Achieving Financial Success Post-Divorce
During a divorce, matters related to finances can become increasingly complex and contentious. Fears over one’s current and future financial wellbeing are often well-warranted as many divorcees struggle financially post-split. It’s important, therefore to take steps to become both informed about one’s current financial status and also how to succeed financially on one’s own.
Even in cases where both spouses work, it’s common in many marriages to have one spouse manage the household finances. In the event a couple decides to divorce, the more financially adept spouse has a leg up as he or she likely has more in-depth and accurate knowledge about a couple’s financial situation. For the spouse who did not handle household finances, it’s crucial to take action to gain a comprehensive picture of both personal and shared assets and debts.
It can be challenging to gain a clear picture of one’s financial situation. When doing so, it’s important to take not only banking and savings accounts into consideration, but also investments accounts, retirement accounts and personal assets. In addition to assets, an individual needs to know how much and what types of debt they owe. When taking inventory of debts, it’s important to note that, as far as creditors are concerned, an individual who divorces is still responsible for an ex-spouse’s debts if he or she defaults.
Once an individual has a better understanding of their current financial standing, it’s wise to pay off as much debt as possible prior to a divorce being finalized. It’s also wise to establish clear directives about which spouse is responsible for the repayment of certain debts. Now is also an opportune time to take steps to provide for one’s own financial security post-divorce.
Closing all joint accounts, establishing credit, changing beneficiary designations and completing paperwork to ensure an ex-spouse is no longer covered under one’s insurance policies; are all important actions that should be completed as soon as possible. The entire divorce process can be complicated and overwhelming. An attorney can answer questions, clarify options and provide guidance through the entire divorce settlement process.
Source: Alice Echo News Journal, “Five financial considerations when you’re going through a divorce,” Paul F. Rycroft, June 7, 2014