Divorce can be a traumatic experience and getting expert advice relating to finances before the settlement can be re-assuring during this trying time. It has become evident that men and women have different ways of managing their money. Therefore, in the unfortunate event of going through a divorce, what are the financial considerations for both parties?
Personal finances are a delicate subject and adding to the emotional pain of going through a divorce there are some key aspects of navigating. Couples who are separating are faced with the decision of having to split their homes, finances, etc. Collectively this is referred to as splitting the marital estate. Unfortunately, there are several financial implications during divorce proceedings that are often misunderstood, underestimated or overlooked by either one or both parties. That is why it is of elemental value to find expert assistance from a qualified financial adviser to help you with making the right choices when going through a divorce settlement.
Three financial considerations to take into account before the divorce order:
- Consult with a financial adviser
Make sure that you are consulting with a financial adviser before contacting your lawyer. Couples often make the mistake of liaising with financial planners after the legal divorce settlement was concluded. Having a financial expert to your disposal can give you a sense of financial stability when it feels like everything else is going sideways. With advance planning and a coherent strategy, you can immediately experience a sense of accomplishment that will positively impact everything else. There are usually post-divorce expenses before negotiating a settlement, and a financial adviser can adequately make a list of your liabilities and assets including your retirement funds and pension. They will be split according to the preferred marital regime, for example, marriage within the community of property, etc.
- Make sure you hire your own financial adviser
It is principal that both parties obtain the services of both their own financial adviser as well as a divorce lawyer. Two experts who specialize in divorce settlements can better handle such a case.
- Don’t steer away from the budget that your financial adviser has compiled
Spouses often don’t fully comprehend the serious financial implications of separation. Once the person knows what they need to give up or what assets they’ll receive as per the stipulations of the divorce order, their marital regime and maintenance commitments, they will have to work out a budget and re-organize their finances. This is where a financial planner can assist you with working out a cash-flow and budget. They can discuss the variety of scenarios to give you an insight into what the various settlement terms will entail in the future. This relates to scenarios where maintenance orders are not carried out post-settlement.
Going through a divorce can be highly unpleasant, and your financial situation is going to significantly change. But it is possible to bounce back onto your feet if you do things right from the beginning. Make sure you set up a budget and stick to it. Downscale where you can and set new financial goals for yourself and actively work on a strategy to work out the best way of meeting those goals.