Like many divorcing individuals, the dissolution of your marriage probably has you feeling at least a bit overwhelmed. With so much on your mind, you may not be sure where to start. The thing is, a lot of the issues you decide now, during the divorce proceedings, can and will affect your future. That's why it can be so essential to approach financial issues in as calm a manner as possible.
That's often easier said than done, of course. It's almost impossible to completely remove emotions from any aspect of life, especially one as stressful as divorce. However, it's important to try to address the money issues divorce brings in as methodical a way as you can manage, as your financial future may depend on it.
Divorce financial basics
If you're divorcing late in life -- also known as a "gray divorce" for couples over the age of 50 -- you'll want to be especially conscientious when navigating your new financial situation, as the income shock divorce brings can heavily affect your retirement plans. However, regardless of how old you are when you decide to separate, there are three basic aspects you'll want to consider.
- Determine your current financial situation.
- Concentrate first on the necessities.
- Evaluate the impact on your retirement.
In reality, these areas are important for anyone at any time of life, but they become especially crucial during divorce.
Determine your current financial situation
As you begin the divorce process, you'll want to take stock of your financial situation by evaluating your current and projected income and assets, and by preparing a projected post-divorce budget. If your household was like the majority of others, one partner probably dealt with most of the money-handling tasks, in which case you'll likely need to put yourself through a financial crash course.
While it may feel overwhelming to suddenly have to deal with these unfamiliar issues, there are resources available to you who can help guide you and offer advice on which steps to take first. Take confidence knowing that money-handling skills generally come from education and experience, rather than innate ability. So with a little bit of practice, you'll be doing great in no time.
Concentrate first on the necessities
You're probably feeling pulled in hundreds of directions at the moment, but advisors recommend you begin by concentrating on two essential areas: knowing where you'll live and figuring out your health insurance. If you and your soon-to-be ex own a home together, you'll want to look at the pros and cons of purchasing or renting another house or apartment versus keeping your home and taking over mortgage payments and maintenance costs.
Health insurance will be an issue if your coverage was previously through your spouse's plan. There are options to consider, although some -- such as COBRA -- may not be ideal due to expense. If you work full-time, you'll want to discuss your situation with your HR department.
Evaluate the impact on your retirement
If you were a homemaker for much of your marriage and thus a member of the workforce for less than 10 years, you may not qualify for Social Security benefits, but instead, you might be eligible to receive half of your ex's. Additionally, you may be entitled to a portion of your spouse's retirement savings through a Qualified Domestic Relations Order (QDRO), something your attorney can help create. Most importantly, though, you'll want to carefully review any financial settlements with your lawyer, to ensure that the proposed settlement is equitable.
In the end, one of the most important things to concentrate on is the fact that your stress is temporary. With the help of experienced legal counsel in the West Palm Beach area, you can work through any financial issue that comes your way. If you're willing to educate yourself on the financial necessities while utilizing your experienced attorney's guidance, you'll soon be on your way to a brighter and more stable future, both emotionally and financially.