By: Joe Delaney
If you’ve recently been through or are going through a divorce, it’s natural to feel wounded. Your life was once built around another person, the one on which you now cannot rely. That not only hurts, it’s bewildering. The experience often stops people in their tracks as they wonder what went wrong and what they’re going to do. You may be experiencing this right now.
It is absolutely vital that you take some practical steps immediately to protect yourself from further, unnecessary pain down the road. You may not want to think about it, but like it or not, finances are tied to your mental, physical and emotional well-being.
Step 1:If applicable, plan the terms and timing of your divorce. Maximize the community assets to which you can lay partial claim by waiting for new income, such as your spouse’s bonus or pension vestment. Plan whether either of you will be staying in the house, or whether you’re selling and splitting the profits. If you have children together, you must decide with which parent they will live, and to what degree each parent will be responsible to provide for their needs.
Step 2:Assess your financial situation. Determine what your assets and income streams are. Take a complete inventory that includes, but is not limited to:
- Salary and business income
- Bank and brokerage accounts
- Real estate, alternative investments and personal property
- Cash value life insurance
Make a liberal assessment of your expenses as an individual. Beyond regular expenses such as mortgage payments, insurance premiums, taxes, etc., factor in irregular expenses that have become a part of your life:
- Attorney fees
- Accountant consultation
- Mental health counseling
Step 3:Complete the financial separation from your spouse. Make a list of every asset document from which you need to remove your ex-spouse’s name. This list includes, but again, is not limited to: wills, trusts, 401ks, IRAs, loans, insurance policies, mortgages, and vehicle registrations. Where appropriate, name a new beneficiary on these documents now before the possibility of something happening to you.
Step 4:Build a sound financial plan around your new lifestyle. Your standard of living is likely not what it once was with dual income and shared assets. If you completed the above steps, then you can see it plain as day. Now you have to deal with this reality and do all you can to make your future secure (not only for yourself, if you have children). This is where consulting a financial professional is critical, because a trusted advisor can help you create a plan that removes the anxiety of not knowing what will happen to your money.
If you’re still reading, this article is probably about you. Please consider contacting Lifeguard Wealth to learn about how we can help you down the path to peace and stability in the next chapter of your life.
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