Divorce can be an extremely stressful time, but it’s also an excellent opportunity to take stock of your finances. By getting organized, you’ll be able to manage your assets and debts more effectively and plan for the future.
Strategies for Dividing Assets
The first step in a divorce is to determine the value of your marital assets. This includes real estate, investments, and other property that may have been jointly held or shared with your spouse. This is important because it will help you make decisions regarding maintenance, child support and asset distribution.
You can do this by creating an inventory of your assets. You should include receipts and any other relevant documents for each asset. You can also use a financial advisor to help you value your assets.
If you have credit cards, loans or other debts, be sure to pay them off in full before the divorce is finalized. This will help you to avoid a decrease in your credit score during the divorce process and keep your credit score high enough to get a good mortgage or car loan post-divorce.
Be sure to obtain a full credit report from one of the three major reporting agencies, such as Equifax, Experian or TransUnion. This will help you to understand which debts are yours and which debts should be paid off by the other party.
Once you have a clear understanding of your credit card, loan and other debts, it’s time to create a budget. This will allow you to figure out how much income you’ll have after the divorce and what your expenses will be. This will allow you to create a realistic budget and avoid spending more than you can afford.
Your expenses will likely be higher after a divorce, so it’s a good idea to start cutting costs as soon as possible. This can be difficult if you’ve been living off of one income before the divorce, but it’s essential for a healthy financial life after a divorce.
Planning for the Future
Having a strong financial strategy after a divorce can help you to build an emergency fund, set up retirement savings, invest in your future and even plan for a college education for your children. It will also provide you with peace of mind and give you a financial cushion should you need to be out of work for an extended period of time.
Working with a financial advisor to craft an investment strategy for your new financial situation will also be helpful in helping you prepare for the future after a divorce. This will include creating an asset allocation that aligns with your goals, assessing your risk tolerance and reviewing the tax consequences of selling and replacing your current investments.
Lastly, consider disability insurance to cover your bills should you be unable to work for an extended period of time due to an illness or injury. This type of insurance can be very expensive, but it will give you peace of mind knowing that your financial health won’t be threatened if you become unable to work for an extended period of times. Make sure you hire a reputable Miami divorce lawyer to help you navigate your case and help you plan for the future.