Obviously, not all marriages are the same, and neither are all divorces. That said, there are several financial aspects that must be considered to avoid mistakes that can cost you for years to come after a divorce. We’ll explore five of these in this month’s blog post.
1. Maintaining a Mortgage
Oftentimes, a divorcing couple owns a house or condo together that one party hopes to retain after the divorce is final, especially if they have children. Though it is normal to want to keep this area of your life the same for yourself and your kids, you must be realistic about whether or not you can afford to keep this asset on a single income. If doing so forces you to live beyond your means, it is not wise to attempt to stay in the family home.
2. Benefits, Investments & Savings
If you have accumulated retirement savings (often in the form of a 401K or Roth IRA), stock investments, and/or receive healthcare coverage through your spouse’s employer, it’s crucial that you take stock of the value of these assets before you decide who gets to retain what. There may be quite a bit of negotiation between divorcing parties and a lot of paperwork to disentangle these benefits. Handling this aspect sloppily could easily result in untenable tax bills and exorbitant healthcare costs.
3. Spousal & Child Support
Depending on your circumstances, you may be obligated to pay spousal maintenance, child support, or both. If your spouse has not worked for a long time or makes significantly less money than you do, it’s likely that you may be ordered to pay spousal support. Furthermore, you will probably be responsible for child support payments if your spouse ends up being the primary caregiver for your children. It’s important to consider these possibilities when determining living arrangements.
4. Credit & Financing
Once you’re on your own, you will only rely on your credit. People with poor credit scores should be prepared to work hard to improve it or else face trouble renting, leasing, or purchasing different kinds of property.
5. Estate Planning
Most couples name one another as life insurance beneficiaries, powers of attorney, and/or the inheritors of valuable assets after death. Don’t forget to amend these documents to ensure that your ex only remains connected to your estate in the capacity you want or not at all.
Planning with the Big Picture in Mind
Before you make any rash decisions regarding your marriage or divorce, it’s important to meet with an experienced Oregon divorce lawyer who can help you assess all aspects of the process. Lee Tyler Family Law, P.C. will help you determine your divorce goals and build a strategy for getting there.