Don't Be Financially Victimized By Your Divorce
Failing to take the financial repercussions of a divorce to heart can lead to a permanent loss in fiscal stability and security. Take a look at the following issues that separate victims of divorce from those who know how to protect their financial future.
Be Proactive – The very moment you know that your marriage is over is the exact time to begin taking action. You cannot afford to wait until you are served with divorce paperwork to begin protecting your rights to marital assets. Access all financial accounts and print statements from your bank and investment sources. Assuming that you will be able to access these later on is a big mistake. Make copies all real estate deeds, vehicle titles, tax returns, and insurance paperwork.
Create a Budget and Net Worth Statement – You need to start thinking like a single person when it comes to budgeting. It may be too early to have the complete picture of what post-divorce life will bring, but an estimated budget is a good beginning that can be updated periodically as issues are settled. You need to know what you have as a couple and what you each have individually as well as your debts, so make a net worth statement. Speak to a financial expert (like an accountant) for more help.
Consider the IRS – Your marital assets could be taxable and you are responsible for any past tax issues on joint returns. Be sure to speak to a tax expert or an accountant about your tax liability for certain assets. If an audit on a joint return should occur, make provisions for dealing with the financial fall-out of that possibility.
Be Careful of What You Wish For – Sometimes, possessions carry emotional hitchhikers. If you aren't careful, you could end up disregarding commonsense financial advice because of an undue emotional attachment to an item. The family home is a perfect example of this. When your life feels unsettled because of the divorce, your home can feel like a rock of stability. Unfortunately, not all homes are good assets. You must be aware of the value of the home and the costs associated with maintaining it before you decide to fight for it.
Don't Dismiss Estate Matters – Along with your divorce attorney, make an appointment with an estate attorney to discuss changes or the creation of wills, trusts, life insurance policies, investment accounts, and more. Take a careful look at who you name as beneficiary on all of your insurance policies. Along those same lines, consider taking a life insurance policy out on your soon-to-be ex, particularly if you need spousal support and/or have children.
Talk to your divorce attorney for more tips on dealing with the financial ramifications and for referrals to additional experts to guide you through the process. Reach out to a law firm such as Cooper Levenson Attorneys At Law to learn more.
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