Financial aspects of Divorce
- by James Walsh
- Published on 1/2/08
- Article views: 837
The financial aspects of divorce are numerous and very complex especially for the spouse who has not been handling the finances of the family. It has a lasting impact on your future and the future of your children. Divorce can have more financial impact on your life than just buying a new house or planning a retirement. Do not willingly give up what is rightfully yours, especially if you are the one with the custody of children.
Do not assume that your attorney will protect you financially too. It is the job of a financial planner to assess the real value of your assets, taking tax consequences into consideration and to provide you with financial planning advice prior to a divorce settlement. That is why having a divorce financial planner working with your attorney is an invaluable investment in your future.
A divorce financial planner is a divorce professional be it a lawyer or an accountant who has completed the specialised training in the financial issues of divorce through a recognised institute of divorce finance like the Academy of Financial Divorce practitioners. A financial planner must also fulfill ongoing continuing education requirements and adhere to a strict code of ethics.
Having an expert to guide you increases the chances of arriving at a settlement that fully addresses your long term financial needs and capabilities and those of your spouse as well. It allows both the partners to have a clearer view of their financial futures. A financial planner also advises you on the liquidity of assets, the joint loans, interest and debt payments associated with your share of assets.
A financial settlement consists of an agreement on issues such as alimony, child support and division of property. Division of marital assets like house, cars, retirement plans, insurance policies, stock holdings, tax refunds and payments, artworks and antiques, mortgages, loan payments, credit card balance are also included.
Before approaching an attorney, mediator or a planner try and do the spade work regarding your finances. List your marital assets and get appraisals where necessary like art works and antiques. Calculate the child support needs to cover food, housing, day care, clothes, school supplies and other expenses. Get written confirmation from your spouses employer of your spouses salary, vacation balance, bonuses and stock options. Have a good idea of your spouses income potential.
Try and reach an out of court settlement amicably. Ask your attorney to prepare a proposal after consulting your financial planner keeping specific requirements in mind. Encourage your spouse to do the same and present it to you. If it is not possible then the court will decide that for you.
Once it's clear that a divorce is imminent, cancel any joint bank accounts and open individual accounts. Cancel all credit cards and get new ones in your own name. Close all unused credit accounts, and notify your creditors of your change in marital status.
Even while a final decision is being made other factors come into play like the law in your state. Some states go for equal division of property while others go for equitable division which is different from equal division.
Once the settlement in is place and the divorce has been granted there is post divorce financial planning to be taken care of. As you cope with other effects of divorce it is important to wrap up your financial divorce too.
After your assets have been legally divided, change names on house deeds, stocks and bonds, and car titles, as necessary. Change beneficiaries on investments, retirement plans, life insurance policies, and savings accounts. Update your will. Check your credit report to make sure your spouse hasn't incurred debts in your name since your divorce or separation.
Also, keep copies of any support cheques you have made or received. Keep an ongoing account and ledger of payments and retain all supporting documents. Prepare a financial plan for the next year by setting short, medium and long term goals.
Start saving whatever you can. Prepare a post divorce timetable for future events such as anticipated change in the amount of child support due to child graduating from high school or dates of major payments to be made.
Divorce can be financially devastating for one or both parties; it often results in lower standard of living than earlier. However, educating yourself and taking a few precautions can reduce the ill affects.
James Walsh is a freelance writer and copy editor. If you would like more information on how to get a quickie Divorce see http://www.quickie-divorce.com
James Walsh is a freelance writer and copy editor. For more information on Data Recovery see http://www.fields-data-recovery.co.uk
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