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Gaining financial clarity during a divorce

On Behalf of | Jul 21, 2020 | Property Division

The end of a marriage is a difficult reality to accept. However, with a divorce rate still lingering around 50%, couples in New Jersey and elsewhere should realize that divorce is always a possibility whether they just go married or have been married for decades. When a divorce filing occurs, there is one major issue that will always come up no matter the couple or length of marriage and that is money.

Although the emotional and psychological effects of a divorce are major, the financial impacts of the process can be significant. Despite the progress that has been made, women still feel the financial impacts of divorce more often than their male counterparts. This remains true even in matters where the woman was the breadwinner of the household.

Because women are less like to play a major role when it comes to family finances even when they make more money than their spouse, they are less likely to fully grasp their finances when going through a divorce. This makes it especially important that financial clarity is gained during the dissolution process.

There are seven steps a divorcing spouse can take to gain financial clarity. First, it is vital to become aware of all of your assets. This includes property designated as marital property and assets that are considered to be separate and solely owned by one of the spouses. Next, debt should be assessed and understood to be either marital or separate. Third, a divorcing spouse should have cash on hand. This means they should maintain their own finances to not only pay for the divorce itself but also the costs associated with their life during and after divorce.

It is essential to strategize the split, meaning, assessing who gets what. What is important to you financially, and what is necessary for you to remain financial stable post-divorce. Furthermore, it is important to plan for the future. Even if retirement is not just around the corner, divorce could impact retirement accounts. One should be aware of these financial accounts as much as any other account.

Health care is also an important finance to consider during divorce. It can be costly; making it a vital decision with regards to maintaining coverage even post divorce. Finally, it is important to establish who taxes will be handled. Paying and receiving alimony can impact finances, so this is also an important factor to consider.

Divorce can bring with it many changes. Finances could be significantly impacted, making it imperative that divorcing spouses understand how to navigate this divorce issue. Property division could lead to many disagreements, and having clarity of your finances could help resolve these disputes.