If you’re considering divorce, you probably already know there are a lot of financial decisions to be made. You may need to decide whether one spouse will continue to live in the family home, or whether you should try to sell it. Especially in a high-asset divorce, you probably have a web of personal and marital assets such as retirement plans, insurance, separate and/or joint checking and savings accounts, vacation properties, and other property. You may also have shared debts to figure out.
While the divorce process itself includes procedures for marital property division, it won’t take care of all the financial and property decisions you need to make after a break-up. You should review your overall financial plan to make sure you have enough and the right types of insurance, investments and savings.
What can a financial planner help with?
After the divorce is final, you may have many questions, including:
- How will you adjust to living within your new budget?
- How will your taxes change?
- What insurance, retirement and estate plan changes do you need to make?
A financial planner can assist you with all of these questions and more, as applies to your situation. They can even assist with making updates to your will and estate plan, along with updating beneficiaries to your retirement plan, life insurance policy and annuities. Georgia law does not automatically revoke your ex-spouse as a beneficiary after a divorce. Even if you intend for your ex to remain the beneficiary, its best to update your beneficiary designation so it reflects that you are divorced.
Review your financial plan after your divorce
In addition to making those changes to your beneficiary designations, after a divorce, estate and financial planners recommend you take a look at several items that will affect your financial life:
- Life insurance. You may need more life insurance if your financial responsibility for your children has increased. If your budget relies on alimony or child support, consider purchasing additional life insurance on your ex-spouse.
- Short- and long-term disability insurance. Check if you have enough to keep you out of trouble if you can’t work due to a disability.
- Long-term care insurance. The best time to buy insurance to cover in-home care, assisted living or nursing home care is when you’re healthy and qualify for reasonable rates.
- Powers of attorney and living wills. Be sure to update your durable power of attorney for finances, medical power of attorney or healthcare proxy and other such documents.
“Frankly, these are simple things, but I think people’s emotions get tied up, and they overlook them,” says Charleston certified financial planner Jeremy Lowe.