The divorce process can be overwhelming on a number of different levels, including related to finances and property division. For that reason, divorcing spouses should be aware of the financial factors to keep in mind during the divorce settlement process.
Understand their finances
Divorcing spouses should understand their finances. They should be familiar with their full financial picture, including their cash flow, income and expenses. This will help them understand what different financial scenarios will look like under different divorce settlement proposals, including retirement assets and taxes.
Divorcing spouses should not forget the importance of retirement accounts during the divorce settlement process. They should also keep life insurance policies in mind and make sure to address designations on retirement accounts and life insurance policies when divorcing.
Do not focus on emotional assets
Divorcing spouses should not focus on emotional assets. Although those assets may feel like win, divorcing spouses should instead focus on assets that have growth potential such as stocks or rental properties.
Do not make major financial decisions too quickly
Divorcing spouses should not make too many financial decisions too quickly. They can talk with a financial advisor to determine which decisions they need to make in the near term and can take their time with all others. Divorcing spouses should consult financial advisors before making financial decisions during divorce.
Think about future financial needs and plan for tomorrow
Divorcing spouses should consider their future financial needs when negotiating their divorce settlement agreement. It is important to keep tomorrow in mind and what will be needed so that both spouses can be on as solid financial footing as possible following the divorce. This can include thinking about the needs of any children from the marriage.
Navigating a divorce settlement agreement and property division can be challenging. Knowing what financial factors to keep an eye on as divorcing spouses navigate the divorce settlement agreement process can help make it less so.