Handling Your Finances During Divorce
With emotions running high at this time, thinking about the financial aspects of divorce is a delicate matter, and one we often try to hide from.
The “we” and “us” in the finances now become a “me” and “mine”, and it becomes crucial for you to go through all of the possible implications of the finances before the Divorce becomes finalized.
Whether you believe that money is 'the route of all evil' or that in fact money really does 'grow on trees', money is likely to be a hot topic of discussion during any couples Divorce proceedings!
One of the main financial aspects of Divorce is budgeting daily finances. Since now there will often be two households, two mortgages, and two sets of bills where there was once only one, you and your spouse should carefully plot out your finances.
If managing money is not your strong point – ENLIST SOME HELP. Ask a family member or friend that you trust and who is good with their own financial affairs for their assistance in helping you to understand your situation.
Do not agree to any settlement without taking legal and financial advice.
If necessary, take this opportunity to seek impartial financial help through an IFA (Independent Financial Advisor).
This would also be a good time to think about accounts you opened in both of your names - credit cards, personal loans, car loans etc. Decide how you are going to split these bills or monthly payments until the divorce is finalised and additionally who will take over the loan long term or will it be settled somehow.
Do not forget to factor in Alimony or Child Support if it is to be paid. This is usually paid weekly or twice a month as agreed upon in your Divorce terms. As single working parents you may be actually having a struggle at the outset to make ends meet and this is not uncommon in the early days.
Other monetary aspects to consider during your Divorce are the tax and credit implications that your marriage dissolution will have. If you plan on selling the house and dividing the proceeds you may actually receive a tax break. Check with a Tax Attorney or Accountant to be sure how your specific divisions will work out & affect you directly.
Your credit rating may actually surprisingly improve after your divorce, depending on the status of your spouse, particularly if they were poor at managing their overall cashflow. It is important to keep your credit score strong during this time of transition, as what you do in these highly emotional times may have lasting implications on your credit score.
Try not to embark on too much ‘Retail Therapy’ to drown your sorrows and dull your pain – address the real emotional issues which cause you to overspend and get help for coping day to day and try not to put your credit cards under any extra pressure at this time!
In the UK, as of 2000, the spouse with the strongest pension can be ordered to share that pension with the other spouse. You also may want to consider endowment policies and whether or not you want to cash them in. Remember, all of your financial holdings should be disclosed during the divorce. Secrets and non-disclosure is illegal and can be truly damaging as they are usually found out.
Along with your divorce also comes an end to all that you held together with your spouse, especially in terms of insurance and other protection needs.
- Does your spouse cover you on his or her health plan?
- What about vision and dental cover?
- How are the rest of the family members covered?
- What about home and vehicle insurances?
- Do you hold a joint travel policy? It will probably be necessary to delve into each of these areas fully to ensure that you and your children are adequately protected during and after the divorce.
Although it may seem morbid but this is also the time to think about your new Will requirements, especially if children are involved. This should be done as a PRIORITY after the property has been divided.
Remember, if you are making decisions about your children, make sure you let the spouse without primary custody in on your plans.
Understanding financial the aspects of contested or uncontested divorce in Pennsylvania will help to ensure that and you & your family are not struggling day to day with just managing to survive.