7 Financial Management Tips For Anyone Who Just Went Through A Divorce

A divorce is painful, that’s a given. And anybody who has gone through a divorce would admit that if there were anything that would have kept their marriages off a divorce court, they would have readily done it. Divorce obviously affects the children in the union negatively. But apart from that, it affects the couple emotionally, psychologically, mentally and of course, financially.

Yes, divorce hurts the finance and leaves too many loopholes to be filled. Everyone wants a break after a drawn out litigation battle; a break from lawyers and dates and paperwork. But there are still a few things to be done if you want to breathe easy after a divorce.

Life is never really the same after one is freshly single and there will always be those things that remind you of the good times and the bad times you had with your ex, moving on becomes a little difficult, but move on you must! So here are a few tips that could be very helpful to get you to move on while securing your finance as well:

1. Revisit Your Insurance Broker

Contact your insurance broker and update your umbrella liability coverage. Screen Your list of assets scheduled on your homeowner’s policy and screen out the things your spouse received in the divorce also screen them out if they were sold. There is no sense in paying insurance premiums for assets you do not own.

2. Apply for a new credit card

Depending on your situation, it may make sense to apply for new credit cards before you cancel joint accounts. Especially if you have marginal credit and don’t have an emergency reserve of cash.

While credit cards are generally not very good financial helpers, comparing its downsides to what can happen in the short-term if someone does not have sufficient funds to cover their core bills can make it not only desirable, but a priority. A Credit card can provide a temporary bridge fund for you while you get on your feet after a divorce.

Again, you need to make a list of the accounts you had while married, and seek to replace them as soon as possible; Savings accounts, Investment accounts etc.

3. Re-title Your Assets

If you owned any assets jointly with your spouse and that asset was retained by you or received by you in the divorce settlement then you need to re-title them. For instance if you owned your house in a trust with your spouse, you’ll want to re-title it in your name personally or in the name of a new living trust you create.

4. Get familiar with Your Investments

This will apply where your spouse handled the investing, there may now be things you own that you aren’t familiar with or that perhaps aren’t right for you.

You need to do a deep analysis of all your investments to see if it is prudent and beneficial to you financially at the present. Sell off investments that will not help you and retain those that are potentially or presently rewarding.

5. Sell Off Some Valuables and Move On

This tip is reasonable not just because it makes financial sense, but because it also helps you move on while securing your financial future. There might be a few things that you owned jointly that you may need to sell off even if they have or had sentimental value. Resources like Worthy.com makes selling off such valuables more reasonable by giving you a financial advantage.

There are also a few suggestions about what to do with your engagement ring after a divorce for instance, especially if it is the kind of ring either of the Kardashian sisters received which was worth thousands of dollars! You may need to think of selling it and moving on.

6. Consider Moving

Moving from a family house is often an emotional decision, but deciding not to move on the basis of sentiment is “...often the beginning of a very difficult situation because it costs a lot of money and the house is not liquid,” says Pilz.

Since you’ll have to pay for this home with one person’s income, if your budget’s tight, moving to a less expensive home or renting may be a good option to consider. You need to approach it as an investment asset, and you need to make decisions from that context as well

7. Get a new everything

In addition to getting a new account, you might need to make a number of other changes. Divorces can mess up your finance and you will need to re-evaluate your finances in general; what comes in and goes out and what are assets and liabilities, what taxes you now qualify to pay.

You may need to change your will, get a new filing system, and perhaps even get a new name if that will help you sleep better at night.

The point is that a divorce is a major (and sometimes devastating) life change and the earlier and faster you can get back up and on track, the better for you.

Source: http://www.huffingtonpost.com/toby-nwazor/7-financial-management-tips-for-anyone-who-just-went-through-a-divorce_b_10373494.html

The financial dangers of separation without divorce

While divorce will for most people trigger enormous emotional and financial stress, separating without the formality of divorce can also be financially disastrous.

This was highlighted in a recent case concerning a couple married for only three weeks and separated for almost 30 years afterwards. Litigation is ongoing.

The marriage lasted barely a month in 1989. They then split and became estranged. The husband died in 2011 - something the wife discovered only last year when she hired investigators - and a dispute has resulted over her claim to some of the estate.

