Alongside the emotional stress of going through a divorce, there is also a heavy amount of financial stress associated with the process. Approaching financial decisions when you are going through a hard time emotionally can feel like fighting a losing battle; however, thousands of people have to do this yearly, making it a common progression.
Having a strong emotional support network around you when going through a divorce is hugely helpful, as is approaching the financial decisions you’ll be making with as clear of a head as possible.
There are many great online resources available which can guide you through the divorce entitlements and processes. But do remember that every divorce and financial situation is different. No two people’s situations tend to be the same so these guides can be very general in some scenarios.
Here are several factors to consider.
1. Utilize an expert financial team
The best first step is to bring on board a financial advisor or a family lawyer, ideally who specializes in divorce. Even those couples who have mutually agreed on a divorce and don’t feel the situation is ‘messy’ still can benefit from legal help and financial advisory services.
The splitting of marital assets needs to be communicated through facts. There are tax implications to consider too, making it all a little too complicated to battle through without help.
If you are financially struggling to seek legal help, several organizations offer free services. These can help you with getting access to forms and meeting with professionals in your area that are more affordable.
2. Make a Financial Checklist
It’s worth having a detailed and clear vision of your finances from the offset. Consider creating a thorough checklist right at the beginning that outlines all the finances which need resolving through a divorce.
It’s an emotional time from start to finish, and sometimes just having a clear, concise checklist which states the facts and figures helps to make things more straightforward.
3. Look at all joint accounts
The obvious one here is a joint bank account, but you’ll be surprised when you assess everything else which is in joint names, too. For example, life insurance policies or even some forms of pensions can be set up in both names.
It is also expected to update your will and make changes to legal documents you have. It’s likely your ex-partner will be listed as your spouse or emergency contact on health and work documents, so make sure these are updated too.
4. Assess your money situation for your new life
Now may not seem the right time to be thinking about your monthly budget or the new life you’re about the take, but the earlier you do, the better it will be. Start tracking the expenses that only affect you on a day to day basis with a money tracking tool or app. How you split assets and justify needing any support requests will all come down to your shared expenses and your own finances.
You will also be introduced to a range of expenses you may encounter as you start your new life. Ones that you never considered before when in a marriage. The earlier you get your head around these, the easier it will be to adjust.
6. Look into retirement
Retirement and savings are always a big issue when going through a divorce. The earlier you divorce (for those who divorce earlier on in life), the more straightforward it is and can give you time to recover from any disruptions to retirement savings. Pensions tend to be considered as a joint marital asset that will need to be divided when going through a divorce. However, once the divorce is finalized, you will not be entitled to any of your spouse’s retirement benefits.
The bottom line here is not to leave investment and financial planning up to your spouse during this time. Take control and do it together. Become educated about all the above, so that you don’t leave yourself in a vulnerable position.