A major consideration when it comes to divorce proceedings is financial concerns. Who gets what? Do we need to sell the house? Alimony? Child support? These are all questions that go through divorcees minds, and for good reason. So what should people do to safeguard their own interests? This week we are listing financial tips to keep in mind when approaching or going through a divorce. Read on to learn exactly what should be at the front of your mind concerning your finances and divorce.
Keep Calm And Don’t Be Rash
A divorce is an emotionally tumultuous time for people, so it is easy to make snap decisions. One of the best financial tips we can give you is to take a deep breath and think before making any big financial decisions. If you have legal questions, consult your lawyer.
“Revenge spending” happens if a divorce case is particularly bitter. One partner will empty a shared bank account in order to keep the money away from the other. Usually, the partner that does the revenge spending is the partner who did not make the decision to file for divorce. Unfortunately, the spending just damages everybody’s financial situation.
Think About Mediation Instead Of Traditional Litigation
Traditional divorce is an expensive process so many couples are opting for mediation nowadays in order to save money. If the proceedings get ugly enough, a judge can issue an order to liquidate all assets and split the proceeds a certain way. To most people, the mediation option is much better. The two spouses have the option to split things the way they want to. When the assets are just signed over, it also shortens the process of divorce. Mediation prevents divorce proceedings from dragging on as well as preventing the bills from piling up.
Don’t Forget The Long Term Plans You Made
When divorces happen, most people are focusing on getting out of the proceedings as quickly as possible. Unfortunately, that often leaves a few threads unaccounted for. Two major long-term financial commitments that people tend to make are life insurance and retirement plans. Both of these tend to be neglected in a divorce.
For life insurance, it is smart to review your plan and re-evaluate who the beneficiary is. For example, if you have children, you may want to list them as beneficiaries rather than your ex-spouse. Additionally, you may want to just change your plan in general to adjust the payout or the payout structure.
In addition to life insurance, divorcees need to consider their retirement plans. These plans can be divided without distribution. This process maintains the benefits of the original account while simultaneously detangling you from your ex-spouse. Communicate with a financial planner and your lawyer to make sure that you fulfill this process carefully.