If you are considering the idea of getting a divorce, you need to make sure you are prepared for what may lie ahead. The divorce process can be easy or difficult, depending on a number of factors, including the number of marital assets you have, the value of these assets, whether you have minor children and whether you are working outside of the home. Experts say that protecting yourself financially can alleviate a lot of stress during and after your divorce.
In order to make sure that both you and your spouse are protected, experts recommend discussing your financial situation with a financial planner, attorney or other qualified professional as soon as possible. In many marriages, one spouse is often responsible for the finances, while the other is left in the dark. If you are getting divorced, it is important that both you and your spouse are up to speed. Review your financial information, collect all relevant documents and provide the professionals with a full and accurate picture of your financial status.
In the midst of a stressful divorce, many spouses make the mistake of making quick decisions with regards to property division. For example, your first instinct may be to keep the family home and let your spouse have cash. While this may benefit you emotionally, this may not be the most practical financial decision for your future. It is difficult for many people, post-divorce, to afford house payments without their spouse's contributions. The house can also be difficult to turn into cash, and cash can be especially beneficial in case of emergencies. Experts suggest continuing to share ownership of the house with your spouse until it sells, and then split the profits.
Once your divorce is complete, you will need to start over financially. Create a new investment plan to make sure you are financially secure in the years to come. Keep in mind that the year following your divorce will be an uncertain, transitional time in your life. As a result, it is important that you give yourself as much financial flexibility as possible. Avoid making large purchases and always make sure you have savings to fall back on during this transitional period. By making smart financial choices, you can protect yourself financially during and after your divorce.
Source: Forbes, "How To Handle Financial Planning During A Divorce: 4 Steps To Protect Yourself," Joel Johnson, Dec. 8, 2017