Many people need help managing their personal finances during divorce. A new survey found that more than 75 percent of people near retirement do not know how to manage their finances, according to the American Institute of Certified Public Accountants. This is because in most relationships, only one spouse is familiar with their financial plans, leaving the other spouse scrambling to learn and understand how to plan for the future.
In addition to reviewing your financial plans during divorce, it is important to consider the full financial implications of divorce. This includes learning about the tax implications of divorce and how your retirement accounts will be divided under current laws. Evaluating these issues is vital to ensure your new financial plan addresses all issues before your start your newly single life.
Do you know what steps to take to protect your finances during divorce? It is difficult to plan for life after divorce, but taking appropriate steps now can save you a lifetime of stress and financial problems. Below are steps to consider taking to help you create a financial plan that will address your needs once your divorce is finalized:
- Understand the full financial picture. This includes learning about all financial accounts like checking accounts, savings accounts, retirement funds, pensions and other bank accounts.
- Determine your current marital budget and how your divorce will impact your monthly expenses.
- Discuss with your attorney how your finances will be split during divorce. This will help you create a budget for life after divorce.
- Consider selling property and other assets to help with future expenses.
- Consider increasing your retirement savings if it is an option.
- Create or update power of attorney documents and any other estate planning documents.
- Set new financial goals based on your income and lifestyle after divorce.
Financial planning during divorce is complicated. Understanding the issues that may come up and how they can be addressed will ease the burden and stress associated with your divorce settlement.
Since every married couple's finances are different and you have specific goals after divorce, it is best to work with a divorce attorney who will pay attention to your specific needs. Consult an attorney to discuss what steps you should take now to start planning for the future.