If you are divorcing, you will quickly find that divorce is not just an emotional process, it is also a financial process. You need to consider your postdivorce income and finances when making property division decisions and other decisions related to your divorce.
Can you really afford the family home?
Home is where the heart is, and you may cling hard to the home you love during the property division process in your divorce. However, homeownership is expensive. You must think about whether you can pay the mortgage, utilities, taxes, upkeep and other expenses related to homeownership on a single income. You may need to let the home go if keeping it is not financially feasible.
Review your beneficiaries
Many of your financial accounts, including life insurance and retirement accounts, have a beneficiary designation. You likely listed your spouse as your primary beneficiary. However, if you divorce, you will have to review these beneficiaries and assign them to more appropriate parties. After all, most people do not want their ex to inherit their assets if they pass away!
Think about other expenses
There are many other expenses you may have decided on when you were married that deserve review once you divorce. For example, you will need to make sure you can secure health insurance coverage if you were previously covered by your ex’s insurance. If you have children, you and your ex will need to agree on how to finance their college education if that is the path your child takes.
Keep your income in mind
Ultimately, you will need to keep finances in mind when you divorce. Whether you are moving from a two-income household to a one-income household or you have been a stay-at-home spouse and are now re-entering the workforce you are likely facing financial challenges you did not face while married. Knowing your postdivorce finances can help you make good decisions in the property division process.