Financial Planning for a Florida Divorce

Financial Planning for a Florida DivorceIt is no secret that divorce can take its toll on a person’s finances. There are legal bills, court costs, potential support payments, and many other financial concerns that need to be addressed. As with many other things in life, proper planning can help you avoid many of the financial pitfalls that can accompany divorce. Some of the following tips might help you better understand the financial impact divorce could have on your life and provide some insight into strategies you can use to better manage the financial aspects of a divorce.

Create a Clear Financial Picture

By estimating your own personal worth as well as your own personal liabilities, you can make healthier financial choices. Establishing how many assets you have, which assets can be used, and figuring out how many monthly expenses you will have as an individual can help you make more informed and accurate choices about financial considerations you may face during a divorce, such as rent and other necessities. The earlier you do this, the more successful you will be in negotiating a divorce settlement because you will have a clearer idea of what you can and cannot afford.

Do Not Ignore Your Credit Report

Your credit report is an important aspect of your financial well-being. It is important to make sure that your credit report reflects accurate, up-to-date information. In doing so, it is also important to remember that even financial obligations of your former spouse could impact your credit report, especially if you continue to share assets or otherwise remain financially intertwined after divorce. For instance, if the court approves a divorce settlement where one spouse will inherit debt that could be in the other spouse’s name, failing to pay the debt could negatively impact the spouse whose name is on the debt. Keeping on top of your credit report is an important part of monitoring your financial health.

Close Joint Accounts

If you share joint accounts with your spouse and are getting divorced, it is important to make sure you close all of those accounts. These accounts can include bank accounts, credit cards, mortgages, investment accounts, and even retirement accounts. Part of the divorce process involves complete financial disclosure from both spouses, and during the process of addressing finances you need to be looking for ways to close joint accounts as soon as possible. Sometimes, this may require paying down debt to a certain point or the arrival of specific circumstances established by the court before such accounts can be closed or restructured to accurately reflect changing circumstances, but make sure to keep on top of them so you can ensure that your financial health is separate from that of your ex.

Open Your Own Accounts

No matter how much credit you enjoyed during the marriage, you may still need to work to reestablish your own credit. This often involves opening your own accounts, including banking and credit card accounts in your name. Try to use different financial institutions than you did for any joint accounts to eliminate any potential confusion.

Update Beneficiary Plans and Other Estate Planning Documents

If you and your spouse have engaged in comprehensive estate planning, as is often the case when children are involved, make sure that your estate planning documents are properly separated from those of your ex-spouse once a divorce has been finalized. Part of this process may include updating any applicable beneficiary forms for insurance or other benefit policies. You may also need to update your Last Will and Testament, trusts associated with the marriage, or other assets that may need to reflect a change in your marital circumstances.

Remember Insurance Costs

Many married couples share benefits like health insurance, particularly in a situation where one spouse has a more comprehensive health insurance policy through their job. Divorce likely means you will no longer have access to those benefits, and you will need to plan accordingly. You may need to include the cost of health insurance in your post-divorce monthly budget to help you understand how finding your own coverage might affect you should you need to. You may also want to consider other benefits like life insurance, car insurance, and renter/homeowner insurance. If you share such policies with a spouse, obtaining an individual policy could change the rate you are used to paying and you will need to plan accordingly.

Anticipate Applicable Taxes

Your experienced Florida divorce attorney can help you understands the potential tax consequences that could be related to your divorce. There are possible tax considerations related to support orders as well as the distribution of marital assets. Anticipating and being aware of potential tax consequences related to divorce can help you plan more effectively for your post-divorce budget as well as have a better understanding of your overall financial health. Unfortunately, many people underestimate the significant impact taxes can have because of divorce, and failing to do so can set you up for financial disaster.

Consider Working with a Financial Professional

While it adds an additional expense to the divorce process, working with a financial planning professional can often save you a great deal of money in the long run. Individual finances can be extremely complex, especially when they are inevitably connected to a couple’s finances. Utilizing a professional’s services to gain a better understanding of your financial health can be beneficial for many people. While your divorce attorney can likely provide useful insight into important financial aspects of divorce, financial planning specialists that have worked with clients facing divorce can often provide a more in-depth, targeted analysis of your financial well-being.

Consider Settlements When Possible

The divorce process can be exhausting even when it goes smoothly. However, working collaboratively with your spouse on a finalized divorce settlement to present to the court for approval can save both of you time and money. When couples are unable to communicate effectively and the divorce settlement must be left up to the court, it can cause unnecessary financial burdens and result in a settlement neither spouse is happy with. Using tools like mediation can help you save emotional costs, too.

If you have questions about the different tools available in pursuing a Florida divorce, contact Scott J. Stadler to schedule a consultation. You will be able to find out more information about the financial impact divorce can possibly have as well as other ways it might affect you based on your individual circumstances. Working with an experienced Florida family law attorney that focuses their practice on divorce can help you make more informed decisions about the Florida divorce process and anticipate just how the process might affect you.