If you’re going through the big D and it doesn’t mean Dallas, there’s understandably a lot on your mind and your proverbial plate.
Whether you’ve been with someone one year or 25, divorce can put an immense amount of stress on an individual for several reasons including the financial details that need to be taken care of in order for your split to be official and over with for good.
There are four major categories of an assessment of your assets when you are considering or going through divorce:
- Expenses
- Income
- Assets
- Liabilities
While the number of years you are married may impact how entangled your finances have become, it’s important to take a realistic stock of your financial assets in these categories as you begin your uncoupling.
Debt does not disappear when your marriage dissolves. Consider paying off credit cards and mortgages before your divorce to ensure that one spouse does not plunge your credit into the ground due to non-payment on a debt that is shared.
In most states, you are unable to change your beneficiary on any retirement accounts until a divorce is final. If your former spouse is still listed as your beneficiary after your divorce, they are entitled to the benefits in the event of your death, even if you have specified a new will. Amend your trust. If you have a revocable living trust, you should look into changing this as soon as you can, and to keep in mind provisions for child care and asset management for any children, if any.
If your children are entitled to assets in your trust, appointing a new trustee will ensure that in the event of your death your spouse, as their guardian, will not have sole access to all assets within the trust.
Remember that when dividing financial assets like retirement accounts, tax consequences are different for different assets! Keep this in mind when deciding what does and does not get allocated to your spouse in the event if your divorce.
Above all, be sure to revisit your asset management plan in full once your divorce is complete and finalized. As your life is taking on an significant change, the above are all temporary measures to protect yourself and your assets while you’re going through divorce.
It is highly recommended to seek the advice of a trusted Estate Planning attorney or Certified Divorce Financial Analyst (CDFA) to certify you are completely covered financially through and after your divorce.
Reference: divorcesource.com “Tips for Organizing Your Finances Before Divorce”
Kyle Robbins
Kyle Robbins is the founder and sole owner of The Law
Offices of Kyle Robbins. He received his J.D. with honors from the University of Texas School of Law and his B.S. in Food Chemistry and Microbiology from Oklahoma State University.
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