Divorce can be a devastating event, and emotions often cloud judgment when it comes to finances. This can lead to impulsive spending and frivolous lawsuits, among other things. Fortunately, there are many steps you can take to protect your finances during and after divorce.
Strategies for Dividing Assets
Before getting a divorce, you should determine how much money you will need to support yourself and your children. This information can help you develop a budget and set savings goals for the future. Once you have a plan, it will be easier to keep up with expenses and achieve your financial goals.
Then, you should divide your assets equitably. This can involve a variety of methods, including selling property to divide the proceeds. It can also involve distributing assets based on financial needs, such as paying off debts or providing for a child’s education.
You can also try to find ways to save for retirement or other goals. Consider investing a portion of your income or buying an investment portfolio, which can offer tax benefits and increase your savings potential.
Managing Debt and Planning for the Future
If you have joint debt, like a mortgage or credit cards, you should eliminate it as soon as possible after your divorce, says Beth McClelland of East Bay Divorce Financial Planning in California. This is because joint debt is still both parties’ responsibility in the eyes of the lender, even if your ex-spouse is not responsible for making payments on it.
During the process of your divorce, it’s important to review all your bills and accounts. You should make sure all are updated to reflect your name only and that you pay on time. This can help you maintain a high credit score and minimize legal fees.
It is also crucial to review your assets and liabilities, both of which can be affected by your divorce. Look at your bank account and credit card statements to see how you’re using your assets and what you have left over. This can help you decide whether you have enough money for your new lifestyle after the divorce and can give you a better idea of how much you can spend.
You should also review your insurance policies, including your homeowners and auto coverage. These may need to be updated, as well as your life insurance policy. You should also check with your divorce lawyer in Miami about naming the proper beneficiary on your estate documents.
Your future will be affected by your divorce and how you handle your money, so it is important to make plans that will help you get through the separation process as smoothly as possible. There are several strategies that can help you plan for the future, including setting up a prenuptial agreement, creating an estate plan or working with a financial planner.
It is best to seek professional financial advice as soon as you know you are going through a divorce. A certified financial planner can provide a holistic approach to addressing your finances. The team at Davis and Associates, Attorneys at Law, LLC can assist with developing a personalized strategy for your unique situation.