Know What You'll Need After Divorce

June 03, 2011

Know What You'll Need After Divorce

During a divorce, couples are doing more than ending an emotional relationship. In the midst of deciding who gets what, their asset splitting is really financial planning in disguise. Negotiations regarding child care, child support, insurance, retirement accounts and even joint credit cards and loans come into the picture. These decisions can impact a person's future financial stability. So it is wise to pre-plan and weigh financial needs before entering into a separation or settlement agreement.

Life after divorce could entail refinancing some loans or obtaining housing. Good or adequate credit will be crucial, and during marriage, some aspects of credit are joined. Obtaining a credit report can clear up how co-mingled credit issues can be and clarify a couple's ability to maintain pre-divorce livelihoods.

In many marriages, paychecks and other assets are pooled, and bills and expenses are shared. In preparing for divorce, an estranged couple will have to develop their own budgets. In order to truly understand post-divorce financial needs, a person must outline expenses as well as inventory assets. Car payments, taxes, health insurance and mortgages or rent are just as important to list as savings accounts, CDs and 401(k) plans. When children are involved, expenses for day care, school fees, extracurricular activities and even medicines become line items. Honesty about income, assets, spending habits and debts makes developing a sound budget possible. If necessary, a professional valuation of joint and separate assets might be necessary.

With an idea about credit status, value of assets and extent of expenses, couples can intelligently begin negotiating divorce settlements. Still, the process can be complicated. The post-divorce financial plan is contingent upon post-divorce responsibilities, and some of those responsibilities, such as who will raise the children or keep the house, remain unresolved during the early stages of a divorce.

It is best for couples to try to come to some accord about basic things. Haggling over minimal equity in the home or trivial items costs time, aggravation and money that would better be spent on finding common ground.

When couples cannot agree or have more complicated issues involving assets, the help of an experienced family law attorney can help clients clarify and focus on the key issues. In the absence of this help, courts decide and couples can lose the opportunity to decide for themselves.

Article provided by Clark Family Law, P.C.
Visit us at http://www.clarkfamilylawpc.com