Regardless of how amicable your divorce is, it will likely be an emotional process. It can be a difficult time in which you will have to make decisions that will affect the rest of your life, with many of them being financial. Many people reflect back to times when they made wrong decisions, and more often than not, those were choices made when they were highly emotional.
For that reason, you may follow the advice of those who suggest one should build a support team that includes loved ones to give moral support and professionals to provide legal and financial guidance and support. Each divorce is unique, and it may be best not to navigate yours based solely on the experiences of family and friends during their divorces.
Points to ponder
Several aspects will occupy your mind when you consider filing for a divorce. If you have young children, their bests interests will likely be your primary concern. However, if your kids are all grown up, and you are nearing retirement, questions of a financial nature may become overwhelming. Here are some matters to consider before filing for divorce:
- Professional support-- Even if you feel you are strong enough to cope, the professional advice from a divorce attorney and advisors in fields such as finances, real estate, taxes and child-related issues can make the process considerably less stressful. However, if you and your spouse used the same advisor for financial, tax or estate planning matters, it might be wise to seek professionals who will look after only your best interests.
- Ensure and insure child and spousal support-- If you are the spouse who will have custody of minor children, your ex may be ordered to pay child support. Similarly, if you have not been working for some time, your spouse may be ordered to pay spousal support. You may rely heavily on those payments, and with life being so unpredictable, some people take out life insurance on the supporting partner's life to ensure continued support.
- Due diligence in property division-- For most people, property division is more complicated than what they anticipated. Assets of which the values appear equal may be far from it. For example, giving up certain financial assets in exchange for the family home may seem fair, but the many continuous costs of a residence can be overwhelming and bring financial problems in the future. In contrast, the spouse who received the financial assets may end up in a much more favorable financial position.
- Taxes-- Different assets have different tax implications in a divorce. A qualified advisor can explain the different ways in which taxes will affect a 401(k), investments, insurance, real estate and other financial assets. Proper guidance when making these choices can determine your post-divorce financial stability.
- Lifestyle -- When planning the end of your marriage, it may help to prepare yourself for a significant change in lifestyle. In most cases, both parties have to scale down substantially when they now may be entirely responsible for running a household with the same income as before the divorce.
When you consider these points, you may also want to explore your different divorce options. You may be surprised to learn that divorce mediation can save significant amounts of money and time -- when compared to litigation. Despite the fact you will not have to go to court, you can have the support of your legal representative along with any other professionals in your support team throughout mediation.