Fight Your Way through Divorce – Financial Tips

Divorce Financial Tips

When the fights get nasty, even the strongest people give up on their marriages. While divorces can be emotionally challenging, the separation process puts additional financial stress on both the parties. Anyone who has gone through a divorce would tell you exactly how painful the struggle is, to settle things peacefully and move on with their lives. It isn’t possible to feel immediate relief, but what can make the situation less frustrating is a little guidance on making the right financial choices. It is important to take sound decisions throughout the settlement process in order to live a relaxed post-divorce life. So, here are some points you should consider, which will help you reach an equitable agreement, beneficial for both parties.

Divorce Financial Tips

There are many factors into consideration: from dividing the property to deciding whether alimony should be paid. It is therefore absolutely necessary to know and understand all the possible consequences of the proposed settlement. Amongst all the emotional turmoil, you need to be focused on what you really want. Think through about what you want to accomplish from the litigation. Have an action plan, and have clear objectives.

Many people, friends, and family are going to pour in advice, just to make you feel better. However, you are only to take legal and financial advice from your lawyer or a financial consultant. Because, a Yes, I know exactly how it feels isn’t true at all. No one has gone through the exact same situation as you are at the moment, and it is therefore really important to take professional help, to get proactive advice throughout the process.

Now, coming to the administrative work you need to do to get your personal finances in order and secure your financial picture during the divorce procedure, there is a list of things:

  • Close all joint credit accounts with your spouse.
  • Remove your spouse’s name from any of your bank accounts, credit cards, and employee’s records. Make sure you make changes regarding your marital status and address on tax records, post office records, driving licenses and other professional licenses, health insurance, and any property titles.
  • Change beneficiaries on your pension and life insurance policies. Remove your spouse’s name from your will, trust, medical directive and power of attorney. (OPTIONAL)
  • Open a new bank account and establish sound credit in your name.

Sorting Out Finances

Make a list of all that you own and any debts you have: your home, your savings, household items, your car, etc. In case you are not clear about what your possessions are worth, you may want to consult an expert. Then comes the tough job of deciding who is paying the bills and the loans, how the house should be divided, what to sell, what to divide, how to support your children’s education and other several aspects that draw up an agreement, which explains how you’ve decided to divide everything.

Out-Spouse and In-Spouse

Understand your role in your marriage finances, by understanding the difference between the above-mentioned terms. The ‘out spouse’ is the one who doesn’t have a relationship with the family financial advisor or attorney and has never been involved in managing bills, insurances, and budgets. While the ‘in spouse’ is the one who has enough experience and contacts to make this transition without having to go through much trouble. Whether you are an ‘out spouse’ or an ‘in spouse’ determines how secure your post-divorce financial security is. No one wants to get stuck with useless illiquid assets, while the other part gets to enjoy the cash.

For the Older Lot

While those of you who are divorcing in their middle age or later have an additional problem of child custody, because your financial situation in your 40s is more complex than it was when you were in your 20s or even 30s. You have lesser time and energy to get back on track after typical financial setbacks of divorce since you are closer to retirement. Plan out a strategy to minimize disruption to personal finance and secure a safe financial future for your family.

Divorce Financial Tips: Some Do’s and Don’ts

  • DON’T run up debts on joint accounts or freeze accounts without giving any prior notice to your ex-partner. Also, do not ignore calls or letters from companies or banks you owe money to. If you are having a money-tight situation, it is always more advisable to reach out to them as soon as possible, the sooner it is, the more feasible options you have.
  • Consider only those conditions which cater to bills to be paid in the short-term.

While we are already struggling to balance our personal financial status, divorces can simply make the balance status significantly more complicated. Most people slip into the web of emotions, as the finances are wholly neglected. What it really takes is strength.