Divorce can be a difficult and emotional process. And because each one is unique, no one can ever fully tell you how to prepare for a divorce. But it’s important to take steps to protect your financial future during this time. In this article you will gain tips on how to prepare for a divorce to help protect your finances.
Tip #1: Gather Financial Documents
Before you begin the divorce process, gather your financial documents. These documents may include bank statements, tax returns, and investment and retirement account statements. This will help you get a clear picture of your finances and make it easier to divide assets during the divorce.
Tip #2: Create a Budget
Once you have a clear picture of your finances, create a budget to help you manage your expenses during and after the divorce. And depending on your gender and age, you may experience a significant decrease in your standard of living post-divorce, according to AACFL.org, January 13, 2022. A budget will help you avoid overspending and ensure you have enough money to cover your living expenses.
Tip #3: Protect Your Credit
During a divorce, it’s important to protect your credit. With guidance from your attorney, close joint credit accounts and open individual accounts in your name only. This will help you avoid being held responsible for your ex-spouse’s debts.
Tips #4: Update Your Estate Plan
After a divorce, it’s important to update your estate plan to reflect your new circumstances. This includes updating your will or trust, power of attorney, and beneficiaries.
Tip #5: Consider Speaking with a Financial Advisor
A Financial Advisor can help you navigate the financial aspects of divorce. This may include dividing assets and creating a post-divorce financial plan. A Financial Advisor can also help you understand the tax implications of divorce and help ensure you’re making informed financial decisions.
Divorce is a difficult and emotional time. While you cannot fully know how to prepare for a divorce, you can help minimize the impact by protecting your finances. Taking steps to protect your financial future can help ease the pain of divorce.
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Georgene Collins, RICP®, RN, PhD, MBA is a registered nurse turned Financial Advisor at Airey Financial Group. Georgene helps other nurses take control of their finances and prepare for retirement. Georgene began her career with Airey Financial Group in 2017 after retiring from 30 years in healthcare.
Georgene holds the Retirement Income Certified Professional (RICP®) designation from The American College of Financial Services. She holds health and life insurance licenses and a long-term care certificate in Indiana and Illinois. Georgene is a Registered Representative and Investment Advisor Representative and has earned the FINRA Series 63 and 65 registrations.