How Do I Make Sure My Finances Stay Intact After My Divorce?
Getting divorced can be an emotional time in many people’s lives. However, if you do not consult with someone when it comes to your personal finances, you could also end up jeopardizing your future retirement, and the ramifications can be huge. Below, we discuss some of the most important actions you need to take in order to ensure that your finances stay intact after your divorce:
A New Budget
First and foremost, you want to come up with a new budget. This should reflect the costs of living separately as well as what your most important immediate needs are. For most people, typically includes paying for a new place to live, health insurance changes, other insurance changes, and new expenses, such as a car, groceries, and anything else that one’s partner covered before. Start small and work up to bigger items, such as saving for retirement.
You will also need to carefully manage your divorce-specific expenses, for example, paying for divorce attorneys and/or financial planners. Make sure that you are familiar with the divorce laws in your state and that you understand the timeline for the process so that you can accurately plan for how long you may need to pay these professionals.
Focusing On Asset Decisions
Asset division something you’re going to want to spend a significant amount of time discussing with your divorce attorney. This is not only because not all assets are created equal, but because you also need to understand the tax implications of any and all asset divisions, as some retirement funds, for example, may have been taxed already and some may not have. You also want to make sure that you understand any effects these decisions might have on your tax bracket and any Social Security benefits that you or your spouse may be able to obtain based on the other’s record if you were married for 10 years or longer.
Whether or not you are keeping the house in particular is an asset you want to spend a good amount of time on. Not only will you need to decide whether it is going to be a financial burden to hang onto it, but if the home still have a mortgage on it, it will likely be refinanced, and you and your attorney need to adjust the title on the house if you are keeping it.
Deal with Debt
If you share debt with your ex, it is best to try to take care of it before the divorce is finalized, as carrying that debt into your new future can be difficult. Remember that, in terms of the lenders’ perspectives, joint debts are both parties’ obligations, so any expenses that your spouse promises to pay for you need to follow up on by making sure that you continue to have access to that account so that any failures to pay do not negatively affect your credit. Joint accounts, such as credit cards, should simply be shut down so that they are not a potential liability, and all of this will need to be stipulated in the divorce agreement.
if you have children together, you will not only need to address important issues such as custody and child support, but also who is going to cover college costs, for example, so as to prevent future misunderstandings that could have huge repercussions, such as spouse paying private school tuition.
Make sure that you update the following accounts and documents at a minimum
- Titles on important assets such as the house and cars
- Power of attorney, healthcare directive, and your will
- Authorized users on credit cards
- Banking accounts
- Security passwords for online accounts
- Beneficiaries listed on retirement accounts
Also know that you and your attorney need to work on additional issues such as breaking joint tenancy on assets that both you and your spouse own so that you do not have to deal with the right of survivorship and someone accidentally inheriting certain items that belong to you.
Contact Us Today
If you live in Florida, contact our experienced Orlando divorce attorneys at Arwani Law Firm, PLLC today with any questions you might have.