Divorce is a difficult time for anyone. Emotions are high, and life-changing decisions are on the horizon. You may have hired a lawyer who will assist you through the legal process that separates two people from a marital state. Your lawyer's main focuses will be to work toward an equitable division of property and assets, as well as child custody.

But a lawyer’s help may not be all you need. If you’re also interested in setting yourself up for financial security and success in the years that come after your divorce, you should consider working with a financial professional as well. Financial professionals can help you view your assets through a prism that focuses on the long-term solutions that will best meet your future needs.

If you are going through a divorce, here are some key financial considerations:

Remember to be realistic about how many monthly expenses you can manage after divorce.


    This new budget should detail every dollar coming in and out of your home on a monthly basis. There will also be new budget items that come up as a part of the divorce itself — things like lawyers’ fees, child support and alimony payments are big considerations. If one spouse has stayed home and been out of the work force for a time, you should also consider how that person’s ability to return to work may affect your arrangements. Remember to be realistic about how many monthly expenses you can manage after divorce. Getting a real number down on paper will help you set priorities and create a budget that you’re comfortable with.


    You and your former spouse will need to determine the typical things, such as who will pay child support and how much. You’ll also have to decide which spouse will cover the extra expenses of a child’s activities, such as sports or music lessons. Will you work together to set up a college fund? If a college fund has already been established, who will be the owner of that fund? These arrangements should cover everything you can think of pertaining to the care, education and financial security of your children.


    If you or your spouse has an existing life insurance policy or retirement plan 401(k), who is the current beneficiary? Will that person remain the beneficiary, or will that change? In many states, divorce automatically nullifies a spousal beneficiary designation. In order for an ex-spouse to continue as a beneficiary in those states, a new beneficiary designation must be completed after the divorce is finalized.


    Often a divorce decree will require one spouse to maintain life insurance in a specified amount for the benefit of the ex-spouse. This requirement typically continues as long as there is an obligation to provide child support or alimony. If this is part of your agreement, you should consider who should be the “owner” and the “payor” of that policy. If the insured is the owner and payor, provisions should be included in the insurance arrangement to ensure that the beneficiary is not changed and that payments for the policy are made on time so that the coverage does not lapse. A financial professional can assist you with this process.


    If your former spouse is ordered to share a portion of a retirement account, you will receive a legal document called a Qualified Domestic Relations Order (QDRO). This document allows you to contact the company holding the retirement account and access the portion of the account to which you are entitled. It also allows you to move money you are entitled to into your own retirement account, tax-free and without penalty. A financial planner or professional can assist you with the QDRO transfer process and help you to adjust your portfolio for your risk tolerance and time horizon.


    When jointly owned assets are divided in a divorce, those assets need to be re-titled so that the spouse who retains the asset in the divorce is listed as the sole owner on the title document.

Having the right help to walk you through some of the larger financial challenges and questions can reduce stress and establish a pathway to a solid financial future.

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