Money is the number one topic that causes fights between married couples. While there are other reasons that couples divorce, money is at the top of the list. The divorce rates in America seems to be hovering around 40 to 50 percentile. Divorces for subsequent marriages are even higher. Every relationship has ups and downs, but (American Psychological Association, 2016) some factors are more likely than others to create bumps in a relationship. Finances and parenting decisions often create recurring conflicts, for example. One sign of a problem is having repeated versions of the same fight over and over.
There are some precautions that should be taken should you find yourself in the process of getting a divorce or are already divorced. If it is at all possible, sit down with your soon to be ex-spouse and discuss splitting, in an amicable way.
Tips to help you to transform your finances after divorce:
- Joint Accounts – Leaving joint accounts open could come back to haunt you. Make a visit to your prospective financial institutions and properly remove yourself, if possible.
- Open New Accounts – Build your own credit profile, open new checking, savings, loans and/or investments accounts, etc.
- Investments – Your ex-spouse could end up with access to your 401K; remember to consider changing your beneficiaries, seek the advice of your financial adviser and/or attorney if you have one.
- Insurance Coverage – Contact your broker to inquire about updating your auto insurance, the homeowner’s insurance (umbrella of coverage). Avoid paying insurance on assets you do not own such as jewelry, autos, etc.
- Create an Emergency Reserve Fund – Creating a safety net, is essential! Put a strategy in place to save at least 6 months of living expenses.
- Income Safety Net – Create a safety net that will cover your monthly obligations without complications in the event of a job loss or illness.
- Evaluate your Credit Profile Including Scores – If you were the spouse that never manage the finances; it is imperative that you check your credit profile (www.annualcreditreport.com). Dispute ANY and ALL errors that do not belong to you.
- Estate planning – Updating your estate planning should be executed after any major life change. Consider executing your Will to determine how your property will be distributed, Living Will, and Power of Attorney for health care. Work with your attorney to create a new Living Trust if you have one.
While divorcing can be an emotionally devastating event in your life, it is important to take precautionary steps that could prevent added headaches down the road. Follow my Facebook blog for more daily tips on this subject.
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