Divorce can be long, emotionally draining and expensive. When many people begin the divorce process, they many not fully anticipate all of the financial factors that go into divorcing. Alimony and child support may be primary concerns, but they may overlook other important areas.
In today’s post, we provide tips for anyone going through the divorce process to make sure their financial affairs are in order:
Separate your accounts.
If you and your spouse have any joint bank accounts or credit cards, you want to be sure to close them as soon as possible. If your spouse accrues debt or fails to make payments on any account that your name is attached to, it can negatively impact your credit score. Therefore, you should close any shared accounts and open new ones in your name—ideally through a different financial institution. Check your credit report to make sure rarely used account doesn’t slip through the cracks.
Amend your estate plan.
Even if you don’t have a will or trust, you might have life insurance or retirement plans through your work, and you probably listed your spouse as a beneficiary when you first started there. Sift through your files and make sure you remove your spouse from any such plans. Chances are you don’t want your ex to serve as your healthcare power of attorney in the event that you’re in an accident and incapacitated.
Make a budget.
Sit down and figure out what your new living expenses will be and how much you’ll need to cover them. It’s also worthwhile to determine in advance how much you’ll need for legal fees in the divorce as well as how the divorce will impact your taxes.
Culling and separating all of the aspects of the life you shared with your spouse can be daunting and overwhelming. An experienced divorce attorney can greatly lessen your burden.