If you have not always been involved in the financial planning and wealth management decisions in your marriage, now is the time to get involved. If you have been involved, then continue that dynamic, and make sure you can answer some important questions. Here are some essential questions you need to answer:
- What are all the assets of the marriage? What are their values? Where are they located?
- What are all the liabilities of the marriage? What are their values? Where are they located?
- What are all the income sources? Are these variable or guaranteed? What are their values?
- What are all of our ongoing expenses? Which are essential, and which are discretionary?
- Where and how are we insured? Health? Home? Auto? Life? And others?
- Who are my current beneficiaries — for assets that pass by operation of law, contract, and trust?
These are just some of the matters you’ll need to be familiar with for a proper understanding of your finances before filing for divorce. By answering these questions, you’ll be more prepared to get the best possible outcome for yourself.
Create Your Own Support System
My mother — like most others — needed a combination of family, friends, and professional advisors to guide her through the divorce process. It goes without saying that a family law (divorce) attorney is essential. Also essential is working with a qualified financial advisor with training in investment, retirement, insurance, tax, and estate planning. Such a financial planner and wealth manager can help give you a better understanding of the following, once you’re on your own:
- What will I require in income when I’m on my own?
- What will be my ongoing expenses?
- Will my investment allocation change now that I’m investing for my own goals, risk tolerance, and time horizon?
- How will I change my retirement plan to reflect my own goals?
- What are the tax ramifications common with divorce?
- What insurance will I still require?
- How should I update my estate plan now that I’m on my own?