How to Prepare Financially for Divorce | 6 Things You Should Know

How to Prepare Financially for Divorce | 6 Things You Should Know

Divorce can be a long, complicated process and it requires careful preparation. Equipping yourself with knowledge, tools, and preparation can help to ensure that the outcome will preserve your financial future.

1. Take Inventory of the Assets you Share  
– A common mistake made during the divorce process is not having a complete picture of your financial situation.

– The most important document you will file in a divorce proceeding is the financial disclosure statement. It lists the income, assets, expenses, and debts of each person involved in the divorce and is submitted to the court. As soon as divorce becomes undeniable, begin taking inventory and getting organized. Being unprepared can lead to unfortunate consequences.

2. Run a Credit Report to See all Accounts that are Held Jointly 
– Each party on a joint account is equally held responsible for the debt. If you have a joint credit card and your ex runs up the balance but didn’t pay it off – this affects your credit just the same. Be sure to update deeds to your home and automobiles after your divorce is final.

3. Update your Beneficiaries and Legal Documents
– This is one of the most important things that you can do after a divorce. You will need to make sure that any 401(k), IRA, Roth, Annuities, Life Insurance, Long Term Care Insurance, Pensions, or other beneficiary-driven accounts have the beneficiaries updated.

4. Calculate the Cost of your Health Insurance

5. Overlooking the Cost of Divorce 
– Divorce can get expensive. I’m talking thousands of dollars expensive! Think about legal fees, filing fees, mediation, child custody, increased tax brackets when filing single, therapist bills, etc. Create a plan for how you will pay for these expenses.

6. Dream Again
– Divorce is the end of one chapter and the beginning of another. Your life is not over. Take time to dive deep within yourself and determine what you desire for yourself and your children. Take good notes. Allow yourself to dream again!
At Timewise Financial, we offer more than just money management by helping you define a clear purpose for your future and implement a carefully crafted financial plan that gives you the financial confidence you need to live your meaningful life. If you partner with us, you’re not just investing in growing your money, you’re investing in becoming a better version of yourself as well! Interested in learning more?

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