If unhappiness describes the general mood of your marriage and you know that divorce is the only answer and is coming down the pipe, its time to get on your game face. Have you given much thought to your finances? It’s time.
Two experts in the subject, a Georgia lawyer who has been divorced and a certified financial planner who founded the Institute for Certified Divorce Planners, offer financial survival tips for the transition from married life to single life.
These aren’t stick-it-to-your-spouse tips. Rather, they are suggestions for what to do before the papers are filed, with the goal of easing the financial impact of the transition from wedlock to singlehood.
When divorce isn’t a surprise, there’s some preparation time.
Above all you need to keep your emotions out of your financial decisions. Its easier said than done, however. Think clearly and calmly otherwise, you’ll forget to do the most basic things, like copying important financial documents. One thing that you must do is to get copies of every financial record you have. Get copies of statements of every kind of account you have. That includes money markets, 401(k)s, pension statements, certificates of deposit, checking accounts, the works. These papers verify the value of assets that a married couple holds. Then make a budget for the new you.
With divorce, there’s going to be a change in your income and your expenses. The expenses aren’t going to go down at the same rate that the income does. I tell clients to do a budget so they’re not left hanging when it’s time to find the money to pay for a rental deposit or the like. If you don’t have a lot of cash money, you should consider doing things to get back on your feet like renting furniture, leasing a car — it’s not as substantial as buying but you can ease yourself back into the flow of having to live within a budget.
Oftentimes financial situations occur where one party is listed as an authorized user — not a co-signer — on the other party’s credit card. The one spouse declares bankruptcy before the divorce and then the other spouse’s credit rating is damaged so much that they cannot get a mortgage to buy a house.
The moral of the story is this: Make sure that you and your ex-to-be divide your accounts. If you have joint credit cards (in which both of you are responsible for payments), call the issuer and get separate cards. If you’re an authorized user of your spouse’s card, get the issuer to remove you. Do the same if your spouse is an authorized user of your card.
Then it’s time to ponder death. Not your spouse’s… yours. Its time to revise your will, powers of attorney, trusts, and designated beneficiaries for Social Security and life insurance, and time to review tax withholding because, potentially, you’re going to get stuck with fewer dependents.
All of these suggestions might seem obvious, but they aren’t to people going through the emotionalism of a pending divorce.
Divorce isn’t usually the time when people are at their most clearheaded. If you are facing a divorce, its important to keep your heart and your head separate and get your head in the game to protect yourself down the road! It is also incumbent on your attorneys or CPAs or whoever’s advising you to steer you in the right direction.
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