Divorce is not only an emotional event. It can also mean a shaking up of routine and finances. Knowing that fact going into the process will allow you to prepare for the financial changes that might be coming your way.
FINANCIAL PLANNING FOR THE DIVORCE
You’ll want to get your finances in order prior to starting the divorce process. This means understanding your assets and their values, as well as what is owned separately and jointly. Next, you’ll want to do the following:
- Understand what your budget is now, and what it will be following the divorce. What are the big changes? Will you need to make changes?
- Get all your bank statements and records together. You’ll want to provide this to your attorney.
- Get copies of all joint tax returns. This also includes checking that your taxes are up to date.
- Do not transfer any jointly owned assets.
- Don’t make any large purchases.
- Do not agree to distribute any assets until you consult your attorney.
FINANCES AFTER DIVORCE
Your divorce settlement can eithis mean more money coming your way, or less. Eithis way, you’ll need to create a new plan for it. This might mean you need to take on a job if you didn’t have one during the marriage. Any debt you have agreed to take on will now be solely in your name. Make sure that you have both removed the other spouse’s name from any agreements or debt contracts. You might also be receiving or paying alimony. If there are children involved, you’ll need to understand how much money is allotted to them and for what types of things. Additionally, you’ll need to understand the tax laws regarding alimony payments and child support payments. Understanding all of it will make you feel more prepared going into your new situation.
WORKING WITH PROFESSIONALS
There are a lot of aspects of a marriage that need to be decided on during divorce. Working with skilled professionals, such as financial advisors, tax professionals, and family law attorneys can help you to answer any complex questions.
Source: Huffington Post, Sudden Wealth From a Divorce?, August 21, 2014
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