Six Smart Financial Moves to Make if You Are in the Middle of a Divorce or Separation
It’s no secret that divorce has lasting effects—even long after a couple has split. Among the many lasting effects that a divorce has on individuals and families, financial difficulties are extremely common. The divorce itself might be costly if lawyers are involved, and many couples must go from living off two incomes to only one. Divorce doesn’t always have to lead to financial ruin, but you must be prepared for related expenses and the financial changes you will need to make during and after the divorce. If you are in the middle of a divorce or separation, there are a few smart financial moves you should make before too much damage is done.
Don’t Hire the Most Expensive Attorney
Many people are under the impression that they need the best divorce attorney that money can buy in order to protect themselves and their financial assets. The truth is that spending all of that money can come back to haunt you and your bank account. It’s better to find an attorney or mediator whom you connect with, can actually afford, and is qualified to handle your case.
Don’t Think That a Mediator Will Protect Your Finances
A mediator’s main goal is to get a settlement, not look out for the financial interests of the parties involved. They want an equitable settlement, but ultimately it’s up to you to negotiate what you actually need and want. Remember that these are your assets and finances at stake, not the mediator’s. If you were not the one who handled the family finances, you might want to meet with a financial advisor who can give you advice on the best course of action to take so that you can properly negotiate.
Get Separate Credit Cards
Couples go their separate ways when they get a divorce or separation, and their credit card accounts should do the same. The reason you’ll want to close any joint credit card accounts that you have with your soon-to-be former spouse is so that you aren’t responsible for any incurred debt. Most couples in the middle of a divorce or separation aren’t seeing eye-to-eye on nearly any issues, so the separate use of money will avoid adding another issue into the mix.
Sell the Family House
No matter how many good memories you might have made in your family house, you’ll be better off selling it. If you’re thinking about keeping the house, you’ll need to have the finances to take care of upkeep and maintenance as well as your family. Selling a home in the midst of a messy divorce can sometimes add more stress on the situation, so many couples will wait until the divorce is nearly final to actually sell. This gives both of you time to find somewhere to live, and if children are involved, the custody terms should be determined by the time the divorce is final. From a mental point of view, remaining in the house can make it even harder for you to move on with your life, so finding a smaller residence will help you save money and move past the divorce.
Change Your Insurance Policies
In addition to dividing your credit cards and bank accounts, you’ll want to handle your insurance policies as well. According to the professionals of Underwriters Insurance Brokers who specialize in insurance in Vancouver, you’ll want to make sure that your ex-spouse is no longer listed as the beneficiary on your policy, or the heir on your will. You’ll also want to alter car insurance and health insurance terms so that you aren’t financially responsible for any of their accidents.
Allow For Contingencies in Your Property Settlement Agreement
The property settlement agreement essentially spells out who gets what during the divorce. Make sure that you plan for the present as well as future circumstances. For example, how likely is it that your kids’ needs will change in the future? This isn’t usually determined until near the end of the divorce process, but making financial arrangements for the near and distant future will make it so the divorce has a limited effect on your finances.
Thinking about practical things like insurance and property is tough to do when going through an emotional ordeal like a divorce. However, taking care of these things before the divorce is final will provide you with a better future and gives you the chance to move on as you make changes in your financial habits and lifestyle.
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Category: Family Finances
