Divorce Planning

A divorce can be a trying and difficult for everyone involved, but it can be even worse if you are not financially prepared to live a financially single life again. In a typical American household one spouse takes care of all the bills and finances. If you are not this spouse your quick action will reward you in the end.
Once you known a divorce is probably on the horizon it is important to establish your own checking accounts and credit cards to separate your finances from your spouse. It is also important to gather and have your own copies of important financial documents that will help determine your combined wealth such as mortgage papers, property deeds, insurance documents, and as many tax returns as you can get your hands on.
Make sure you close all joint accounts as soon as possible, especially joint credit cards.
Another critical aspect of a divorce is to plan out your own budget for monthly expenses. This not only gives you a sound financial foundation, but will give you guidance in the divorce settlement.

It is one thing to share a dentist with your ex spouse and quite another to share your financial professionals.  When a couple decides to throw in the towel and get divorced they realize they will have to address issues about child custody, splitting assets and paying alimony.  Rarely do they consider, with the exception of the race to the best divorce attorney, how their relationship with their financial professionals will be impacted.

The relationship with your team of financial professionals should be one of trust and without conflict of interest.  So what happens when there is a divorce and your advisors must choose between keeping you or your spouse as their client?  Often there is a closer relationship with one spouse or the other making this decision somewhat simple.  But, there is always the remaining spouse who must find a whole new group of professionals to hire.

The financial implications of divorce are immediate and require the advice of financial professionals and attorneys from the start.   Therefore, it is critical to find and establish new relationships as soon as possible.  Unfortunately, couples in the midst of a divorce are understandably distracted and sometimes don’t even realize the benefit of involving unbiased financial professionals.

A divorce almost always has a dramatic financial impact on one party or even both.  A team of financial professionals can review the current financial situation and come up with a financial plan for the future.  A well organized, comprehensive financial plan can be a useful tool for a divorce attorney’s negotiations.  Although additional planning may be required after a divorce is final, going to court armed with a financial plan can be very effective.

If you happen to be the one who not only divorced your spouse but also separated from your financial professional team, seek a referral from your divorce attorney.   Remember that a comprehensive financial professional team consists of a financial planner, a financial advisor, a CPA and an estate attorney.  You divorce attorney is likely to have a list of financial professionals who would be happy to help you on the path toward a fresh start.