March 10, 2016

Divorce Finances: Protecting Yourself Financially after a Divorce

Divorce Finances

Because a divorce can be such an emotionally draining experience, it is natural to breathe a sigh of relief after it is over. However, even after a divorce there is still important work to do. You need to take steps to protect your financial future.

Check Your Accounts

Often in a divorce there is a court order that prevents you from making any changes to financial accounts. After a divorce is completed it is essential you review who has access to those accounts. You do not want your ex-spouse, no matter how amicable your divorce was, to still have access. This includes making sure PINs and passwords are changed. You also need to make sure they are not a signer on any of your accounts.

You will need to change any beneficiary designations on your accounts. While life insurance is the most obvious type of account that will need to have the beneficiaries changed after a divorce, some credit and checking accounts may also have benefits that pass on in the event of your death.

Retirement accounts may also need to be changed. However, be cautious when making any changes to retirement accounts or life insurance that you are in compliance with any court orders dividing these accounts.

Estate Planning

If you have a will or trust, after a divorce you need to make some changes. You want to make sure that your ex-spouse is not inheriting anything you don’t intend to pass on. More importantly, you may need to make special provisions for any minor children.

Becoming Financially Sound

A divorce can cause a lot of financial upheaval. You may see your disposable income shrink and your debts increase. Divorce is one of the leading causes of bankruptcy. If you want to avoid a post-divorce bankruptcy, you need to take control of your finances. This includes setting up a realistic budget. Even if you are receiving spousal maintenance or child support, you will probably need to make some adjustments to your lifestyle.

Part of any budget should be a plan to pay down debts. The sooner you can eliminate debts, especially high-interest credit card debt, the sooner you will have more disposable income and the less money you will have to pay out over time.

If you have any questions about divorce or post-divorce issues, you need to speak with a knowledgeable and skilled DuPage County divorce attorney. Call the firm of Mulyk Laho Law, LLC today at 630-852-1100 to setup a consultation.