Category: Financial Impact of Divorce

How-to: Update Your Estate Plan After Divorce

There are many things you will need to change and update if you get a divorce. For one, your will and estate plan will surely look different after a divorce. While there will be a lot of things on your plate, you will not want to forget to update some very important documents. These include your will, living trust, power of attorney documents, and your beneficiary designations. Learn how to update your estate plan after divorce.

How-to: Update Your Estate Plan After Divorce- Changes to Make

Will

If you want to update your will, the best way to do so is to make a new one and revoke your old one. You can revoke an old will by destroying it by means of shredding it or burning it. Another option would be to just make a new will and state in it that you are revoking your previous one. While divorce itself should divert any of your assets away from your ex, their portion will be given to another beneficiary. You should check into this, because the alternative beneficiary may not be who you want your assets to go to. The best thing to do is make a new, updated will based on your current wishes.

You can also state who you would like to take custody of your kids if both you and their other parent were to pass away. If you alone were to pass away, the other parent would likely get custody of your kids. If you want to contest this, you will need to indicate in your will the reasons that their other parent is not fit to raise them. This would at least be taken into consideration by a judge in the event of your death.

Living Trust

You should also update your trust as part of your estate planning after divorce… You will likely need to update some of the languages in your trust. Also, you will need to decide who you want each part of your trust to go to upon your death. Trust can cover things like bank accounts, IRAs, 401(k)s, 403(b)s, pensions, and more. By designating the trust to go to your minor children, you could prevent your ex from being able to control their assets.

Update Beneficiaries

It is likely that your ex is the beneficiary on most or all of your financial accounts. When you update your estate plan after divorce, you will want to consider changing this unless you still want your ex to get these accounts. If you have a new, updated trust, you can make the trust your beneficiary. This is especially helpful if your kids are minors. Otherwise, if you just directly put your minor children as a beneficiary, a court-appointed guardian will get it first. This court may choose your ex-spouse to be their guardian.

It is common for you to have to split your retirement accounts as part of a divorce. Usually, this is because they are marital property. Therefore, you may not be able to change who is the beneficiary on these accounts.

Where Should I Live Post-Divorce?

Figuring out where to live post-divorce can be a very stressful part of the overall divorce process. Some couples choose to have one person remain in the family home while the other moves out. If this is the case for you and your ex, think about finances when deciding where to move. It’s also important to consider whether you want to rent or buy and make sure that you don’t get yourself into a situation where you are spending beyond your means. For others, it makes more sense to try alternative custody arrangements like nesting or double nesting. It’s important to figure out what makes the most sense for you and your family. Hopefully, you can find a new place soon where you can begin fresh in your new post-divorce life.

Where Should I Live Post-Divorce? Figuring Things Out After the Divorce is Over

Consider Finances

If you are considering where to live post-divorce, finances are an important factor to consider. It’s best to take a look at your overall financial health after the divorce is final. Figure out a feasible budget and speak with a realtor and lender about your options. It might make sense to purchase a property that can build you equity. For others, it might make more sense to rent.

Don’t Stretch the Budget

It’s important to avoid becoming “house poor” when you are considering properties post-divorce. House poor is a term that means that you can afford your house, but it’s taking up all of your income. You might not default on your mortgage, however, you don’t have room left in your budget to do anything else. For example, travel, save, or purchase anything fun. When considering a property’s price, make sure that it fits easily into the budget rather than being a stretch.

Consider Location

Another big consideration when considering properties post-divorce is location. Especially if you share custody of your children. You’ll want to be close to them for purposes of custody hand-offs with your ex. It’s also helpful to be close to their school or extra-curricular activities. This way, you can cut down on travel time when doing custody switches with your ex.

Alternative Custody Arrangements

While many couples choose to have one parent stay in the family home and the other move out to a new property, others choose alternative custody arrangements. One of these is called nesting. If you choose to do nesting, you and your ex would switch off living in the home with the kids and living in a separate apartment. Another arrangement is called double nesting. This means that both ex’s live in the same home with the children, but each has their own space. Both of these arrangements require you to have a cooperative relationship with your ex.

Figuring out where to live post-divorce can be complicated, and a lot depends on your specific situation. If you and your ex get along very well, you might consider some custody arrangements where you share spaces like nesting or double nesting. If you’d rather have some separation you can go the more traditional route of finding a new house or apartment to rent. It’s important to consider your budget and make sure that you aren’t stretching yourself too thin financially with the cost of the home or rental price. Additionally, make sure that you are keeping in mind the location and proximity to your children if you share custody. Hopefully, you can find the perfect set-up for your family so that you can move on to the next stage of life.

