When dealing with divorce or legal separation, chances are that all parties involved have a lot going on. As stressful as the situation might be, it’s still important to remain aware of the financial considerations of a divorce.
The Division of Assets
It’s easy to get caught up in strong emotions when dissolving your marriage, but a clear head is required to properly divide assets. Not taking measures to fully understand the consequences of a settlement can lead to untold grief and years of stress.
Determining what each party is entitled to is almost never an easy process. You’ll need professional guidance to be able to make sound decisions about who gets what. Unfortunately, there is no one-size-fits-all approach to marital asset division.
Housing Costs
It’s wise to consider your housing situation when going through the divorce process, especially if you suspect that you will need a new place of residence. In many situations with children, their primary provider may agree to live in the former family residence, but that might not be the smartest move financially.
Adjusting to a singular source of income often involves a whole new budget, and a different standard of living. If an agreement can’t be reached about the house, or it’s not possible to maintain on one income, it may be the right time to consider selling.
Financial Independence
If you shared joint bank accounts and lines of credit while married, it’s important to set up your own accounts now that you’re apart. Establishing separate bank accounts helps to protect your access to available finances from your soon-to-be former spouse.
Financial independence also involves eventually taking on the responsibility of filing your taxes as a singular entity. If you have children, you’ll want to come to an agreement about who will claim them as dependents.
Assessing your new income level may be a challenge at first. Transition is often uncomfortable, and sacrifices may be necessary. We can all anticipate that there will be times when unexpected financial curveballs will come our way. For instance, if you’re a beneficiary on your former spouse’s insurance, once your divorce is final you will find yourself newly uninsured. Make sure to consider such factors going forward to ensure your personal needs are taken care of.
Your Financial Future
Walking on your own two feet after going through the intensity of a divorce may require downsizing non-essential financial burdens, or even seeking new employment opportunities. That’s why it’s important to address the financial considerations of divorce sooner rather than later. At Whipple, Mercado & Associates, LLP, we can help you plan for your future after divorce. Contact us at (925) 344-5050 for a free initial consultation.