Marriage is often said to be an once-in-a-lifetime occasion. It is a bond made in heaven and materialized on the earth, at least many of us think that way. So when we exchange vows, it is even not in our distant dream to part ways. However, marriage does not click well for all and divorce becomes the only option.
Ending a marriage can make you emotionally bankrupt – a reality that discourages the couples not to take that ultimate decision, especially when you have children. Divorce takes an emotional toll on them. One aspect that is often forgotten in such cases, at least for a while is financial consequences of divorce. If it is not taken into account, a divorce could ruin your financial stability.
Now let us go through five important points that could teach you how to make your financial journey smooth in the post-divorce phase.
Consider Costs of Getting Divorced
In this world, even a divorce does not come free of cost. You have to pay for divorce lawyers, tax advisors and there are many more categories to spend on. All these could make divorce a costly affair that was beyond your expectation. You have to incur more expenses if you own more assets and have children.
You may have an idea that settlement made via court is the best option but you can do away with all these expenses by going for mediation. And also consider that opting for mediation could be less acrimonious for both parties involved and you may even continue to remain friends even after parting ways with each other.
Assess Your Present Requirements
When you are contemplating a divorce plan, make correct assessment of what could help you with smooth sailing at present. Sometimes, divorce detracts you from your financial objectives especially savings plan, leaving you with plenty of work to start from the scratch. Make a priory of your present financial goals and plan accordingly, it could help you develop a strong and effective negotiation strategy.
Instead of retirement accounts, focus more on liquid assets in form of bonds and stocks. Retirement planning is something you can do later but focusing on long-term assets could make it difficult for you to efficiently deal with your finance right now.
Plan for Debt Management
Do you have joint debt? If yes, both of you are responsible to meet the payments even after divorce. Try to get your name struck off your spouse’s account; otherwise you have to clear the payment if your ex-partner fails to do so. However, it will not be easy to convince your wantaway husband or wife to take the responsibility of debt burden that both of you have been sharing till date.
One among several neglected financial aspects on the eve of divorce is information about beneficiaries. It is highly important to change the beneficiaries on your bank account as well as insurance policies. In case the beneficiary is a minor, you even need to change the financial guardian of your child.
Get Information on Taxation
You are probably accustomed to joint tax return but from now on, you need to bear your own tax burden. So educate yourself about the prevailing tax return and try to figure out how moving ahead with your divorce plan could affect your tax payment. Tax benefits obtained during marriage life could be negotiated in times of finding out settlement for divorce.