A judge ruled that as they were still married when the husband died she could indeed have a claim.

Lawyers say the case highlights one of many dangers financial dangers of an informal separation.

Home rights
One widely-overlooked legality is that both parties have a right to live in the house they share after separation.

If one person moves out they are allowed to come back and are free to stay when they choose, said Hazel Wright, a partner and family mediator at Hunters Solicitors.

And the partner who stays in the house is not allowed to change the locks.

"The only way to remove this right is through divorce or an injunction," said Ms Wright.

Shared accounts, debts and assets
Separated couples must also be aware that until they are divorced, their finances remain linked.

Spouses or civil partners jointly responsible for a mortgage will both be at risk if one party moves out and stops paying their share.

Ms Wright said: "It may be that the person who is staying in the home will want to keep up with the mortgage payments and the party who has moved out and has to pay rent will ask why they should.

"If the payments stop the house could be repossessed and both individuals will see their credit rating destroyed."

If one person wants to buy a home, whilst still owning the former family home, they will have to pay the 3pc levy for second homes, unless they are divorced.

Access to joint bank accounts or shared credit cards will also continue unless the provider is notified.

When told about the separation, the bank can freeze the funds in the account until the next steps are discussed. The lead holder of any credit card can ask for the second party to be removed or request the card be cancelled.

Post-separation wealth
There are also consequences concerning assets built up or eroded after separation.
For example, if one party goes wild with their spending and significantly diminishes their assets over a number of years, their spouse may be ordered to assist them in rebuilding their finances when divorce settlements are reached.

Graham Mills, a 50-year old surveyor, is currently fighting an appeal in just such a situation, after a court ordered him to pay increased income to Maria Mills, 13 years after their divorce and split of capital assets.

It heard how Ms Mills had made "poor financial decisions" through a series of “unwise” property purchases, and had spent all her money. He is attempting to raise money to further challenge the decision.

If one person increases their wealth or builds up their business during the period after separation, this will have to be disclosed when the divorce proceedings take place.

This wealth is referred to as "post-separation accrual" and may not form part of the settlement, unless the court decides the other party is in need.

After death
An individual has the right to claim against the estate of their spouse or civil partner even if separated and could demand a continuing income in addition to a "chunk of the capital", said Ms Wright.

The danger here is that the estate cannot be finalised if the executor does not know how much income is required. This is a real risk in long term separations, according to Ms Wright.

In these cases, the other beneficiaries would need to "buy the partner off". Instead of offering a continuing income, the spouse's share might need to be capitalised.

Ms Wright said it was crucial to make a will. Those who have an estranged spouse should use it to explain why they do not want them to be a beneficiary.

For example, reasons could include if the deceased has a new partner, family or dependents which they want to leave their estate to.

A halfway house
Ms Wright suggested that a judicial separation, a more formal agreement made by the court, could be an option for couples wishing to split but not divorce, perhaps where it is financially beneficial to remain married.

She said it was "almost" a binding financial arrangement which would allow couples to divide assets and property, but no pension sharing can take place.

Couples are not permitted to remarry until they get a divorce through the court.

Situations change and those who remain separated and run a real risk to their finances should they start new relationships, become a part of a new family or grow new businesses.
Ms Wright said: "It's so important for couples who split up to sort out their relationship before moving on and starting their new life."

Source: https://www.telegraph.co.uk/money/consumer-affairs/financial-dangers-separation-without-divorce/

How Social Media Can Affect Your Divorce

Every so often a topic arises which isn’t, strictly speaking, in the financial realm I usually discuss, but nevertheless has important implications for women going through financially complex divorces. Social media is one of those topics. In my practice as a Divorce Financial Strategist™, I am seeing more and more that not only can social networks and digital communications contribute to the breakup of a marriage, they can have unforeseen consequences in divorce settlement negotiations, as well.

Facebook, MySpace, Twitter, Instagram, LinkedIn and other social media and professional networking websites and smartphone applications have become an important part of how people interact in today’s culture. They’re fun and useful, and these days, they’re second nature to many of us. When something happens in our lives, we post about it to let our friends know. When something happens in our careers, we update our profiles to enhance professional connections. We’re sharing personal and professional news, triumphs and tragedies, laughs and tears . . . . and lots and lots of pictures.