How-to Get Your Finances in Order After a Divorce

Divorces can do a number on your finances. They can make you go from a dual-income to a single-income, change your tax and insurance situation or even add on unexpected debt and expenses. You may have to create new financial goals or even rebuild your credit. On top of that, you will have to be doing this all while juggling putting the pieces of your life back together. The key here is to be proactive and start working on getting your finances in order after a divorce as soon as you can.

How-to Get Your Finances in Order After a Divorce: Steps to Take

Budget

The first step to take to get your finances in order after a divorce is to evaluate your budget. The divorce could have resulted in a change in your household income, or you may have different expenses now. Whatever the current situation is, it will be helpful to look over your budget. If you do not have a budget already put together, now is a great time to create one. You need to be honest with yourself and build a budget that fits with your current circumstances. If your finances have changed but you continue to live your previous lifestyle, you will be headed towards financial trouble. You may have to end up needing to downsize your house or get a cheaper vehicle. Also, you may have to make other changes to your habits in order to set yourself up for financial success.

Credit

You will also want to work on building credit if you do not have a good credit score or your own credit history. If you did not have credit cards or a loan in your own name while you were married, start working on building your credit history ASAP. To qualify for a loan or rent a place to live, you will need to have a good credit score.

Keep in mind that you will often need credit to get credit. If you are unable to get a qualify for a traditional credit card on your own, there’ another option. Instead, you can apply for a secured credit card. These require you to deposit money that’s equal to your line of credit. Use this card to make small purchases and pay off the card on time each month. This will allow you build a good payment history and help your credit score. Be sure to remove your ex from any shared credit cards. Also, refinance your house so that only the person who is responsible for the payments is on the loan. This will prevent your ex from forgetting to make a payment or going into credit card debt and hurting your credit score.

By taking a few small steps, you can proactively get your finances in order after a divorce. Bt making an honest budget and sticking to it, plus building a strong credit history, you will be on the right track.

How to Talk About Money with Your Spouse

It can be awkward to talk about money with your spouse, especially if you’ve been raised to never discuss finances with anybody. However, it’s a very important part of your lives together. Both you and your partner need to have a clear picture of your financial health. Start the conversation early in your marriage or even before you tie the knot. Be honest about debt and spending habits. Work together to figure out a financial goal. This could be a plan to get out of debt, a saving plan, or a retirement plan. And finally, keep the conversation going constantly throughout your lives. You should always be on the same page with finances with your spouse. Talking about money is a healthy part of any marriage that will make your relationship stronger.

How to Talk About Money with Your Spouse: Starting and Continuing the Conversation

Start Early

It’s important to talk about money with your spouse early on. It’s a great idea to discuss finances before you even get married. You should each have some idea of what kind of debt and income the other has so that you can plan accordingly. Once you start living together it’s important to be on the same page with spending and living habits.

Be Honest About Debt

Another important aspect of learning to talk about money with your spouse is to always be honest. It can be embarrassing to admit it if you have debt. However, your spouse needs to know the full picture. Be upfront about your spending habits. If you feel that you have problems with overspending, work together to come up with a solution. Hiding debt doesn’t make it go away.

Work Together

When you talk about money with your partner, you can work together to come up with financial goals. If you can, meet with a financial advisor who can help you create some realistic goals for your money. Come up with a plan to get out of debt, save for your future, save for emergencies, and a retirement plan. Don’t forget to save for things like vacations and home improvements, too.

Continue the Conversation

Finally, once you start to talk about money with your spouse, continue the conversation. You should both be checking in with each other about your financial health frequently. Both partners should have a clear idea of how on track you are with your goals. You don’t want to be surprised by unexpected financial problems. Keeping the lines of communication open will keep you both more on track with your spending habits.

You and your spouse need to talk about money throughout your marriage. After all, our lives depend on money entirely and you now have joint assets. You don’t want any financial issues to take you by surprise. Both of you should have a clear picture of your financial health throughout your marriage. Even if money is tight, this will allow you both to work together to start making things better. Start the conversation early and keep it going throughout your marriage. Be upfront and honest about spending habits and debt. And finally, work together to create some financial goals for your lives together. Whether you have plenty of money or are barely scraping by, tackling financial issues together will make your marriage stronger.

