Getting divorced is a very emotional process, and people often make financial mistakes that can haunt them for the rest of their lives. If you are thinking about filing for divorce or in the midst of negotiating a settlement, be sure to keep the following points in mind:
- Not having a firm grasp on your pre- and post-divorce expenses and not asking for enough spousal support, or any spousal support.
- One spouse keeping the house even though he/she can’t afford the related expenses.
- Not completing the QDRO before the divorce is final.
- Not taking out a life insurance policy on the spouse paying the alimony so that in case he or she dies, the recipient will still get the support. The recipient should also be the owner of the policy.
- Failing to update wills and estate planning documents and forgetting to change beneficiaries on retirement plans and insurance policies.
- Not copying all pertinent records including birth certificates, social security cards, and the like before leaving the home.
- Failing to ensure that you have access to all bank accounts, safety deposit boxes and the like, before serving the other party with your divorce petition.
- Dividing a stock portfolio down the middle without checking for losses or gains, which can trigger either a tax break or a big capital-gains tax hit.
- Not sufficiently including insurance planning in your settlement, i.e. the cost of covering assets as they are separated and who is responsible for paying premiums now and in the future when kids are older.
- Failing to review your insurance policies and understanding what is covered and what is not.
To speak to a Certified Divorce Financial Analyst about your financial situation, call 561-686-9604.