While many people focus on the emotional turmoil that can come with
divorce, a divorce can be equally damaging to a person’s finances. In certain
cases, divorce has been known to completely wipe out up to 50 percent
of a person’s assets. While even the most amicable separations will
ultimately result in divided assets and reduced household income, there
are certain things you can do to minimize the damage and stay financially secure.
If you are approaching a divorce, consider the following financial tips:
Start saving: To say that divorce is expensive is a bit of an understatement. When considering
the costs of legal fees, appraising and divvying up real estate, finding
a new place to live, and pursuing therapy for you and your children to
cope with the change, a person can end up spending anywhere between $20,000
to $100,000 during the course of their divorce – potentially even
more if the separation becomes contested. Make sure you have money saved
up to cover these costs and try to eliminate as much debt as you can before filing.
Get organized: In many cases, divorce is often a contest of “whoever has the best
records wins.” Be sure to collect all of your tax returns, bank
statements, credit card statements, investment accounts, retirement account
statements, and information about your monthly expenses. If you see any
suspicious withdrawals that your spouse may have made and any sources
of income that you do not recognize, notify your attorney.
Check your credit report: Credit scores should be reviewed carefully during a divorce. Use this information
to look for any loans or accounts you do not recognize that your spouse
may have taken out. An attorney can help ensure you are not responsible
for any debts your spouse incurred without your knowledge.
Watch what you post on the internet: Any sort of electronic communication can be submitted as evidence in divorce
court and affect the terms of your settlement, including text messages,
social media posts, and emails. Do not post or send anything you would
not want a judge to read.
Do not be too proud to pay or receive alimony: Nobody likes the thought of having to cut a check to their ex every month
after a divorce. With that being said, it is important to remember that
alimony is likely to only be a temporary arrangement, and that payments are tax
deductible for the paying party. Likewise, if your spouse makes more than
you or if you were a stay-at-home parent during the marriage, do not be
ashamed to receive your entitled alimony.
Create a budget and stick to it: Moving forward, you will need a written budget that is based on your new
income and expenses. It is important to remember that just because you
will now be single does not mean that your expenses will be cut in half.
In some cases, costs may actually go up after your divorce, such as insurance
premiums. Be prepared to make some changes to maintain the same standard
Divide things equally: While you may still have an emotional attachment to your spouse, it is
important to remember that you will not have an obligation to take care
of them financially. Do not give them more than you need to or agree to
a lopsided arrangement because you feel like you must. Divide your property
in a way that will not leave you with regrets.
Update your estate plan: Once your divorce has been finalized, it is time to update your estate
plan and beneficiaries. Otherwise, if you should become incapacitated
or pass away, your ex may end up inheriting your assets if their name
is still on the paperwork. This also includes designating a new power
While these tips can help tremendously, by far the most effective way to
protect your finances during a divorce is by working with an experienced
attorney. If you are approaching a divorce or are already knee-deep in
divorce proceedings, Tampa Divorce Lawyer Catherine Real can help ensure
your assets are protected and provide the strong legal support you need
during this time of transition.
Call (813) 867-7936 or
schedule an initial consultation today to review your legal options.