Divorce is typically cited as one of the most emotional challenges a person can face during their lifetime. Your divorce is likely to influence your personal and professional life and your financial status for many years to come. If you are concerned about the financial impact of ending your marriage, it’s essential to keep a few things in mind as you head into the final stages of your divorce.
There is no one-size-fits-all strategy for revamping personal finances after divorce. Every divorce case unfolds differently, and every individual will have unique needs and concerns when it comes to adjusting to life after divorce. However, a few best practices are potentially beneficial to anyone coming out of a difficult divorce. These essential tips can help you prepare yourself for your new single lifestyle and can potentially lay the groundwork for a more prosperous future.
Secure Legal Counsel From a Reliable Attorney
It’s natural to have many concerns about your future after divorce. Ultimately, the best thing you can do to assuage these concerns and ensure the best possible outcome to your divorce case is hiring an experienced divorce lawyer to represent you. Of all the assets you want to have on your side during a divorce, legal representation you can trust is perhaps the most important. Unfortunately, the average person with no legal experience is likely to make critical errors during divorce, sometimes with disastrous effects.
A good attorney can not only guide you through the divorce process with confidence but also provide responsive advice throughout all your proceedings, particularly if you encounter unforeseen obstacles at any stage of your divorce. For example, when it comes to your personal finances, your property division determination is contingent on your financial disclosure, and you may not know how to secure all the documentation you will require for this stage of the divorce. Your attorney can help you gather all the materials necessary for ensuring a fair and reasonable outcome to property division, which in turn helps you foster a healthier financial status for yourself in the next stage of your life.
Take Financial Disclosure Seriously
One of the worst mistakes anyone can make in divorce is lying on their financial disclosure statement. While the thought of sharing some of your assets with your soon-to-be ex-spouse may be unconscionable to you, the reality is that you must abide by state law when it comes to property division in divorce. Your financial disclosure statement must be submitted under oath, meaning you must testify that the information and records contained within your state are complete and accurate to the best of your knowledge. Intentionally hiding assets is equivalent to lying under oath. If your actions are discovered, and they are likely to be, you could face contempt of court or even a criminal charge for perjury.
It’s essential to provide accurate information with your financial disclosure and be as thorough as possible in gathering the documentation you must provide to the court. If you are having trouble securing the records and documentation you need, consult with your divorce attorney, and they can assist you. In addition, if you suspect your spouse has hidden assets in their own financial disclosure statement, your attorney can help you explore potential remedies to this situation. This may include consulting a forensic accountant or other financial professional to conduct an expert review of you and your spouse’s respective financial records to discover any obfuscation.
A properly conducted financial disclosure process may not seem fair in light of the personal tensions that might exist between you and your spouse, but ultimately this is one of the best ways to preserve your financial future. In addition, when you work with complete and accurate information in the financial disclosure phase of divorce, you are more likely to reach a positive and agreeable outcome to property division.
Develop a New Personal Budget
Once you finalize your divorce, your financial situation is likely to change dramatically in multiple ways. It may take some time to acclimate to these changes, but instead of feeling daunted by your new financial concerns, you should take this as an opportunity to overhaul your personal finances. For example, you may need to account for child support or alimony payments to or from your ex, and you now have a whole new set of personal living expenses to manage on your own.
Developing a new budget is a great first step to take after a divorce. This process is not only critical for ensuring a healthier financial future, but it can also be cathartic after a difficult divorce. Taking responsibility for your own finances and developing a personal budget can be an empowering experience that helps you reorganize your priorities.
Revisit Estate Plans
An often-overlooked issue following divorce is estate planning. If you have any estate plan in place before divorcing, that plan likely includes details that pertain to your marriage and your ex-spouse. For example, you may have your ex listed as a primary beneficiary on multiple accounts, and some accounts may have been adjusted or liquidated during the divorce process. Since your divorce has likely shifted your financial priorities in multiple ways, it is crucial to revisit your estate plan after divorce and make necessary adjustments.
Your divorce attorney can refer you to an experienced estate planning lawyer or other resources to help you develop a new estate plan that accurately reflects your new circumstances. Additionally, you will need to investigate individual accounts such as your employer-provided life insurance policy, auto insurance policy, and any other accounts with beneficiary designations. Some people mistake adjusting their estate plans to eliminate their ex-spouses as beneficiaries but forget to ensure these new beneficiary designations align with the designations in place for individual accounts.
Ultimately, your divorce is likely to change your life in many ways, and your personal finances are one area that absolutely deserves the utmost care and attention after finalizing a divorce. If you are unsure what aspects of your financial life require the most adjustment, consult your divorce attorney about your concerns and start working toward a healthier, independent financial future.