Divorce can be an emotional rollercoaster, and because of its unique challenges, you can find countless articles online about how to get through it. That’s not my goal here. Below you’ll find some of the commonly overlooked financial areas that need attention after spouses go their separate ways.
While these items apply to both men and women, often-times wives get left out of important financial conversations and may be less comfortable navigating financial matters until they “steady their feet.”
Start with these items and you’ll be well on your way!
- If your financial advisor, attorney and/or accountant were hired by your spouse and you do not have a good rapport with them, consider interviewing other advisors who you’ll be comfortable with on your new journey ahead.
- Should you choose to keep your existing advisors, please remember that it’s unfair to expect them to “take sides.” Quality professionals are bound by rules of ethics and standards of care that prohibit conflicts of interest in working with clients. In some cases, you may be asked to seek another advisor, for your own benefit.
- Update your beneficiaries! Unless you co-parent minor children, you may not want your ex-spouse named as the primary beneficiary on your investments and insurance policies.
- The same goes for your legal documents. A divorce likely means that you need to change your Power of Attorney, Health Care Proxy, Will and any trusts you may have.
- Have a plan in place in case you find yourself needing care due to being hurt or sick.
- If minor children are a part of the equation, have frank discussions about responsibilities regarding their care, activities and education.
- Avoid using retirement savings for current expenses if at all possible. This may require a change of lifestyle or re-consideration of expectations regarding large future expenses (think college and weddings.)
- Spend some time getting to know your new budget. You’ll inevitably experience a change of household income and/or expenses. Track and organize these until you feel comfortable with your new circumstances.
- Ensure you have an emergency fund set aside. If you already have this, check to see if it’s the right amount for your current needs. If you are starting over, go slow and work up to the amount you need to have a cushion for the next rainy day, but start now!
- You may want to invest in a new financial analysis. This is a perfect example of a life event that warrants a re-vamp of your last financial plan. Chances are that your last plan will no longer serve you.
- Consider what you can afford for advice and seek professional help from a financial advisor.
- Prepare to meet with your chosen financial advisor. Have your new budget prepared (your advisor will help you with this step), think about your goals going forward, and have an outline of your portion of assets (and potential liabilities) after your split.
- Remember, you don’t have to do it alone, but it’s up to you to take the initiative.
To get help with planning after a divorce, contact me for a complimentary consultation! https://calendly.com/planningforgood/complimentary-initial-consultation-website
(Please note that this information is provided by me, Karen Melo Ticas, CFP®, strictly as general advice based solely on my personal education and years of experience in the financial services industry, unless otherwise noted. When making decisions, consider working with a professional that is well informed about your individual circumstances.)