How to survive a divorce financially
If you are going through a divorce your emotions are running on overload. An unexpected divorce has been said to be more draining than an illness or the death of a close family member.
Here are a few tips to help guide you or a friend that you know that is going through a divorce:
- All divorces involve financial settlements. Take a closer look at your finances/investments to be sure that nothing is missed. Make a list of everything!
- Your divorce attorney is an expert on the law; however, don’t expect them to understand investments, taxes, and insurance.
- Now more than ever, you need a post-divorce financial plan. It is best to understand what your budget and cash flow will be after you separate.
- A good practice is to understand how divorce will impact financial aid, insurance policies, and retirement plans.
- Understand the rules of a qualified domestic relations order (QDRO) – there are tax consequences and rules that you need to follow.
- Always consider taxes – there are enormous mistakes made around negotiating pre-tax vs post-tax. You should always consider post-tax.
- Find a new financial advisor that is not associated with your ex.
- Take the time value of money into consideration. Always calculate a stream of payments rather than lump payments. You need to determine the rate that money is being discounted.
- Make sure you will have adequate health, disability, and life insurance coverage after a divorce.
- Update beneficiary information on all of your investment accounts.
- Request a copy of your credit report and look for any misinformation. A good credit will be essential to rebuilding your financial future.
- Open new bank accounts and credit cards in only your name.
- If you do not fully understand something, do not be afraid to seek another expert to ask your questions.
We can help put your mind at ease and put your financial life back together. We bring an interdisciplinary approach to the challenges of divorce with our knowledge of investments and financial planning. We have supported our divorced clients and their attorneys by providing solutions to complicated settlement issues as well as helping them avoid common mistakes that can occur during a divorce settlement. Getting the right divorce advice can help put you back on the path towards a more confident financial future.
Many of the clients we work with are from North Attleboro, Plainville, Norton, Mansfield, Raynham, Attleboro, Wrentham. We also have helped answer questions on divorce with people who have called us in Bristol County.
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Advisory services offered through Constant Guidance Financial LLC, a registered investment adviser.
