When she was in medical school, a young woman fell in love and got married. Full of hope for her future, she never imagined that she would end up in an abusive relationship. It started out with her making small sacrifices, like moving to the best city for her husband’s career. Over time, it turned serious. She recalls purchasing $300 of school supplies and clothes for their children. Her husband grew angry and threatened that he wouldn’t pay the credit card bill. When she finally divorced her husband, it took her years to achieve financial independence.
The story of this anonymous doctor is similar to that of many women. Like this woman, as many as 46% of divorced women experienced financial surprises during their divorce.
Whether you’re facing separation due to abuse or because you’ve simply grown apart, it’s essential to protect your finances. Here’s what you need to know:
Unfortunately, surprises can come up during separation. Get bank statements and find out how much debt you have, as well as how much your ex-partner has. This information will help you get started with the process.
Now that you’re separating, it’s best to separate finances. Open your own account into which you can deposit your paychecks going forward. If you already have a personal account, change the passwords to access your online banking. If your ex-partner is an authorized user or secondary account holder, try to remove them from the account.
When it comes to your legal and financial concerns, you’ll need professionals on your side. A lawyer can help you with some aspects of finances, but it’s best to also find a Certified Divorce Financial Analyst®. These professionals can help ensure that you won’t encounter unpleasant surprises during or after your separation. For example, taxes, fair division of investment portfolios and retirement funds, division of property, child support, and other financial concerns can be complex. With the help of a CDFA®, you can protect yourself and your finances.
Did you know? Elaine King is a CDFA® and Florida Supreme Court Family Mediator with many years of experience working with families. Get in touch to schedule a meeting.
Hiding debt or poor financial decisions, or even trying to keep a bank account hidden can result in a lot of trouble down the line. When speaking with your lawyer and financial advisor, be honest about your financial situation, accounts, and properties. Remember to find out about the statute of limitations and look back periods in your state of residence.
During a separation, it’s also important to review your will. If you have children, you may want to ensure that they are the primary beneficiaries if they are over 18 or update their legal guardians. Otherwise, you may want to review your plan to make sure that everything is updated. Aside from life insurance policies, you’ll also want to consider beneficiaries for your 401k and any other accounts or assets that may pass by contract.
When it comes to divorce, your lawyer will be an important ally when it comes to resolving the legal aspects. However, most lawyers don’t have the financial knowledge necessary to handle the complexities of financial planning, dividing pensions, capital gains, and more. In addition, your lawyer can’t testify about your financial situation in court. A CDFA®, in particular, is an expert on handling finances in divorce and will easily be able to catch important details that can result in thousands of dollars of difference in your favor. Plus, CDFA®s are able to testify in court if necessary. With a CDFA®, you can avoid the financial surprises that so many women face during divorce.
Elaine King is an experienced financial planner and CDFA® who has helped many women through divorce. Contact her to set up an appointment today! For more tips, follow Elaine King on Facebook, YouTube, Instagram, and Twitter.