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Preparing for your divorce: 3 financial tips

Preparing for your divorce: 3 financial tips

Divorce takes a toll on your emotions. Splitting up is a draining and disheartening thing to go through. It is often difficult to think practically about your finances when you are in the middle of an emotional storm. When you think about all the things you need to handle, you may feel like you will not be able to do it.

However, you can effectively manage your personal finances while ending your marriage by following a few tips. Here is how to maintain your financial health throughout your divorce.

1. Understand your role

Determine whether you are the “in spouse” or the “out spouse.” If you consistently handle the budgeting, bills, investments and insurance payments, you are the “in spouse.” On the other hand, if you are not actively involved in these decisions, you are the “out spouse.” Whichever one you are will affect how you will handle your transition and build your financial future.

2. Tackle administrative tasks

Here is a list of some essential things you must take care of:

  • Close joint credit and bank accounts
  • Change your marital status and address on property titles, utility bills, tax records and health insurance
  • Open new credit cards and bank accounts in your name only
  • Update beneficiaries on your retirement plans, including your 401(k), IRA, pension and life insurance
  • Disinherit your spouse in your estate planning documents, including your will, trust, living will, medical directive and power of attorney
  • Establish or maintain your own credit

This is a great starting point for securing your personal finances.

3. Do not listen to unprofessional advice

When your friends, family members and coworkers find out you are divorcing, they will be quick to swamp you with their own tips. People who have been through the process will probably overshare about their experience. While talking with these people may help you cope, you should take their advice with a grain of salt. Rely on legal and financial professionals for important decisions.

For more information, contact Louis Wm. Martini, attorney at law.

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