Divorce and Financial Planning - Dennis B. Dahlberg

Divorce produces a myriad of changes and challenges from both an emotional and financial standpoint.  It will impact you, your family, your lifestyle, and your future financial goals.  It is important to be financially sound in your decision making before, during, and after a divorce, in order to stay on track from a financial perspective and not dig a hole that will have lasting future consequences in regards to your spending and goals.

As your divorce begins and progresses, it is important that you begin to adjust your lifestyle to match your available cash flow.  It is important for you to learn to live within your means, on an adjusted income that has now been reduced significantly in most cases, and begin to review what your future retirement goals were, and now are, and how you can continue to save and plan for the future.

Additionally, you should ensure that you are communicating your goals and needs with your divorce attorney, financial advisor, and any tax professional, so that all involved persons are on-board with your goals and can assist you in adjusting to your new situation and lifestyle.

It is also important to make sure that you maintain a solid credit score at this point in time, review your credit history, and make prompt payments for your typical monthly expenses.  If you allow yourself to fall behind during your divorce, you may encounter unnecessary harm to your credit scores, making it more difficult to secure credit individually for future purposes post-divorce.

Also, you should take stock of your insurance needs and planning.  Does the insurance that you have now meet your current needs and will it suffice for the future?  Also, once your divorce is finalized, you will need to consider perhaps changing your beneficiaries on many of your life insurance policies as well as updating your estate planning documents.

As you divorce finalizes, and you move forward in engaging a new lifestyle, it is important to have a successful financial plan that begins with a holistic approach that careful combines your income, investments, insurance, estate planning, and tax efficiency.  Each person’s circumstances are different, so simply because you may know of someone else who has gone through a divorce, does not mean you should measure yourself by the same results and standards someone else may have received from the finalization of his or her divorce.

Thus, as your divorce progresses, it is important to have open and frank conversations with your divorce attorney, estate planning attorney, financial advisor, and tax professional, and ensure that all of these various persons are able to communicate effectively with each other to assist you in your current and future planning.

To get the facts and find out about financial planning and a divorce, please contact our office for a free consultation with one of our attorneys.

- Dennis B. Dahlberg, Esq.