Unfortunately, though, we sometimes do this without thinking through all the potential consequences. Not every “friend” is a friend. Not every connection is an ally. And many times, a message you thought was private turns out to be anything but.

Here are some of the ways that social media activity can impact your divorce proceedings:

Online activity can provide clues to hidden assets or other dirty tricks.

Married couples often have dozens of mutual friends and connections. If the marriage breaks up, obviously some of these people will be more loyal to one spouse than the other. I’ve had more than one client report a steady stream of information about her estranged husband’s financial activities, as relayed by mutual friends who were still following his Facebook updates. So, even if he’s blocked you from seeing his posts directly, your mutual friends can still tell you all about the ski trip he took to Switzerland with his girlfriend a week after claiming he couldn’t afford to pay spousal support.

Yes, we can definitely add social media activity to the list of signs that your husband may be hiding assets during divorce. Sometimes it isn’t the husband’s online activity that gives him away, but his friends’. Maybe your husband’s pals shared pictures of their trip to Vegas in his new BMW, or his girlfriend updated her Facebook status to exclaim over an expensive present, when he just pleaded in Court that he’s broke. Or maybe a college friend of his suddenly appeared in pictures with a “new” boat –one you recognize as your husband’s, and suspect that this pal is holding it for him until your divorce is finalized. If you think your husband may be hiding assets, social media activity might well bear out your suspicions.

You might also check to see what your husband is saying about himself on dating websites, compared to what he’s saying about himself in Court. Don’t assume he’s been smart enough to keep a low profile. His ego might overcome his better judgment.

Email and text messages can be admissible evidence in Court.

In addition to activity on social media and networking websites, emails and texts – the routine ways we communicate today – can sometimes be subpoenaed and gone through with a fine-tooth comb.

If your husband refers even obliquely to an impending bonus, a new job offer, or a plan to “get away from it all for a few days,” this might be evidence that he is not telling the truth on his Financial Affidavit. At the very least, it could call his credibility into serious question.

Family lawyers advise their clients not to put anything in an email, a text message, online or anywhere that they don’t want the judge to read. In the context of a divorce, if either party has shared information digitally that is at odds with what they’ve conveyed in person, or in legal documents, it can create serious problems. Lying on financial documents is a crime, and social media, email and text messages provide a potentially huge trail of evidence that can be hard to explain away.

This can all work in your favor. But remember, it all applies to you, too.

We’ve discussed ways social media can trip up your husband, but you also need to be exceedingly careful with your own online activity during divorce. Be absolutely sure you update your privacy settings on all social media accounts. Even better would be to follow this general rule:

Don’t post, Tweet, or share anything that you wouldn’t say in person to the whole world, to be remembered forever.

This infographic provides a useful guideline for online conduct during divorce.
In general, you should think of social media activity as both public and permanent. Even if you’ve deleted or hidden previous posts or photos, it is possible that someone has taken a screenshot of your page while they existed or were public, or that a cached version is still retrievable through a search engine. Even Snapchat, a picture-sharing app that’s popular because pictures shared through it “disappear” after a few seconds, is vulnerable to a quick screen shot by the photo’s recipient.

So please, remember two things about social media as you go through the divorce process: 1) It may provide very useful information about your spouse, particularly if what he says in legal documents is at odds with what he posts online, and 2) He’s hearing that exact same advice from his divorce team. If you use social media yourself, you need to exercise caution, discretion and excellent judgment.

Finally, please note that I’m not an attorney, and I don’t give legal advice. Laws about using email, texts and social media as evidence in divorce cases are notoriously convoluted, and also differ from state to state. Have a detailed discussion with your divorce attorney to find out what online information can be legally obtained and used in your case, and also how to protect your own privacy.

Source: https://www.forbes.com/sites/jefflanders/2013/08/20/how-social-media-can-affect-your-divorce/#60bae1ce35a3

The Biggest Financial Mistakes Divorcing Couples Make

Breaking up is hard to do, especially when there are so many money issues to consider with your (former) spouse.

