Taking Control of Your Financial Future After Divorce

In financial planning, like in life, there are two topics that nearly everyone wants to avoid – death and the possibility of divorce. Ignoring these subjects can lead to disastrous financial consequences, so it is sometimes necessary to tackle these tough topics.

When your marriage is coming to a close, you may feel as if the future you envisioned has disappeared from the horizon – leaving you lost at sea. By reframing this transition as an opportunity to achieve independence and creating a robust plan to overcome the associated challenges, you can achieve an even brighter future.

Steps to Protect Yourself During Divorce

This article will focus on the actions you can take to secure your financial future after divorce. However, there are tasks that are completed during the dissolution of your marriage that can greatly influence your financial future. If you are not yet officially divorced, consider the following tips to protect yourself during the proceedings.

1. Secure The Right Legal Counsel

The right lawyer in your corner can make the difference between a simple financial transition and a difficult one. Seek counsel from an attorney who is knowledgeable and has your best interests at heart.

In many cases, a lawyer who specializes in family law will have the necessary experience to guide you through this process and the legal complexities of splitting assets. The right lawyer should prioritize your long-term wellbeing over a quick settlement, and they should ensure you feel informed and supported throughout the process.

2. Understand Your Assets

Before you can determine a fair split, you need a clear picture of your marital assets and debts. This includes everything from your family home to retirement accounts. A competent lawyer can help you identify these assets and explain how they should be treated under the law.

3. Plan Your Post-Divorce Expenses

Along with assets, you need to understand where your money goes – even if your spouse was responsible for paying the bills. Take stock of your current expenses for housing, utilities, transportation, and daily living costs. Then, estimate how those costs could change after your separation is finalized. This realistic budget is the key to ensuring your financial needs are accurately represented during negotiations.

Charting Your Financial Life After Divorce

Once your divorce is finalized, you will need to take another look at your financial picture and make a plan to ensure your needs are met. This begins with an inventory of your assets and a partnership with an experienced, compassionate financial advisor.

An Experienced Financial Advisor Can Help Inventory and Retitle Assets

After divorce, the first thing you will need to do for your finances is consolidate your assets and get a clear picture of what you have. To do this, you may need to move assets into your own name if they were previously shared with a spouse.

Some of the assets you’ll need to move include bank accounts, investment accounts, retirement accounts, your home, investment properties, and vehicles. A financial advisor can help you establish new accounts to receive monetary assets and assist with paperwork required to make the transition.

Outside of assets, you may also need to transfer other types of accounts into your own name or establish new accounts to replace them. For example, credit cards that were jointly held will either need to have your previous spouse’s name removed or you will need to open a replacement card. Insurance policies are another great example of a type of financial contract that you might not immediately think about moving. You’ll either need to remove your spouse from insurance policies or establish replacement coverage.

Once all your accounts have been retitled, you can begin to understand your new financial picture. You could find that your household income, savings, and retirement account balances have changed dramatically. Taking these factors into account, an experienced financial advisor can help you evaluate your current financial position. During this process, you and your advisor can evaluate your income and expenses to determine how much you can comfortably spend and save each month.

A Financial Planner Can Help You Adjust Your Goals After Divorce

Often, divorcees find that the financial plan they created with their former spouse no longer matches their vision for the future. Some need to adjust their plan to account for higher monthly expenses now that a spouse is no longer contributing to the household. Others have more money to save and need help deciding how to invest.

It can be difficult to adjust your vision for the future after a divorce, but an experienced financial advisor can help. With their assistance and a clear understanding of your current situation, you can begin to detail your new financial goals. At Brookstone Wealth Management, we call this process finding your True North.

Create or Modify Your Financial Plan After Divorce

Once you know your starting point and goals, you need a plan for every step along the way. Your financial plan should include savings goals, investment decisions, insurance planning, tax minimization, and an estate plan. Because your financial plan needs to be so comprehensive, you need to choose the right financial planner.

With the right financial partner, you can create a plan for reaching all your financial goals whether those include paying off debt, covering educational expenses for your children, or funding the retirement of your dreams.

A Financial Advisor Can Help You Choose the Right Investments to Match Your New Situation

After divorce, your goals and risk tolerance may have shifted, and your investments should reflect your new situation. Whether you are comfortable with your current portfolio or feel you could handle more risk, an experienced advisor can help you tailor your investments accordingly.

With the Right Financial Partner, You Can Feel Confident in Your Plan

By partnering with the right financial advisor, you can create a comprehensive financial plan that reflects your new situation and your personal goals. This financial partner should be compassionate and work to help you understand your plan and the steps necessary to reach your goals.

You can think of your advisor as a financial coach – a strategist who is always ready with a plan, a mentor to help you make progress toward your goals, and a cheerleader for you along the way. With the right financial coach, you can feel empowered to move forward after divorce and find confidence in your plan.

Seize Control of Your Financial Future with Financial Fingerprint® by Brookstone Wealth Management

At Brookstone Wealth Management, we focus on coaching, teaching, and mentoring our clients through life’s biggest challenges. We want each of our clients to feel confident that they understand their financial plan and the steps for achieving their goals. That’s where our proprietary wealth management program, Financial Fingerprint®, comes into play.

Financial Fingerprint® is a comprehensive financial plan that brings together the most important aspects of your financial life and adapts to your changing circumstances. With Financial Fingerprint®, and an ongoing relationship with an experienced financial advisor, you can take control of your financial future and find your True North.

To get started, contact us today.