If you and your spouse are getting a divorce, that’s not only a stressful event. It’s also likely an expensive one.
You both know that you’re about to incur some legal fees. Plus, you may be uncertain about how best to prepare for the financial impact of your divorce.
While every divorce and its attendant financial implications are different, there are some strategies that all soon-to-be ex-spouses can use to limit the potential financial damage in these trying times.
With this in mind, here are financial tips for couples getting a divorce.
Gather All Financial Documents
Making copies of all documents can help to ensure that all the information is accurately documented. Gathering all financial documents is an important step as it helps with the accurate splitting of:
- assets
- debts
- income
Documents such as bank statements, tax returns, loan and credit card statements, wills or trusts, and pre-nuptial agreements should all be gathered. It is also wise to make a list of any joint or individual accounts and investments.
Finally, it is a good idea to take extra time to search for other important documents that may have been forgotten, such as:
- insurance policies
- loan applications
- retirement statement
- purchase agreements
Doing this part of the process correctly can help the divorce settlements proceed more smoothly in dividing assets.
Consult With Financial Professionals
When a married couple decides to divorce, they face a range of financial challenges that require specialist advice. It is an important step to consult with financial professionals such as:
- lawyers
- accountants
- mediators
This can help to ensure that a divorce may be handled without conflict and in a way that benefits each party financially. Legal advice from firms like Conrad Trosch & Kemmy is essential for helping couples to reach an agreement on financial matters such as:
- asset division
- spousal support
- taxes
- child support
Financial advisors may provide help with investment portfolios and long-term investment strategies. A financial consultant can also advise on the complications that can arise from pension splitting and other post-divorce financial planning.
Create a Realistic Budget
Creating a realistic budget should be a joint effort for couples getting a divorce. Plan for the future and to keep each other informed of the financial obligations each party is and will be responsible for. Financial tips for couples getting a divorce include openly discussing a budget that will cover all basic expenses, such as:
- rent/mortgage
- utilities
- food
- car payments
- medical expenses
- childcare costs
It also includes anything else that the couple will need to budget for. Agreeing on any additional payments, such as alimony or child support, in advance can help to avoid future disagreements.
Update Beneficiary Designations and Estate Plans
Review and update financial plans during the process. One of the items that couples should update during divorce is their beneficiary designations and estate plans. A beneficiary is a person or entity entitled to receive benefits from accounts such as:
- life insurance
- annuities
- retirement plans
Before divorcing, couples typically make their partner the beneficiary on these accounts, but during divorce, couples must be sure to update these designations.
Consider These Financial Tips for Couples Getting a Divorce
Getting a divorce is challenging, but it doesn’t have to be overwhelming or full of financial strain. Following these simple financial tips can help couples find financially strategic solutions as they end their marriage.
Divorce, while challenging, can be made easier with the help of financial consultants and experts. Reach out to experts today for assistance.
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Amanda Byers is a graduate of Columbia, where she played volleyball and annoyed a lot of professors. Now as Zobuz’s entertainment and Lifestyle Editor, she enjoys writing about delicious BBQ, outrageous style trends and all things Buzz worthy.
