Thinking about Divorce? Can't-Miss Financial First Steps
Considering divorce? Emotions can cloud your financial decisions and result in costly mistakes. Kim, a Zoe Certified Advisor, walks you through key steps.
Published April 20th, 2020
Reading Time: 3 minutes.
The words separation and divorce come laden with emotions. Positive, negative, confusing… going through a divorce feels like an emotional whirlwind. Not only are you doing your best to move forward daily, you are also thinking about the future and how to find order, as many elements of your life change.
Although the particular details and circumstances that come with separation and divorce vary from couple to couple, it is helpful to remember you are not alone. If, for example, you’re the spouse who has not been as closely involved in the financial aspects of your home, it may feel as though you have to “start from scratch.” Nonetheless, planning your financial future post-divorce can feel empowering, instead of overwhelming, if you prepare thoughtfully along every step of the way.
When beginning to consider a divorce, the first step is to assess the situation. Start by asking yourself how you will continue to afford your life and lifestyle both during and after the divorce. Due to the stress of the situation, individuals often forget they must also establish a plan for how they will handle their finances, including where they will live, during the process of separation and divorce.
Needs, Wants, Wishes
Kim C., one of Zoe’s Certified Financial Advisor, recommends “focusing on the three most important aspects in each category. it can help gain clarity for both you and your ex-partner.”
Make a list of the three most important must-haves that you need out of the divorce, the three things (large or small) that you want from the divorce, and three things that would be nice to have.
Think about what your spouse needs and wants, as well. Doing so will help define the best possible way for it to be amicable and a win-win situation for all involved.
The Right Experts
Carefully selecting the team that is going to assist throughout your divorce process is crucial. In any separation or divorce process, the five experts to have on your side are:
- Certified Public Accountant (CPA)
- Mental Health professional
- Divorce Financial Advisor
You will be looking for expert professionals who can excel in providing you with experienced insights while facilitating cooperation, communication, and mediation. These professionals will be working together closely to develop the very best solutions for you, so be sure to calmly and carefully evaluate their experience, credibility, and style.
The “In” Spouse or the “Out” Spouse
As the “in-spouse”, you ́ve been managing your marriage’s financial life. Thus, you likely already have the experience and professional relationships to transition to single life. In this case, be sure to verify that the experts on your team are aligned with your needs, wants, and wishes. Additionally, consider if your current financial advisor will be the right fit for the more nuanced and time-intensive divorce process. You’ll want someone who has experience with people in your similar situation.
If you are the “out-spouse” you are the spouse who is starting from scratch. You are likely to be the one who does not have a relationship with the family attorney, accountant, or financial advisor and thus do not have full knowledge of the existing assets, insurance plans, or monthly budget;If this sounds like you, it is particularly important to find experts and advisors who will thoughtfully help you plan and advocate for you.
Crucial First Steps
The Divorce Planning Checklist will be helpful resource for you during this process. Crafted by Zoe Certified Financial Advisors experienced in planning for divorce and divorcing couples, it will guide you through the crucial fist steps.
The Divorce Financial Advice series includes articles discussing everything you want to keep in mind, such as key first steps like protecting your valuable jewelry and to the importance of setting up a personal P.O. At this early stage of your divorce planning, gathering all of the financial information (income taxes, tax returns, proof of spouses employment income W2 or 1099…the debts, the real state records) can also be hugely helpful in case access gets cut off in the future.