Financial Steps to Take Before Filing for Divorce

There are several financial steps to take before filing for a divorce that can help you in the long run. Being organized before you’ve even announced to your partner that you want to separate can help you protect yourself and your assets. The first thing you’ll want to do is hire an experienced divorce attorney to represent your best interests. You’ll also want to organize your finances. Establish credit in your name if you haven’t already. And finally, close joint accounts or remove half the savings to protect yourself financially. Divorce can be incredibly stressful but a little prep work before you begin will be very helpful later.

Financial Steps to Take Before Filing for Divorce: Protect Yourself and Assets

Hire an Attorney

The first step to take before filing for divorce is to hire an experienced divorce attorney. They’ll be able to guide you and give you a breakdown of exactly what things you should be doing. They’ll be representing your best interests and will be a helpful asset to have on your side. Make sure that you find an attorney you are comfortable with and be honest with them.

Organize Your Finances

The next step you’ll want to take before filing for divorce is to organize your finances. Figure out what your and your spouse’s overall assets and debts are. You will hopefully split all of these things equally during the settlement. But your attorney needs to have a clear picture of what your financial situation looks like so they can fight for you. You’ll also want to organize documents relating to proof of income, student loan debts, and tax returns.

Establish Credit

If you don’t already have credit in your name, you’ll need to establish credit before filing for divorce. Some couples only have joint accounts. If this is the case, before you even announce your divorce to your partner, you’ll want to quietly begin building credit in your name. This is so that you’ll be able to buy a car or rent your own space once the divorce is over. One way to do this is to take out a credit card in your name only and begin using it and paying it off.

Close Joint Accounts

Finally, one final step to take before filing for divorce is to protect your assets in shared accounts. You need to protect yourself financially If you are worried that your spouse will raid your joint accounts and empty them. You can remove half of the money and move it to an account only in your name. In addition, it’s a good idea to close joint credit accounts so that your ex cannot run up charges that you’ll later have to negotiate in court. It’s less complicated if you can simply pay off any joint credit cards and then keep your finances separate moving forward until the divorce is over.

Divorce is stressful and complicated. It can also be extremely expensive. You want to start on the right foot by financially preparing yourself before filing for divorce. Hire a good divorce attorney so that they can guide you through the divorce proceedings. In addition, evaluate your overall financial health and organize the paperwork you might need. If you haven’t already, establish healthy credit in your name. And finally, protect money in your joint accounts and close credit accounts that are held in both your names. Hopefully, you’ll be able to protect yourself financially and get what you want out of your divorce settlement.

How to Handle Financial Stress in a Marriage

Financial stress in a marriage is one of the leading reasons for divorce. Financial stress can affect almost every part of your life. If one partner comes into a relationship with more or less money, if one partner is a bigger spender, or if you are in debt, it can lead to a lot of anxiety. Begin by educating yourself on how to be financially savvy. Talk about money often with your spouse. It shouldn’t be a secret in your relationship. Know how much money is coming in and going out so that you can make a budget together. And finally, take baby steps. If you are drowning in debt, set a small goal and go from there. Hopefully, you’ll be able to build up savings and establish healthy spending habits so that financial stress doesn’t lead to relationship problems.

How to Handle Financial Stress in a Marriage: Don’t Let it Tear You Apart

Educate Yourself

The first important step to handling financial stress in a marriage is to educate yourself on how to be financially savvy. Learn how budgeting works and how different types of retirement plans can benefit you. Speak to a financial advisor, or take a class online to help you understand the ins and outs of being financially literate.

Talk About Money

Another way to help handle financial stress in a marriage is to not let money be a secret between you. You should talk about money often together. Even if one partner makes more or less than the other, you should both be included in important financial discussions. Both partners should have a firm understanding of your financial health as a couple. In addition, both partners need to have a say in how finances are handled.

Know Your In/Out

It can help you manage financial stress in a marriage if you have a clear budget. The best way to do this is to have a detailed picture of the money coming in versus the money going out. For example, for a month or two, track all of your spending and all of the money that you bring in. You might be surprised at how much you spend on things you don’t need. Then, make a budget that takes into account as many expenses and possible future expenses as you can remember. You’ll still have unexpected things come up, but hopefully, you’ll be better prepared for them.

