Divorce is rarely fun or positive. It can be especially troublesome and financially destructive after fifty.
And ladies, hear me loud and clear. Many times, you suffer the brunt of divorce. If you are not involved in your marital finances enough to understand what is going on, all of it, then start doing so now.
I once worked with a divorcing husband. He wanted the family boat, thought trading his equity in the family home for said boat made sense. Of course, it did not. Two different types of assets, one goes down in value the other goes up. Worse still, he was still on the hook for the mortgage.
Another time, I worked with a divorcing wife. She and her estranged husband had trust accounts for the kids, primarily to pay for college. The kids were unaware. When the oldest turned eighteen, the dad celebrated with beer and letting the cat out of the bag, the boy had some $35,000 that could now be his.
I can go on and on. If you are divorcing be sure you have a fee-only Certified Financial Planner™ to represent you, actually best to talk to one before talking to a divorce attorney. I promise…
A few general things to think about:
- Sell the family home, divvy up the proceeds and move on with your life.
- Never, ever sign a quick claim deed for any property that you have any liability for. You will be giving up the rights of ownership but not the obligation of the liability, the mortgage.
- Divorce decrees do not nullify previously executed financial contracts. I don’t care what a judge says, rules or decrees. If the judge says your spouse is responsible for paying off some jointly owned debt, and your spouse doesn’t, your only option is to sue the spouse, get a judgement and then collect.
- See above, pay off any joint debts ASAP.
- Review your beneficiary designations on retirement accounts and life insurance contracts.
- Review your will, health care power of attorney and financial power of attorney.
- Life insurance and/ or disability insurance might make sense for those with a financial obligation to another, it will ensure fulfillment of the obligation.
- Assess all of your marital assets and liabilities and understand the nature of each.
If you are considering divorce, don’t forget about the financial aspects, excluding any kids divorce is essentially a financial agreement. Talk with several fee-only Certified Financial Planners ™, pick a good fit for you and get started…