? During the property division determination in the divorce proceeding, both assets and debts will be considered for division. Having a good understanding of your financial portfolio can help to better ensure you receivable a more favorable outcome. In addition to having an understanding of these numbers, it is also wise to begin organizing the documents that go along with your portfolio. In fact, a recent article in Forbes notes that the more organized spouse often fares better in the divorce settlement.
- Big picture. It is easy to become attached to a family home. Financial and legal experts alike recommend that those going through a divorce keep the big picture in mind. Although the family home worked at one time, it may not be the best option moving forward. In addition to mortgage and insurance costs, also consider the cost of maintaining the home. It may be a more financially prudent decision to downsize.
- Diversity. This tip goes along with keeping the big picture in mind. Generally, financial security is better ensured with a diverse portfolio. In addition to assets that are easily accessible in the present, like savings account or property ownership, you may want to consider the wisdom of receiving a mix of retirement assets and security interests.
In addition, you should start tracking spending for two reasons: it will help you get a better idea of budgeting needs and it will help you notice any red flags. There are occasions when one spouse will attempt to hide assets or rack up debt prior to the divorce. Keep an eye on credit cards and joint accounts and watch for any unexpected changes.
Another key to increased success during a divorce is the use of an experienced divorce attorney. In addition to helping better ensure a more favorable outcome during the property division determination of the divorce proceeding, this legal professional will also address other issues that can arise, including child custody and child support.
Keywords: family law divorce