Be Proactive About Planning your Post-Divorce Financial Future
Divorce is the legal process of dismantling a marriage, and as such, the divorce process involves many financial decisions like dividing a couple’s marital property and determining whether spousal maintenance is necessary and appropriate. For the individuals getting divorced, the divorce process can be expensive. It also involves individual planning on each partner’s part to ensure that he or she does not face financial hardship after the divorce. Your discussions with your lawyer should cover every financial topic related to divorce, such as the tax obligations that come with certain marital assets and how to divide your retirement accounts through a QDRO. On your end, take the following initiatives to make the divorce process as financially straightforward for yourself as possible.
Completely Sever Yourself from Your Spouse Financially
Before the divorce is finalized, work with your spouse to close all your joint accounts. If he or she is an authorized user on your credit cards, remove him or her from them. You might choose to divide your outstanding credit card debt yourselves by transferring it to two new, separate credit cards. This is also the time to determine how to divide your shared investments.
Determine Your Post-Divorce Obligations and Create a Budget
After your divorce, you will probably be living off just your own income. This significant change in household income warrants a new budget.
In your new budget, consider all the expenses you will face as well as any additional income streams you will have, like spousal maintenance or child support. Remember that if your divorce is finalized after December 31, 2018, your spousal maintenance income is not taxed. For the party paying spousal maintenance, it will no longer be tax-deductible.
Keep considerations like health insurance and divorce-related debt in mind when you develop your post-divorce budget. You might have to find a new insurance provider for yourself about a year after divorcing if you stay covered by your spouse’s healthcare insurance provider through COBRA.
Ideally, you will live for decades after your divorce is finalized. Keep this in mind when you are creating financial plans – your lifestyle needs to be financially sustainable. Your financial planning should also include plans for your late-in-life care, such as how you will afford long-term care if it becomes necessary. Depending on your circumstances, you could qualify for Social Security Divorced Spouse benefits. Discuss long-term planning with an experienced financial planner to ensure that you are fully aware of your options and prepared for life after divorce.
Work with an Experienced St. Charles Divorce Lawyer
If you do not have a financial planner, your divorce lawyer can likely refer you to one from his or her professional network. Once you have determined that divorce is the right choice for you, schedule your legal consultation with an experienced Kane County divorce lawyer to start working on your case. Contact Shaw Family Law, P.C. today to set up your initial legal consultation in our office by calling 630-584-5550.