A divorce can drastically impact your finances now and after the final court order. Property division, support payments and court costs have the potential to severely affect your quality of life.
Fortunately, with proper planning from the start, you can keep the financial blow of a divorce under control. You can not only work to prevent financial pitfalls, but also plan for your future financial success.
The following tips can help you to succeed financially after a divorce:
- Adjust lifestyle to match new income – Adjust to your new cash flow both during and after your divorce. Live within your means, maintain your long-term retirement savings and manage accumulated debt.
- Select the right attorney – Find a divorce lawyer with knowledge and ability in financial matters as well as strong negotiation skills.
- Take inventory of assets and liabilities – You will be in a better situation throughout your divorce if you fully understand your financial situation. Gather documents that verify your assets, liabilities, income and expenses.
- Check credit reports – Obtain credit reports from at least one source for you and, if possible, your spouse to check for debts or liens you may not know about.
- Keep tax ramifications in mind – Some assets will be taxable while others will remain tax-free. Calculate both the current and future taxation of shared assets during property division.
- Update beneficiary information – Make sure your intended beneficiaries are listed on insurance policies, retirement accounts and estate planning documents.
- Safeguard future support payments – If possible, arrange for child support or alimony payments to continue if the paying spouse dies or becomes disabled.
- Manage your routine transactions – Pay your monthly bills on time and create a budget to track your regular income and expenses.