We work with many clients, both individuals and couples, who are going through the difficult process of divorce. We help them understand their current financial situation, what they have, and how various decisions, pursuant to the divorce, may affect their financial future.
I just met with a gentleman yesterday who is going through the divorce from his wife of 24 years. This meeting made me think of the common advice which we give to clients going through a divorce, over and over again, which is as follows:
1.) Understand your current financial situation and get it in order. What assets and liabilities do you have? What are the account numbers and values? How do you contact the financial institution? What assets or liabilities were brought into the marriage and kept in separate name? Make a list of all your assets and liabilities (debts) and how they are titled.
2.) Review your credit report. Many clients are shocked when we review their credit report with them and they find out that there are debts they knew nothing about. It is typically a good practice to review it early in the process as well as six months to a year after the divorce is final to ensure that all the post divorce debts were titled the way in which they were intended and that there aren't any new debts which were created without your knowledge.
3.) Create joint household and individual budgets. It is impossible to know how various settlements scenarios will affect you financially if you do not know how much you spend, on what. It is also impossible to get your future financial house in order if you do not have a plan to get there!
4.) Do not take financial advice from your attorney. Attorneys know the law, however, many of them try to practice as financial advisors as well. Get your legal advice from your attorney and your financial advice from a Certified Financial Planner who focuses on working with clients going through a divorce.
5.) Make sure to change your beneficiary designations to reflect your wishes and the divorce decree (if applicable) as soon as the divorce is final! Having ex-spouses listed as the beneficiary on your retirement plans and insurance policies, when this was not ordered by the court or intended, leads to significant estate settling issues should you die without making these changes.
White House Financial & Settlement Consulting helps families live easier and less stressful lives through the proper management of their financial resources. We do this by acting as our clients’ trusted advisor providing a personal touch customized to the client’s needs! Please visit our web site at www.whitehousellc.com for more information!