Divorce and Money: 5 Tips to Help You Stay Afloat
Divorce can be a very difficult time, both emotionally and financially. The life you’re used to is gone, and you must face the future, which will often be filled with some level of uncertainty due to changing finances. Where your family likely was supported by two incomes, your future may only be supported by one, especially if you won’t qualify for any form of alimony or spousal support. If you are going through a divorce, it is important to take steps to protect your present and future financial security as much as possible. Here are five money tips to help you stay afloat during this tough time:
Create or update your budget
One of the first things you should do is sit down and create (or update) your budget. This will help give you a clear picture of your current financial situation and what changes might need to be made. Make sure to include all sources of income you will have access to as well as all expenses, including things like childcare, which could be new or increased expenses depending on your circumstances.
If you’re not used to living on a budget, it may take some time to get used to it. But it’s important to stick with it as much as possible in order to make ends meet. If you are in South Carolina, our family courts require a formal Financial Declaration to be filed at each hearing that deals with any financial matters in the case. You can find a copy of this form by clicking here. This is a great way to design your new budget around the things you know the family court will be consider when making final rulings about your and your children’s financial needs post-divorce.
Review all of your insurance policies
You will want to make sure that you have the proper insurance coverage in place after divorce. This includes things like health, life, auto and homeowner’s/renter’s insurance. You may have been on your spouse’s health insurance plan, but after your divorce is completed, you will likely need to get your own policies. The good news is that under the Affordable Care Act (ACA), you can’t be denied health insurance coverage or charged more due to a pre-existing condition, so you won’t incur the higher premiums we used to see in the past when moving to your own health insurance policy. If you have children, it is important to make sure they are still covered under a health insurance plan as well after your separation and divorce.
You should also review your life insurance policy (or policies) and make sure the beneficiaries are still up to date. You may have named your spouse as the primary beneficiary, but after divorce, you will likely want to change that. The same goes for any auto or homeowners/renters insurance policies you may have. You will want to make sure you are the only one listed on those policies as well and that any personal property that no longer should be included as riders on these policies is removed (i.e., expensive personal property that now belongs only to your ex-spouse and is no longer found in your residence).
Talk to a financial planner
If you don’t have a financial planner, now is a good time to find one. A financial planner can help you set goals and develop a plan to reach those goals. They can also offer guidance on investments, retirement planning, and other financial matters. If you’re not sure where to start, ask your bank or investment firm for recommendations. Your attorney can also provide recommendations, and you should consider including your divorce attorney in your meeting with the financial planner.
If you’ve hired an experienced divorce attorney, they will be able to give you and your financial planner specific advice about your situation and what steps you need to take in order to protect your financial interests going forward. Your attorney will also be able to provide the financial planner with estimates of any lump sum asset payouts you may be awarded at the end of the divorce process. This will assist the financial planner with making a more exact and comprehensive plan for your future that you can use as a roadmap or checklist once the divorce is finalized.
Consider mediation instead of litigation
If you and your spouse are able to communicate and work together reasonably well, you may want to consider mediation instead of litigation. Mediation is a process whereby the two of you engage a neutral third party (the mediator) to help facilitate settlement discussions. The mediator does not make any decisions or rulings; rather, they help you and your spouse reach your own agreement on the outstanding divorce issues.
If you choose to mediate your case prior to filing litigation, it is important that you both have your own divorce attorney present during the session. Your attorneys will provide each of you with advice and guidance based on your particular situation and your post-divorce goals throughout the mediation process. If an agreement is reached, the attorneys will prepare the necessary documents to be filed with the court. Essentially, by the time your “case” is filed, you’ll also be notifying the Court that there isn’t any need for contested hearings on any of the issues. Your attorneys will present your mediated agreement for approval from the family court judge before asking the Court to finalize your divorce.
This cooperative method can save literally tens of thousands of dollars but is only effective if both parties agree to be reasonable from the beginning and remain forthright and honest with all financial disclosures. If either party feels the other is “hiding the ball” or attempting to “cheat” the process, you’re better off asking your attorney to file the case, which will allow your attorney to better advocate for your post-divorce goals.
This is probably the most important divorce money tip of all: stay positive! The divorce process is never easy, but it’s important to remember that it is only temporary. You will get through this, and you will be stronger for it. Although divorce can be financially devastating, there are ways to protect yourself and your future. By following these divorce money tips, you can help ensure that you come out of the divorce process in a good financial position. So, keep your head up, stay positive, and focus on the task at hand: getting through your divorce and moving on with your life!
If you and your spouse are considering divorce, don’t make any decisions about how to proceed before talking with a trusted attorney in your area. Your divorce and any settlement you create will be subject to your state’s divorce laws. Without discussing your situation with an attorney, your agreement may not be what you want or what is beneficial to your future. If you’re in South Carolina, it’s important to contact an experienced family court attorney like Ben Stevens today to discuss your specific situation. Even if you aren’t in South Carolina, Mr. Stevens is happy to offer referrals to a well-qualified attorney located in your state.
Mr. Stevens is a Fellow in the prestigious American Academy of Matrimonial Lawyers and the International Academy of Family Lawyers, and he is a Board-Certified Family Trial Advocate by the National Board of Trial Advocacy. If you or someone you know is facing a divorce, separation, child custody, visitation, or other family law case, contact our office at (864) 598-9172 or SCFamilyLaw@offitkurman.com to schedule a consultation.
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Contact our office at (864) 598-9172 or SCFamilyLaw@offitkurman.com to schedule an initial consultation.
ABOUT J. BENJAMIN STEVENS
Ben.Stevens@offitkurman.com | 864.598.9172
Aggressive, creative, and compassionate are words Ben Stevens' colleagues freely use to describe him as a divorce and family law attorney. Mr. Stevens is a Fellow in the prestigious American Academy of Matrimonial Lawyers, the International Academy of Family Lawyers, and is a Board Certified Family Trial Advocate by the National Board of Trial Advocacy. He is one of only two attorneys in South Carolina with those simultaneous distinctions. He has held numerous leadership positions in the AAML, and he currently serves as one of its National Vice Presidents. Mr. Stevens has a statewide practice and regularly appears all across South Carolina. His practice is focused on complex divorce and child custody cases.
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