What Issues Should I Consider During My Divorce?
Divorce is a challenging and often emotional process, and it is essential to consider several important planning issues to ensure financial stability in the long run. This checklist covers 28 crucial considerations to make during a divorce.
The first section deals with Cash Flow Issues, which includes an analysis of each spouse's current and future income, expenses, and liquidity needs. It is crucial to make a realistic budget to ensure adequate cash flow after the divorce, particularly if one of the spouses is receiving alimony or child support.
The second section deals with Asset & Debt Issues, which involves identifying all marital and separate assets and debts. An inventory of assets such as homes, investment accounts, and retirement accounts must be taken to ensure they are distributed fairly between the spouses. It is also necessary to analyze the tax implications of dividing property, particularly retirement accounts.
The third section focuses on Insurance Planning Issues. Divorce can affect existing life, health, and disability insurance coverage, and spouses must review their coverage and adjust it accordingly. It is also important to ensure that each spouse is protected in the event of any unforeseen circumstances.
The fourth section, Tax Planning Issues, covers the potential tax implications of divorce, including the tax consequences of dividing assets, claiming dependents, and receiving alimony or child support. It is essential to work with a financial planner and tax professional to understand the potential tax consequences of various divorce settlement options.
The fifth section, Long-Term Planning Issues, deals with longer-term financial planning considerations such as retirement savings and planning, estate planning, and college savings planning for children. These issues are essential to ensure financial security in the long run.
Finally, the Other Issues section covers a variety of other considerations, including beneficiary designations, social security benefits, and the division of business assets, among other things.
Overall, this comprehensive checklist can help spouses going through a divorce consider all the important financial planning issues to ensure that their finances remain secure in the long run.
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.