Dealing With the Financial Side of Divorce

When parting ways with a spouse, you’ll want to assemble a team of trusted professionals, gather necessary financial documents and develop a plan for your new future.

Parting ways with a spouse can be stressful and challenging, and navigating the process requires careful planning to answer questions like: Where will you live? How will this affect your children? How will the divorce impact your financial future?

These questions may lead to difficult conversations, but they’re worth having and can help you better navigate the legal, financial and emotional issues to come.

Start by building a team that will keep your best interests top of mind, including a trusted financial advisor. He or she can provide invaluable guidance when it comes to getting organized, estimating spousal and child support needs and sorting out the future value of retirement assets.

Gather important documents

When you consult a lawyer or a financial professional, bring the documents they’ll need to help you assess your situation.

  • Prenuptial agreements
  • Estate plan documents
  • Bank, brokerage, credit card and retirement account statements
  • Business ownership and financial/tax records
  • Life, health and disability insurance policies
  • Tax returns for the past five years
  • Mortgage or home equity loan documents
  • Outstanding bills or obligations
  • Real property deeds
  • Motor vehicle titles
  • Credit reports
  • Current income and expenses
  • Pay statements for you and your spouse
  • Loan applications and related personal financial statements
  • Personal property documentation for valuable assets
  • Wills, living wills, powers of attorney, trust documents
  • Inventory of sales and safe deposit boxes

Money matters

It can be easy for the emotional aspects of the transition to overwhelm the practical ones. Be sure to address these important financial tasks in an objective manner.

Create cash flow. Liquidity can be essential as you think about hiring a lawyer, moving out, etc. Make sure you’ll have enough cash to cover your expenses throughout the process.

Develop a budget. List your current income and expenses, then work with your financial advisor to develop a spending plan until the divorce is final and get an estimate of what your post-divorce income may look like.

Be vigilant about your credit. If you don’t already have one, open a credit card in your own name and use it wisely. Keep tabs on your credit score, too.

Preparing yourself

During negotiations, compromise and civility are key; however, don’t agree to anything without first considering the long-term implications.

Approach negotiations with the right frame of mind. Seek a fair and equitable settlement. Your financial advisor can help you determine which assets are the most valuable to you and help you avoid settling for less.

Divide assets. Even short marriages accumulate quite a bit of joint assets. It’s important to identify those that should be part of a fair and equitable distribution.

Divide the business. A jointly owned business can be a sticking point in a divorce. Ideally, you’ll already have a tentative plan in place that separates the personal from the professional and ensures the continuity of the business.

Be smart about housing. Experts caution against automatically choosing the house over other assets. Determine whether you can afford its current and future costs, including insurance and property taxes.

Deal with debt. Come to an agreement about who will pay the mortgage and other ongoing bills until proceedings are final. Stay current on all bills to keep from damaging your credit.

Know your retirement options. You may have a right to a portion of your spouse’s pension benefits, retirement assets, company stock options and other types of deferred compensation.

Read up on Social Security. If you’ve been married at least 10 years, you could be eligible to receive a monthly payment of up to 50% of your spouse’s benefit amount (with no impact to their benefits). Visit for more information.

Planning your future

Taking the time to think about your new life can help make the transition smoother and keep your financial plan on track.

Get a handle on your post-divorce finances. It’s time to reassess your investments and financial plan to ensure it’s aligned with your new goals. Your financial advisor can help with budgeting, cash flow, financial goals and making the most of your settlement.

Establish your new identity. If you submitted a name change request with your divorce petition, make it official. Once complete, don’t forget to notify your employer, Social Security Administration and the Department of Motor Vehicles.

It can be difficult to picture what life will be like after a divorce, but your team of trusted professionals can help you see the possibilities more clearly and make decisions that align with your goals.

Content provide by Raymond James

Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

About Forman Investment Services

If you are not familiar with us, Forman Investment Services is an independent practice located in Columbus, Indiana focusing on Family Wealth Management and generational planning. We serve clients not just locally, but across the country and globe. In today’s day and age, especially after experiencing COVID, we are very comfortable communicating from any distance whether it be in person, a Zoom call, or by phone. We confidently adapt to our clients lives and unique relationship in the style of communication and complexity.

Our planning encompasses much more than choosing investments, as we must consider tax/estate planning, education funding, insurance, retirement planning, and so much more. We work with a select group of clients who value time, family, and recreation, and need today’s investment, tax, and estate planning complexities coordinated for them. We also provide one-time plans to those that are not in need of an ongoing advisor relationship yet to help get you on the right track.

Reach out to us for an introduction if you are interested in learning more!

Any opinions are those of Forman Investment Services and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

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Published On: March 31st, 2022Categories: News