With this issue in mind, we asked The Experts: What's the biggest financial mistake divorcing couples make?

This discussion relates to the latest Wealth Management Report and formed the basis of a discussion on The Experts blog in April 2014.

Don't Let a Divorce Leave You Illiquid

TED JENKIN: Divorce can often bring about tumultuous times for a family. Sometimes they can go very smooth, and others can literally be "The War of the Roses." Either way, couples often make financial mistakes that can lead to problems down the road. The No. 1 mistake that I have seen among divorcing couples is their lack of consideration around liquidity of assets.

It's pretty common after a separation that one spouse will end up with the primary residence and, in turn, the other spouse may wind up with a commensurate amount of assets between brokerage accounts, retirement accounts and savings accounts. While the math may show a true 50/50 split of the overall net worth of the couple, the reality is that one of the spouses will be stuck with a paper asset that could be tough to dispose of if cash flow becomes an issue.

This can also occur when one spouse is the owner of a closely held business as well. It can be very difficult to value the overall business, but this can also leave one spouse with an asset that may have little to no market to convert to cash while the other spouse gets liquid with the remainder of the couple's estate.

Upon a divorce, the spouse that gets stuck with the primary residence (often the wife), may not consider what will happen when child support and/or alimony runs out down the road, and there isn't enough monthly cash flow to potentially pay for the mortgage. This can leave that spouse in a difficult financial position and actually put them in a fire-sale position due to lack of liquidity.

When children are involved with a divorcing couple, considering selling a primary residence can be an extremely onerous task because the couple doesn't want to see the lives of children uprooted from friends, school, etc. The couple should consider both the short- and long-term ramifications of splitting up the assets including overall tax implications. The key mistake to avoid is having one spouse be illiquid.

Ted Jenkin (@tedjenkin) is the co-CEO and founder of oXYGen Financial, a financial advisory firm focused on the X & Y generations. He also blogs at yoursmartmoneymoves.com.

Why Speed Is Crucial in a Divorce

CHARLES ROTBLUT: What's the biggest financial mistake divorcing couples make? Not settling as quickly as is reasonably possible. I say this from having personally worked on divorce cases.

My first job in finance was with a firm specializing in the valuation of closely held businesses. Since Texas is a community-property state, we were hired to give an expert assessment of what a spouse's ownership interest in a business was worth. (Under community-property laws, the assets are owned equally by the couple.) There were a few cases we saw drag on and on because one or both spouses were more concerned with fighting on principle and inflicting financial pain on the other person than simply moving on. All this served to do was to drive up the legal costs of the divorce.

I understand emotions are very strong and that one spouse may have acted in a very bad way toward the other. Yet emotions and finance don't mix well together. Though it can be very tough to do so, one of the smartest financial moves a person can make in a divorce is to reach as amicable a settlement as possible and move on. The legal expenses will be considerably lower and the process of healing, from an emotional standpoint, will start sooner.

Charles Rotblut (@charlesrotblut) is a vice president with the American Association of Individual Investors.

Two Ways Women Often Get Hurt in a Divorce

MANISHA THAKOR: The biggest financial mistake I see divorcing women make is holding on to illiquid assets. (Men make plenty of mistakes too; I'm going to speak to us ladies in my answer, since my wealth-management practice is focused on empowering women.)

These illiquid assets tend to bubble up in one of two situations. The first is around the family home. Very, very often I see women want to keep the home--either so as not to disrupt the lives of children or for sentimental reasons. Alas, homes can be money pits at times. Without adequate thought being put into how much annual ongoing maintenance (mortgage payments, property tax, insurance, upkeep, etc.) will run, it's very easy to underestimate how difficult a burden the house will be to run on a post-divorce income.

The second area I see illiquid assets bubble up is around the area of splitting investments. In households where there has been enough wealth that venture capital, hedge funds and private equity has been part of the household portfolio, I have seen women get tripped up. With these asset classes, it is particularly important to make sure you have a solid understanding of both valuation and liquidity. If you receive a chunk of assets in a settlement that is locked up for a months—or years—you may find yourself in a very different financial situation than the "raw numbers" indicate. As such, particularly in high-net worth households, it's important to put your settlement under a financial planning microscope--bring in your wealth manager or CPA to discuss.

