Steps Involved In the Financial Planning Process After Divorce

Steps Involved In the Financial Planning Process After Divorce

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Most spouses spend years on their financial planning together, with the goal of an easier life, college for their children, and pleasant retirement years. But what happens when their plans are upended by a divorce and both spouses must separate their combined assets and go on to plan for two separate financial futures?

How to wisely manage finances during and after a divorce is one of the most important considerations in a divorce other than child custody. What are the steps for moving forward with financial planning after a divorce?

Begin Preparing Before the Divorce

Financially preparing for life after divorce begins before the divorce. You can do this by opening your own bank accounts, including both checking and savings accounts. Do not open any new credit card or investment accounts until after the divorce is finalized to avoid risking them becoming marital assets subject to division.

Then, speak to your Denver divorce attorney about the pertinent documents you’ll need for the full financial disclosure and discovery period of the divorce such as:

  • Bank and investment statements
  • Mortgage statements
  • Credit card statements
  • Copies of bills and routine expenses
  • Proof of income and revenue sources
  • Pension papers
  • Copies of life insurance policies

It’s also helpful to end all shared subscriptions between spouses such as streaming platforms, and identity theft protection plans. Change the passwords on your email and social media accounts.

Take Steps to Protect Yourself During the Divorce

It’s critical to avoid letting the divorce process itself eat into your share of the marital assets whenever possible. You can save money, time, and contention by negotiating a settlement agreement with the help of your attorneys without going to court. Professional mediation is a valuable tool to accomplish this.

Do not attempt to hide, spend, or otherwise dissolve assets since this may cause a judge to award your spouse more of the remaining assets or order you to pay temporary spousal support.

Be sure you have a skilled attorney to protect your rights and safeguard your best interests throughout the process.

Steps For Post Divorce Financial Planning

Steps to Take For Post-Divorce Financial Planning

After the divorce, once you have a signed settlement agreement or a judge’s divorce orders outlining your share of the marital property as well as any separate property, it’s important to take specific steps to ensure that nothing slipped through the cracks as you move forward into a separate financial future.

For financial peace of mind post-divorce, do the following:

  • Be sure you’ve canceled all joint accounts and opened new accounts in your name only
  • Change beneficiaries on all accounts
  • Retitle any property allotted to you in your name only
  • Create a new budget for your changed circumstances
  • Update your insurance coverage, including health insurance, auto insurance, and property insurance to show that you’re divorced and be sure you aren’t paying homeowner’s or renter’s insurance for property that’s no longer yours
  • Create emergency reserve funds and financial safety nets whenever possible, such as a cash account with enough money for six months of living expenses and disability insurance to ensure a continued paycheck should you become disabled
  • Change your will or estate plan and social security information

Finally, don’t risk going it alone when it comes to financial planning for your changed future after a divorce. By hiring an experienced family law attorney in Denver and a financial planner, you can ensure that you’ve missed nothing and paved the way forward for a fresh start.