How to be financially prepared for your post-divorce life

On behalf of Morna Challoner of Challoner Law posted in Divorce on Thursday, February 2, 2017.

Are you one of the California spouses who gave your marriage one last chance over the holidays? Many people file for divorce in January, while others who prefer to plan things before taking action may use the first month of the year to get everything in place before filing. Research data indicates that the peak for divorce filings occurs around March.

The approach you take with your divorce will determine many matters, including whether you and your spouse will separate your finances according to a court order or before the final divorce decree according to agreements reached in negotiation. Decisions made at this time may affect your post-divorce financial stability, but because you do not need to do this alone, an experienced California divorce attorney can guide you through each step you need to take in the divorce process.

If you left the separation of joint finances for the court to determine, be mindful that there are deadlines to meet to avoid landing back in court because of noncompliance. Your attorney can help you set up a checklist to avoid missing any deadlines.

Steps to take when dividing property

Property division can be a stressful matter during a divorce proceeding. Soon to be ex spouses can work together through negotiation, often the mediation process, to divide assets and finances. Navigating the unraveling of your finances through negotiation will require you to take the following steps:

  • Update powers of attorney — Do you want the person who will soon be your ex to make financial and medical decisions on your behalf if you are involved in an accident that leaves you incapacitated? Probably not, so the time to update health directives and financial powers of attorney is immediately after you file for divorce.
  • Replace joint accounts with personal accounts — You and your ex must decide on a date to close joint accounts. Make sure that no outstanding checks remain that have not cleared the joint account. Allow time to transition recurring debts. Explain your reason for opening a separate account and ask the bank not to authorize late transactions on the joint account without the signatures of both former spouses.
  • Stop sharing debts — As soon as you decided to bring your marriage to an end, you may want to close jointly owned credit cards to ensure each party is responsible for his or her own debts. You can arrange to continue paying the outstanding balance but have the card closed for any new transactions. Remember that you will remain partly responsible for any joint debt, even if your ex is ordered to settle the account. For that reason, you must continue to monitor such accounts to prevent damage to your credit score.
  • Update your financial portfolio — It could prove invaluable to have your asset allocation, risk tolerance and timeline revised. While collective investments and incomes were considered for financing, such as mortgages, during your marriage, you must understand your post-divorce financial ability. For example, will you qualify for refinancing the family home, should you choose to keep it? Drafting a post-divorce cash flow and budget can also help to prepare you for the day-to-day living expenses of your new life.
  • Review and modify insurance coverage — To prevent being held responsible for your ex’s claims or medical expenses, you need updated health, auto and home insurances policies. At the same time, it may be wise to attend to life insurance and disability coverage, and modify beneficiaries where necessary.

By acquiring the assistance of experienced guidance when handling any of the above steps, you can gain much-needed peace of mind during this challenging time and you can significantly increase your odds of achieving the best possible outcome from your divorce.

2020-03-02T22:47:12+00:00Categories: Blog, Divorce|Tags: |

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