When experience matters, don’t leave your future to chance.

Photo of Professionals at JMG, PLLC
Photo of Professionals at JMG, PLLC

When experience matters, don’t leave your future to chance.

Understanding the financial implications of divorce

On Behalf of | Jul 28, 2022 | Family Law |

Filing for divorce is a big decision. If you decide to do this, there are many factors to consider.

While your focus may be on the present and ending a marriage that no longer works for you, it’s important to keep financial issues in mind. This will help you avoid problems down the road.

Create a long-term budget

It’s important to understand your long-term living costs. Add up your expenses for one to three months to know what to expect. This information is beneficial when it is time to negotiate support payments and a divorce settlement you can live with. If you have children of who you will have sole custody, this is even more important.

All the potential costs related to your life and needs must be known before starting your divorce negotiations.

Get to know your assets

Your marital assets aren’t all created the same. For example, your joint retirement account that will be taxed at some point isn’t worth as much as a savings account with $100,000. Even having this much in home equity isn’t the same as cash in the bank. Be sure you consider this as asset distribution begins. Knowing the true value of your assets will help you get a fair settlement in your divorce.

Update your estate plan

When filing for divorce, you also need to update your estate plan and remove your spouse’s name from being a beneficiary for your will, life insurance and other documents. Don’t forget about this step.

Protecting your financial rights in a divorce

If you are filing for divorce, it’s smart to know what financial issues you may deal with. This will also help you protect yourself and your family for the foreseeable future by getting a fair divorce settlement.