A few months ago, I met a woman at a networking event that I wish I had met 10 years ago. Her name is Heidi Bee, and she is a divorce planner. She coaches women during all stages of divorce using tools and support to help them make a comeback to become stronger, happier, and healed. Divorce by itself is so hard and lonely. It doesn’t help that the stigma of being divorced is still so negative, especially for women. I would’ve loved to have had that kind of support from someone who not only understands and empathizes, but who could’ve also guided me out of it.
We ended up having lunch together and immediately bonded over our divorce trauma. Because of my respect for her and my great appreciation for what she does, when she asked me to share my story on her podcast, I couldn’t turn her down even though I had some deep fears and concerns. I ultimately decided if my story can help any woman not feel so isolated in her pain, than this is the least I can do.
After the podcast, I was so inspired by the way Heidi has taken her own heartache and turned it into hope for other women. It made me want to do the same. But I am not a life coach. Life advice is not something I should be doling out to anyone! What I can do is let you know if you’re thinking about divorce, or you’re in the middle of divorce, there are financial considerations you have to think about. It’s hard because most people are so stuck in the emotional aspect of a divorce, but if you want to protect yourself, these are some items you need to address:
- Property Division: Determine how marital assets and debts will be divided. This can include real estate, bank accounts, investments, vehicles, and more. Consider the value, ownership, and contribution of each asset or debt during the marriage.
- Alimony or Spousal Support: If one spouse is financially dependent on the other, alimony or spousal support may be awarded. Consider factors like the length of the marriage, earning capacity, and financial needs when discussing potential support payments.
- Child Support: If there are children involved, child support is usually a significant consideration. It's important to understand your jurisdiction's guidelines for calculating child support based on factors like income, custody arrangement, and the children's needs.
- Child Custody and Visitation: Deciding on a custody arrangement that is in the best interests of the children is crucial. The custody arrangement can also impact child support and the financial responsibilities of each parent.
- Tax Implications: Divorce can have various tax implications, including the tax status of alimony, the claiming of dependents, and the division of certain assets. Consult a tax professional to understand how your divorce will affect your tax situation.
- Retirement Accounts and Investments: Consider how retirement accounts, pensions, and other investments will be divided. It's important to understand the tax and penalty implications of withdrawing funds from retirement accounts early.
- Debt and Liability: Address how joint debts, such as mortgages, credit card debt, and loans, will be divided. It's important to clarify who will be responsible for each debt moving forward.
- Health Insurance and Benefits: Determine how health insurance coverage will be handled after the divorce, especially if one spouse was covered under the other's employer-provided plan. Also, consider other benefits like life insurance and retirement benefits.
- Post-Divorce Budgeting: Create a post-divorce budget that reflects your new financial situation. Consider changes in income, expenses, and potential adjustments to your lifestyle.
- Educational Expenses: If there are children, discuss how future educational expenses, such as college tuition, will be handled and divided.
- Valuation of Assets: Obtain accurate valuations for all assets, including real estate, businesses, and personal property. This ensures a fair division of assets.
- Legal Fees and Costs: Understand the legal fees and costs associated with the divorce process. It's important to budget for these expenses and discuss how they will be covered.
- Negotiation and Settlement: Consider the financial implications of various settlement options. Balancing your financial needs with potential legal costs and emotional well-being is crucial.
- Financial Independence: Plan for your financial independence post-divorce. This might involve securing employment, updating financial accounts, and establishing credit in your own name.
- Updating Estate Documents: Update your will, trust, and other estate planning documents to reflect your new situation and ensure your assets are distributed according to your wishes.
Navigating the complexities of divorce isn't one-size-fits-all. While I've outlined some key financial points, remember there's a vast landscape out there. To truly pave a path that's tailored for you, partnering with experts like family law attorneys and financial advisors is crucial. If your mind starts buzzing with questions about any of the financial elements mentioned or even just a general curiosity, please don't hesitate to reach out directly to me at Jennifer.Jenkins@Bluestonewp.com. I'm here to guide, support, and ensure you're making informed decisions every step of the way.