Paving the way for a sound financial future is a priority when you divorce. Yet there is more to it than deciding who gets which assets and what if any payments one of you must make to the other.
Here are two areas you must not forget:
Any outstanding debts
You have two main choices here. Either you use marital money to pay them off before dividing what remains, or you leave each debt with a particular person. What you need to avoid is continuing to share debt after your divorce. Here is why:
- It increases the chance of missed payments due to miscommunication
- It keeps you tied together and requires you to talk to each other. Divorce is typically about separating yourselves from each other as much as possible.
- It makes you financially vulnerable to each other’s actions. A failure by one party to make their part of the payment will affect the other person’s credit score as well as their own.
Your estate plan
When you are married to someone they will automatically get some of your property when you die.
When you divorce, not only do you separate your joint property, but you probably no longer want them to receive anything when you die. So, you need to draw up a new estate plan accounting only for the assets you own post-divorce.
You also need to alter your beneficiary designations, otherwise, when you die they will still get anything where they remain the designated beneficiary. Even if you have been divorced for decades.
Consider legal help to ensure you do not make any costly oversights when handling your divorce.