Take Baby Steps

Finally, one last way to help manage financial stress in a marriage is to take baby steps when it comes to your financial health. If you are in debt or struggling, try to pinpoint one quick way to save a bit of money each month. You don’t have to solve your entire financial problem at once. Take it little by little. Start with an emergency fund. Next, begin to work on getting rid of debt by building a budget and sticking to it.

Managing the financial stress in a marriage can be difficult, but it is so important. Oftentimes financial stress can lead to marital problems, anxiety, depression, arguments, and even divorce. If you are suffering from financial stress, try to educate yourself on healthy spending. Then, sit down and talk about money with your spouse. You both need to be on the same page when it comes to your financial health as a couple. Get a clear picture of your spending by making a list of money coming in and going out. From there, create a budget and stick to it that gives you small attainable saving goals so that little by little you build your wealth. Hopefully, you’ll be able to tackle any debt that you have as a couple and learn to have a healthier relationship with your finances.

Prepare Your Finances for Divorce

Divorce is an expensive endeavor. You need to prepare your finances for divorce before you’ve even started the process. Both you and your partner should have representation by an attorney that will be able to help you navigate the divorce. You’ll want to start tracking your spending before you even begin proceedings. Next, you’ll want to gather documentation for everything finance-related. And it’s always a good idea to wait to make big financial decisions until the divorce is finalized. Preparing ahead of time will hopefully help make your divorce less complicated and less drawn-out.

Prepare Your Finances for Divorce: Get Everything in Order

Find an Attorney

The first step to prepare your finances for divorce is to enlist the help of an experienced attorney. Every aspect of divorce is confusing and complicated. But the financials can be especially overwhelming. An attorney will help you navigate all the decisions, and might bring up things that you wouldn’t have even known to ask for. Hopefully, you’ll only go through the divorce process one time, so you’ll want somebody with tons of experiences on your side representing your best interests.

Track Your Budget

Before you even begin the process you should prepare your finances for divorce by tracking your budget and spending. You can start this before you’ve even told your partner you want a divorce. Keep a list of money coming in and money going out for several months so that you have a good sense of where every dime goes each month. You don’t need to change your spending habits, just track them. And remember to include things that seem like one-time expenses like car repairs or a broken refrigerator. Tracking your budget will give your attorney a great overview of your spending and will allow them to know how to best represent your interests. It will also help the judge determine how to split your assets.

Gather Documentation

The next step you want to take to prepare your finances for divorce is to gather evidence of your assets. You’ll want records of your bank accounts, mortgages, investments, and statements. If your divorce is not an amicable one, your partner may try to hide these documents from you. So it’s best to prepare as early as possible and gather all of this early in the proceedings. Know that banks and other institutions are allowed to tell your spouse that you’ve asked for the info if you share the accounts. You’ll give all of this to your attorney so they can get a clear picture of your financial history.

Wait to Make Financial Decisions

Finally, an important tip to remember when you want to prepare your finances for divorce is to wait to make big financial decisions until it’s over. This is because you won’t really know how your assets will be divided until the process has ended. Therefore, you might have more or less money to use on financial decisions than you thought. You’ll also want to wait to change any wills, beneficiary documents, and insurance policies until after the divorce is finalized.

The prospect of going through a divorce is daunting, but it is helpful to prepare your finances for divorce as soon as you can. Enlist the help of an attorney early on. They’ll be able to help you navigate the process. It’s a great idea to start tracking your budget before you’ve even approached the subject with your spouse. You’ll also want to gather any documentation of your finances. And finally, remember not to make big financial decisions or changes until after the divorce is over. That way, you’ll know how everything shakes out and will know where you stand financially. Hopefully, with these tips, you’ll be able to handle the financial aspects of divorce without being overwhelmed.

The Pros and Cons of a Prenup Agreement

Prenuptial agreements are a hot-button topic in the wedding world. There are several pros and cons of a prenup agreement that you should consider before discussing one with your partner. They can be a way of securing financial stability for the future. However, often they are seen as a romance killer and can cause prickly feelings between partners. If you’re wanting to approach the conversation about prenups, bring it up early in your engagement. Be willing to hear your partner’s concerns, and be open to negotiations. Hopefully, if you decide to go the route of a prenup, you’ll be able to come to an agreement that works for both parties.

The Pros and Cons of a Prenup Agreement: Should I Ask my Partner for One?

What is a Prenup Agreement

When considering the pros and cons of a prenup agreement, it’s important to fully understand what they are. A prenuptial agreement is a signed contract between two people who want to marry. The agreement spells out exactly what would happen to their financial assets in a divorce. It’s a way to prepare for the financial future if anything were to go wrong in a marriage. You should each have your own representation. Make sure an experienced attorney creates the prenup, and that you both have proof of your representation. Make sure and have the prenup notarized.

