There are lots of important decisions to make during divorce. However, decisions regarding your assets and how to split them are often the most challenging.
That is why financial planning is so crucial leading up to your divorce. Here are a few things to keep in mind if you are thinking about ending your marriage.
Take a long-term view of your finances
It is natural to want to retain ownership of the home you worked so hard, but consider if you are financially able to do so. If you are requesting child support, think about costs now and in the future. The goal is to achieve financial stability for yourself and your children, which requires comprehensive planning and negotiation.
Be knowledgeable when it comes to asset division
Asset division is not always cut and dried. If you have a retirement account with your ex and want to make an early withdrawal, you must pay a fee to do so. There are also tax implications to consider, as they can greatly reduce the number of assets you receive. When dividing assets, keep additional fees and taxes in mind to ensure the process is fair and equitable.
Make sure you change documents as needed
Divorce can also affect estate planning when you do not make the proper updates. For example, if you do not update the information on a life insurance policy, your ex-spouse will remain the designated beneficiary. Keep in mind that beneficiary designations on insurance policies and retirement accounts overrule directives within your estate plan. As a result, you should review documents and make the necessary changes soon after your divorce.
While financial changes are unavoidable, many people experience greater stability after divorce. You can now rest easy knowing you are in full control of your financial future.