If you are going through or preparing to go through a divorce, you likely know that money plays a big role in the “uncoupling finances” process.
There are joint bank accounts to consider, joint credit cards, the marital home and other fiances you may own jointly.
How long you were married likely will impact just how much of your financial lives have become entangled. Now comes the hard part: Untying those knots and moving on while still having peace of mind that you won’t end up in the poor house.
Unless you are in the very early stages of the divorce process, you likely have either canceled or suspended your joint bank and credit card accounts. If not, do so immediately. There’s nothing worse than finding that your ex has either withdrawn money from a joint bank account or racked up credit card charges. Many people don’t know it, but if their name is on the account, regardless of who made the charges, they will be held financially responsible.
Because you don’t want to be left up the creek with out a credit card, you might want to apply for new ones pronto. This will give you a way to pay the bills should you find yourself short on cash. You also will need to open a new bank account. Do it sooner rather than later in case you run into credit issues.
Check your credit score on a regular basis to make sure you are in good standing. During this time you may have to find a place to stay or purchase other big-ticket items and you don’t want to find out from a landlord or salesperson that your credit is questionable.
Make sure you have a financial safety net. If possible, put aside several months worth of money to pay for your everyday living expenses.
Update any insurance you may have – whether it’s car, homeowners, or even medical insurance – to make sure you remain covered. Also, your assets likely will be diluted during the divorce, so make sure you are not paying for insurance on items you no longer own – i.e. jewelry, electronics, etc.
If you have savings accounts such as a pension, 401(k), or life insurance, make sure that you change the beneficiary. If you have a living trust or will, name a new beneficiary. In that same vein, now is a good time to revisit you estate plan and make sure you update your power of attorney.
You are likely going to be living in a new financial world, and that calls for a new budget. Take a look at how much you are going to need to live on your own, i.e. daily living expenses, as well as what kind of money you will need as you head into retirement.
If you decide not to keep your married name and go back to your maiden name you will need to contact the Social Security Administration and update your information.
If you are the one who is moving out of the marital home, make sure you file a change of address with the post office. But don’t rely on the postal service to get it right; it’s important that you go through all of the bills you pay and make sure you notify each company personally of the change. Not getting a bill is not an excuse not to pay it.
Divorce can often be a long, complicated and emotional process. It’s important to make sure that you have all of your finances in order. Doing as much as you can in the beginning will help to ensure a better settlement once the divorce is finalized.
It’s never a good idea to try to go it alone, hire an attorney and financial planner to help you determine the best options for you.
Lori Barkus is a Florida Supreme Court Certified Circuit Civil and Family Law mediator and guardian ad litem. She handles matters relating to divorce, custody, child support, paternity, collaborative divorce, adoption, parental rights, and family law and civil mediation.
Ms. Barkus is a cum laude graduate of the University of Miami School of Law. She is admitted to practice in Florida, Georgia and the District of Columbia, as well as in the Southern and Middle Districts of Florida and the Eleventh Judicial Circuit Court of Appeals. She is also a member of Leading Women for Shared Parenting.
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