Planning For Post-Divorce Life
Don't wait for the divorce settlement to plan for your life after divorce. Start planning for the rest of your life during your divorce. Below are some tips that can help you.
Aim for a Mixed Portfolio of Assets
Your divorce settlement may involve both cash and assets. Mixed assets may give you better financial security than single assets. That way, you won't lose much even if one asset loses its value.
Say you have a choice between one piece of real estate property and stocks, cash, business shares, and jewelry. You might lose considerable money if you choose the real estate property and something occurs to reduce its value. However, the risk that something might affect every asset in the mixed portfolio is low.
Insure Spousal and Child Support
Child and spousal support can continue for many years after a divorce. For example, a five-year-old child may receive child support for over a decade. You cannot be certain that the parent paying the support will be alive for the support duration. Unfortunately, the paying parent's demise might leave you and the child in a financial rut.
Life insurance can help you protect the support payments. Include the coverage in your divorce settlement agreement. Designate a custodian as the beneficiary in the life insurance policy for child support protection. The custodian designation as a beneficiary helps since the child cannot administer such financial accounts before adulthood.
Avoid Divorce Delays
The more drawn-out your divorce is, the more it's likely to affect your future life. For example, a protracted divorce may:
- Cost in terms of legal fees and expenses
- Affect your mental health
- Put your life in limbo as you wait for the settlement
Do your part to accelerate the divorce as much as possible. Discover a few tips to help you:
- Don't hide assets
- Be honest with your disclosures
- Negotiate in good faith
- Compromise where necessary
A divorce attorney can help you hasten the divorce.
Update Your Estate Plans
Update your estate plans to minimize your former partner's effect on your life after the divorcee. For example, you may:
- Update the beneficiary designations in your last will and testament to remove your spouse if you don't want them to receive a part of your estate in case of your demise.
- Designate another person as your attorney in fact (for the durable power of attorney) or health care proxy if your spouse currently holds those positions.
- Designate a different executor of your estate plans if your spouse currently holds the position.
You don't have to delete your spouse from your estate plans if you are on good terms and still want them to play a role in your life. However, you should know that the divorce settlement alone doesn't erase your spouse from the estate plans. You have to update the plans to reflect your current wishes.
Involve Professionals
Relevant professionals will help you use skills and logic instead of guesswork or emotions to plan for your post-divorce life. For example, you may need:
- A financial planner to help you minimize the divorce's impact on your finances
- An estate planning lawyer to advise you and help you update your estate plans
- A tax professional to minimize the tax impact on your divorce assets
- A therapist to help you overcome the divorce's effect on your mental health
Your divorce lawyer, support group, or family and friends can help you with referrals for these professionals.
Kalasnik Law Office LLC can handle the legal aspects of your divorce. We have decades of experience in family law. Contact us for a consultation to determine how to proceed with your case.