1. Consult a certified financial planner. No matter your financial standing, a certified financial planner is a useful member of your divorce team. Your attorney counsels, negotiates, and mediates to protect your interests. A financial planner reviews your finances as a whole and plans for a separation of assets and income. Discuss whether to pay off debts you have incurred or incur during the divorce proceedings.
2. Consult a Certified Public Accountant/Enrolled Agent. A certified public accountant helps you manage your taxes and value your business. Use this information to negotiate a divorce agreement that maximizes your assets and minimizes your tax burden.
3. Separate your accounts. Close your joint accounts to protect your personal finances and so neither party can use money from the other’s account. Open new accounts in your name only. This denies your ex-partner access to any money that belongs solely to you. New accounts also give you the opportunity to divide money up in a way that works best for your future and in accounts that fit your needs. Cancel joint credit cards, and look into other credit card options. As an individual you may have different needs for a new credit card than you had with a partner.
4. Manage your credit score. All of your banking, credit card, and debt information has an impact, directly or indirectly, on your credit score. A good credit score is more difficult to maintain as a single person than as a married couple. Good credit results in better mortgage rates, car financing, and credit card deals. Knowing your credit score is an important step in preparing for an autonomous financial life. Check your credit score easily through a free website if your credit card company, bank, or credit union does not offer your score.
5. Update your will and beneficiaries. Review your beneficiaries. Married couples generally make out wills and name each other as the beneficiary of their estates. When you divorce, change your beneficiary so your former partner does not end up with your financial assets when you die. Contact the attorney who wrote your will to make updates.
Review you retirement accounts and life insurance policies. Update the beneficiary on these accounts as well. Talk to your attorney about setting up a trust for management of your accounts and assets and a means to easily specify beneficiaries. A trust may be particularly useful if your beneficiaries are minor children.
6. Review and change your insurance coverage. You have new living arrangements and different physical assets. Update your coverage for the home and physical assets under your control and responsibility. In some cases, you benefit financially from the split if you have a better driving record, are younger and healthier, or have other low risk factors.
7. Save. When you start your new life, take saving and spending seriously. You don’t have an extra income to fall back on. When you have a secure, well-paying job with extra income to burn, don’t. Save those pennies for retirement or an unexpected payment or that new car you’ll need in a couple of years. Having a cushion of money allows you to be more secure and stable as an individual, increases your credit score, and contributes to a comfortable retirement.
Consult your divorce attorney for recommendations for a certified financial planner and certified public accountant. Share the information gained so your attorney can negotiate your best terms in the divorce.
What To Do Next:
Experiencing a family law issue can be overwhelming and stressful. Knowledgeable family attorneys do much more than represent clients, they understand how choices made in the legal process can drastically affect life afterwards.
Sandra F. Banks offers clients a No Hassle Family Law Strategy Session to make sure every client gets guidance on how to achieve a stable, secure and happy future.
What’s more, if I’m not the right attorney for the case, you have my commitment that I’ll point you in the right direction. Just call my office at 510-336-2369 to schedule.