Samantha L Dean, Principal, The Presidio Group
July 8, 2016
No one marries with the intention of getting divorced and perhaps, because of this, divorce is a time of extreme emotional stress. It is also the most critical time to be able to separate financial issues from the emotional ones. That seems straightforward enough, but that clear demarcation has a tendency to get very blurry when a divorce is in process, and it gets challenging to approach the dissolution of a marriage like a business – not emotionally or romantically, but factually and with purpose.
Once a divorce is final, it is time to reassess your goals and objectives and reset expectations for the future. This would include (but not limited to) developing a monthly budget, addressing estate, financial and tax planning needs. Depending on a divorce settlement, all of these may vary greatly from a pre-divorce situation and from one divorce to another.
As part of starting fresh, there are a few administrative items that are often overlooked in the quest to move forward. The guidelines below are applicable regardless of who was responsible for managing the finances of the household.
• Close joint bank accounts and credit cards and update or open new ones
• Start establishing credit if necessary (Request copy of credit report)
• Update insurance policies (Homeowners, Auto, Umbrella)
• Update utilities, DMV/driver’s license, passport, etc.
• Update beneficiaries on life insurance, 401ks, pensions and IRA accounts
• Research health insurance coverage
• Update emergency contact where appropriate
• Assure necessary tax returns are filed
• Update estate plan (including changing your Will, Power of Attorney and Health Care Directives)
Whether amicable or not, a divorce is a time of emotional stress. A financial divorce specialist can help separate the financial issues from the emotional issues, provide guidance through these stressful times, and keep an eye on your long-term financial security.
If you are thinking about a divorce, in the process or post-divorce, consult your financial advisor for more assistance.
Read our previous posts.