There are both emotional and financial impacts on individuals who decide their marriages are no longer viable. New Jersey couples heading for divorce not only have to take care of their emotional well-being, but the financial as well since life with one income can be vastly more difficult. Steps should be taken to avoid running into financial difficulties after divorce.
Pay attention to all details
It’s often been said not to sweat the small stuff, but in a divorce situation, the financial small stuff needs attention, too. A financial planner may be able to assist those who are divorcing, but the person must have all the information or else it could be disastrous. Everything regarding finances should be documented, so those enlisted to help financially can do the best job possible. Here are some issues to look after:
- Be cognizant of insurance demands. The spouse paying alimony might be required to provide life insurance to a former spouse to replace alimony in case the payor dies.
- Tax status. If the couple is legally married as of Dec. 31 of the tax year, they may still file joint taxes.
- Update an estate plan. It’s most likely a spouse is named as beneficiary. Unless a testator wants a former spouse to be a beneficiary, that must be changed.
- Think about selling the marital home. Selling the home could lessen the financial burden on each person.
- Refrain from making hasty decisions. It’s always best to get advice from a financial adviser or a lawyer before making drastic financial decisions.
- Try to keep matters out of court. Litigation can weigh heavy on the pocketbook. It’s best to settle outside of court.
Ignoring vital financial facts in a divorce could spell trouble for both people. There may be times when those divorcing in New Jersey don’t know where to start when it comes to important issues like finances. Getting the appropriate financial advice is imperative if each person is to continue to move forward in a healthy financial mode.