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Financial savvy important leading up to divorce

Florida couples ending their marriages often face complex asset distribution. Financial preparation is essential in making divorce as smooth as possible. Managing the finances can be a difficult skill to learn after a divorce. In many marriages, one partner assumes the job of paying taxes and bills and budgeting. The partner who has not been taking an active role in financial planning runs the risk of overspending if he or she is not financially literate.

Research reveals that women are less likely than men to have sufficient financial knowledge to assume sole responsibility for their financial well being after a divorce. Men, statistically, are less likely to be vulnerable to financial difficulties after divorce. Women, in particular, need to develop financial confidence quickly following a split so that they can stay solvent.

Moving from two incomes to one usually means a lifestyle shift. Preparing for this shift as soon as possible is extremely important. Anyone considering divorce should make him or herself familiar with all marital assets, including joint accounts. Awareness of joint credit can also save trouble later.

Many divorced individuals forget to change the beneficiaries that they have designated on life insurance policies and retirement accounts. Failing to change beneficiaries can mean that money is allocated to an ex-spouse. Taxes also change with divorce. Alimony is tax-deductible for the payor and taxable as income for the payee. Who claims children as dependents can be a source of contention for some parents as well.

Divorce often forces a non-working spouse into the workforce, either for the first time or after a long absence. Preparing to find work can be an essential part of readying for divorce. An experienced professional can provide important assistance in financial preparation for divorce.

Source: USA Today, "Before divorce, you should get financially prepared," Hadley Malcolm, Sep. 9, 2012

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Busciglio & Sheridan Law Group
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