Seven Things to Remember When Managing Your Finances During a Divorce
Stress can affect a person’s ability to think clearly, and one of the most stressful circumstances some will ever experience is a divorce. If you are in the process of filing for a divorce, although it may be challenging, it is crucial that you put emotions aside to focus on important matters such as your financial affairs.
Here are some things you should do to ensure you make wise financial decisions when going through a divorce:
1. Understand your finances
Before your divorce is finalized, ensure you know your cash flow with regards to your income and all your expenses. You must assess, group and prioritize your spending and evaluate how any potential settlement could affect your finances.
2. Focus on real assets
Often couples fight over assets that do not hold any real value outside of an emotional connection. Instead of focussing on such items, concentrate on assets such as real estate, stocks, investment accounts and other growth assets. These assets can go a long way in helping you to maintain your quality of life in the difficult times you face after your divorce.
3. Never rush big financial decisions
As soon as you file for divorce, you may be tempted to start closing accounts and opening new ones right away. However, that might not be the best move. It is wise to consult your financial advisor and your divorce lawyer before making any decisions that could have a lasting impact on your finances. Let them work with you to determine what needs to be done right away and what decisions require careful consideration.
4. Do not overlook retirement accounts
If you and your spouse have joint retirement accounts, do not forget about these accounts can be divided. If the accounts are split correctly, the funds do not need to be paid out to be shared, which means you will be able to preserve the tax and interest benefits of the original accounts. So, be sure to discuss your options with your financial planner.
5. Plan for the future
After divorce, your cost of living will increase since instead of sharing expenses with another person, you will have to take on financial obligations alone. Furthermore, depending on your situation, you may have added expenses such as spousal and child support. When planning, these are all things you must bear in mind.
6. Prioritize the needs of your children
Take some time to consider every imaginable expense that may arise in your child’s life. Ensure you and your soon-to-be-ex have a plan in place to address who will cover what costs. If your spouse will be paying child support, proper planning can ensure you request the right amount.
7. Remember life insurance policies
Do not forget to update your insurance policies. Allowing your ex-spouse to remain as a beneficiary on your life insurance plan can complicate matters if you need to change or leverage your policy. Also, you may not want your ex-spouse to be the one who benefits should something happen to you.
Do you need help making financial decisions during your divorce?
If you need guidance to make the right financial decisions in your divorce, the experienced Toronto divorce lawyers at Baker and Baker Family Law can help.
At Baker and Baker Family Law, we understand that no one plans for a divorce when they get married, and we know how difficult the process can be. That is why our legal team is there to help you get through the life changes that come with a divorce. We will give you advice on how to manage your finances and will work with you to divide joint assets and settle other matters.
So, what are you waiting for? Give us a call today to schedule an appointment with one of our Toronto divorce lawyers.