P.S. Don't forget to change your beneficiaries on investment accounts and to update your estate-planning documents post-divorce as well. That's another common mistake for both genders!

Manisha Thakor (@ManishaThakor) is founder and chief executive of Santa Fe, N.M.-based MoneyZen Wealth Management LLC.

Don't Use Money as a Weapon in Divorce

ELEANOR BLAYNEY : Put strong emotions in the same cauldron as financial decisions, and you have a recipe for disaster. Unfortunately, the two ingredients are in abundance when it comes to divorce.

When spouses see money as the way to exact emotional revenge for the failures of the marriage, the costs of divorce can be devastating. Finding ways to separate the fury from the finances—perhaps by agreeing to work with a mediator, seeking counseling and/or learning about the "collaborative" divorce process before resorting to the big legal guns—can protect both partners' financial futures.

One of the biggest divorce mistakes is generally made by women, particularly when they take primary custody of children. Often their first priority is to keep the house, believing that it is important to maintain lifestyle continuity for their children. Unfortunately, this can leave them with a lopsided division of assets—illiquid and debt-encumbered real estate in their corner, with more of the marketable securities going to the husband.

It's important for both partners to prepare a very detailed budget and balance sheet reflecting their lives post-divorce. It's not enough to "equalize" the wealth or income between the two: Other considerations such as liquidity, risk and deferred tax liabilities that may accompany some assets but not others must also be considered in the division.

Financial advisers should be part of the team of experts helping spouses uncouple without total financial derailment. These experts will maintain a long-term view during a difficult time when it's hard for a divorcing partner to even think about tomorrow. Most important of all, they can help keep their client from the financial fiasco of "cutting off their nose to spite their ex's face."

Eleanor Blayney (@EleanorBlayney) is consumer advocate of the Certified Financial Planner Board of Standards.

Why I Don't Like Mediators in a Divorce

GEORGE PAPADOPOULOS: Many mistakes usually occur during a divorce. It is an emotional process, and these emotions can affect the decision making. Both parties usually do want to separate in an orderly fashion, especially when children are involved. Sometimes they mistakenly think that getting a mediator involved will help them achieve the noble goal of ending the marriage in the best way possible. That is not true, as the goal of the mediator is just to achieve a settlement.

Each party must get a qualified divorce attorney to be on their side and look out for their own best interests. Ideally, this attorney should specialize in "collaborative law," which has worked well with a few of my clients. Adding a qualified CPA experienced in divorces, especially when there are complicated finances to sort through, is also highly recommended.

Finally, if you are thinking of getting married, please get a prenup done!

George Papadopoulos is a fee-only wealth manager in Novi, Mich., serving affluent individuals and families. You can follow him at twitter (@feeonlyplanner), connect with him at Google+ or visit his firm's website.

Three Steps To Stay Clear-Headed in a Divorce

MICHELLE PERRY HIGGINS: Divorce is emotional, and it's best not to make any financial decisions in the heat of the moment. The decisions you make about the division of your assets may affect your financial security for the rest of your life.

When couples are facing the reality that their marriage is over and emotions are running high, deciding who will get the IRA, the house or the set of china should probably wait until emotions have cooled. We want to avoid making decisions on the basis of sentiments like "He can have everything, I just want this over" or "She can have the house, since the divorce was my fault."

Here are three simple steps to help you keep a clear head about your finances during a divorce:

1. Do not rush through the divorce proceedings and/or feel pressure to make financial decisions or sign agreements. Give yourself time to move past the initial shock that your marriage is over. This may take you weeks or months, and that is OK.

2. Organize your financial, estate and personal affairs and put all the information in one location. If your spouse handled the financial affairs during the marriage, this may be a challenge for you. Don't be afraid, move forward and consider it a step toward empowering yourself financially.

3. Once you are emotionally stable and have organized your binder, meet with your financial planner and divorce attorney to discuss your options.

Michelle Perry Higgins (@RetirementMPH) is a financial planner and principal at California Financial Advisors.

Source: https://www.wsj.com/articles/SB10001424052702303380004579521661563711986