Positives of Prenup Agreement

There are many pros and cons of a prenup agreement. The most important positive is that a prenup creates a set guideline for your financial future in the event of a divorce. For example, it can lay out what happens with jointly owned property. Another positive is that it establishes that you and your partner can talk about finances early on in your marriage. Unfortunately, money problems are one of the most common reasons for divorce. Therefore, discussing finances upfront sets a good pattern for tackling money issues together. A prenup can also protect your children’s assets from a previous marriage. In addition, a prenup will protect any money you’ve accumulated on your own before marriage.

Cons of a Prenup Agreement

When considering the pros and cons of a prenup agreement, it’s important to remember that they are controversial. Many people feel that prenups are bad luck in an engagement. They look at them as if you’re preparing for a divorce before you’re even married. In addition, some partners can feel attacked or judged if you present them with a prenup. This is because it makes them feel like you value your wealth over their feelings. Prenups can give the impression that you don’t believe the marriage will last forever.

How to Approach the Conversation

If you’ve weighed the pros and cons of a prenup agreement and decided that you want to ask for one, it’s best to start the conversation early. Don’t spring a prenup on your partner the day before your marriage. Instead, begin the conversation early on in your engagement. Use it as a way of showing that you’re comfortable discussing finances with each other. Remember that your partner might have strong feelings about prenups, and reassure them of your commitment. Be open to hearing their concerns. You should both consult attorneys if you decide to move forward with a prenup. Be prepared to negotiate the terms.

There are significant pros and cons of a prenup agreement to think about. While nobody wants to go into a marriage thinking of divorce, it is very common. If you’re a practical person, you might see the positives of preparing for your financial future as necessary in case a divorce happens. However, the cons of a prenup are that they can make your partner feel as though you aren’t committed. Try to approach the conversation calmly and early on in your engagement. Give your partner time to think things through and negotiate. Hopefully, even if you do sign a prenup, you’ll never need to think about it again.

How-to Communicate with Your Spouse About Money

Money is a such an integral part of our lives. According to Dave Ramsey, “Money is the number one issue married couples fight about, and it’s consistently a leading cause of divorce. This is why working through your money issues in a healthy way is actually more valuable than the money itself.” As you can see, it is incredibly important to be able to have an open, honest, and constructive dialogue about finances with your partner. In order to help prevent both financial and marital issues, you need to learn how to communicate with your spouse about money.

How-to Communicate with Your Spouse About Money: Honest Conversations

Lay it Out

First, in order to better communicate with your spouse about money, you will need to discuss the role of money in your relationship. You will need to know how each of your views money, and whether you prioritize spending or saving. Have an honest conversation about each of your philosophies about using credit cards and how much debt you are both willing to live with. Be open about any debt you are currently carrying, as keeping that a secret could end up hurting you.

Also determine how much money you realistically need to live comfortably, and go over any expected expenses or financial gains in the near future. It’s good to know both your own answers, but also where your partner stands on thee questions. If you do disagree on any points, it is important to know the reasonings behind the discrepancies.

Create Goals and Discuss Financial Responsibility

You will also want to start to discuss short and long-term financial goals. What changes can you make to set yourself up for financial success in the coming months or years? What steps can you take to prepare for the long-term future? These are all important things to lay out when you begin to communicate with your spouse about money.

It is also good to decide who who will be in charge of finances and how big decisions will be made. For example, how will you make decisions about major purchases? Or, who will be in charge of paying the bills? Another pain point in marriages is how you manage your money individually and and as a couple. Decide if you will allow individual freedom for purchases. Also, will you have joint banking accounts, or separate ones? You may also decide on a mix of both joint and individual.

Be Proactive

It helps to have these conversations before you end up running into a problem. It is best if you are able to communicate with your spouse about money from the very beginning. However, if you have not yet had those conversations, it is never too late to start.

Keep in mind that you need to continuously revisit these financial conversations. Just because you discussed them at the start of your relationship doesn’t mean that you shouldn’t have them again. If you’ve been with your partner for a long time, consider taking a fresh look at your finances. Do you have any large expenses coming up? What about setting yourself up for retirement one day? Address financial issues often and with respect and understanding. This will help you both make wise decisions about your finances as a couple.