You’re Getting a Divorce – Now What?
Marriage is supposed to last forever. Unfortunately, that’s not what always happens. According to the American Psychological Association, 50% of marriages end in divorce. The story behind each of these divorces is unique, but for women, oftentimes, the ultimate financial effect is the same – less money and more stress.
Divorce can be painful, but the financial aftermath doesn’t have to be. When it comes to ending a marriage, a little planning can go a long way in decreasing stress and ensuring financial confidence.
Below are a few/some of the steps every woman going through a divorce should take pre-and-post the divorce being finalized.
Pre-Divorce Action Plan
- Consult a family law attorney
- It’s imperative, before taking any action, that you understand your legal rights and responsibilities. Family law attorneys are uniquely positioned to advise you on issues related to divorce, including the division of marital property, child custody and support, and alimony.
- Hire a financial planner
- A financial advisor can increase the ability of the attorney to translate and use financial information to move a case forward. Financial advisors who understand the vocabulary of family law and appreciate the unique rhythm of divorce proceedings and can provide valuable input to improve the chances of a successful resolution to an otherwise difficult and unsettling process.
- Make copies
- You need copies of tax returns, investment statements, employee benefit handbooks and all insurance documents. Also, obtain a copy of your and your spouse’s Social Security, credit card and bank statements. If you or our spouse owns a business, gather as much information as possible about the business finances.
- Stash Cash
- Ensure you have access to money of your own. If your spouse moves out and stops paying bills, you will need to pay those bills until temporary support orders can be entered.
- Establish or build credit
- If you haven’t established credit, now is the time to do so. Get a credit card in your name only. If you have established credit, request copies of your credit reports and make any necessary corrections.
- Insure Yourself
- If you were covered by your husband’s health insurance policy, you will need to get insurance. COBRA or private insurance can be costly, so understand the costs of these before settling.
- Understand your assets and liabilities
- Make a list of all household items, including jewelry, artwork, furniture, etc. Understand all of your liabilities, including loans, mortgage, etc. And, bring this information with you when you meet with your family law attorney.
Post-Divorce Action Plan
- Update bank accounts and credit cards
- Cancel all joint credit cards and/or joint checking and savings accounts. Open individual bank accounts and change any direct deposits to your new account.
- Update your estate plan and beneficiary designation
- Update your estate plan and beneficiary designations, this includes your will, medical directive, general power of attorney, 401(k)s, IRAs, deferred compensation plans, stock options, etc. If you do not update these items, your spouse will get these assets, even if you’re legally divorced.
- Transfer titles
- The way accounts are titled can supersede estate plans. Be sure to transfer titles for real estate, investment accounts, cars, etc.
- Change your passwords
- Change the passwords on all your accounts, including checking accounts, frequent flier accounts, ATM cards and credit cards.
Ending a marriage is never easy. But, this financial divorce checklist helps lay the groundwork for a successful outcome right after the divorce and in the years to come.
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For information about SignatureWOMEN®, please contact Page Harty, Partner and Director of SignatureWOMEN®, at email@example.com.