Rebuilding after divorce can be a very lengthy process. People experience numerous financial challenges during and after divorce that can have an impact on their standard of living.
Those who approach divorce with an eye on their future financial stability they find it easier to move on after divorce in some cases. How can people going through a divorce lay the groundwork for a more comfortable financial future?
Review the trade-offs for large assets
Some people go into divorce focused on retaining possession of certain resources. Staying in the marital home might be someone’s main goal. However, they may have to think about taxes and the cost of upkeep to determine if it is actually financially feasible to live in the property alone after the divorce. People need to set realistic goals about their largest shared assets, many of which have substantial maintenance costs.
Identify resources to retain
There are certain assets that people happily give up to their spouses and others that they don’t mind selling as part of the divorce process. There are certain assets that may have emotional value or that could be difficult to replace on the modern market. Identifying assets that someone does not want to liquidate or divide early in the process is important.
Revisit investment and retirement plans
The retirement savings goals and investment strategies people establish during marriage are not the same solutions they might require after a divorce. People may need to change up how they allocate their income and develop new strategies to meet their savings goals before retirement.
Establish what should remain separate
People sometimes misunderstand separate property for the purpose of divorce. An account or asset held in just one person’s name could still be their sole property. Inherited assets and property owned prior to marriage are sometimes separate property that people can protect during a divorce. Identifying debts that are separate can be as important as determining what assets should be separate.
Obtain a realistic value for major resources
From motor vehicles and real estate holdings to investment portfolios and collectibles, certain assets can have significant value. It is sometimes necessary to have higher-value resources professionally evaluated to determine what their fair market value is. Doing so can help with the property division negotiations even if someone does not want to retain specific assets.
There are many other considerations, including the negotiation of custody terms to retain certain tax benefits, that can impact someone’s finances after a divorce. Going into divorce negotiations with a focus on long-term financial stability can help someone prepare for a better future. Spouses who focus on the big picture may feel happier with the outcome of their divorce proceedings.