5 Things To Ask Your Certified Financial Planner Before Getting A Divorce

Posted by: KHTS Articles in News Articles June 18, 2021 - 8:45 am 0 835 Views

I do not believe that anyone anticipates getting a divorce when they walk down an aisle and say “I do” to the person they believe to be the love of their life. Of course, there are few exceptional cases with ulterior motives, but that is a different conversation.

A lot of people underestimate the challenges associated with marriage. Those challenges only grow bigger when you have years and years under your belt in that marriage. Look how often you and your best friend get into disagreements. Now imagine how many disagreements you can get in your marriage while living under the same roof and sharing the same responsibilities.

Couples divorce because of lack of intimacy, infidelity, lack of compatibility, getting married for the wrong reasons, and various other reasons. Regardless of the why, most people can agree that going through a divorce is stressful and trying.

There are so many factors that play into a divorce. You have to reconfigure your entire life post-divorce, especially if you have children. Something as simple as refinancing and leasing a car in your own name can make a high intensity situation worse.

Imagine a simple question like “Does leasing a car include insurance?” turning into a long drawn out session where you are re-evaluating every financial factor in your life as an individual. Overnight, your way of life is transitioned, and your finances are affected the most. This is why you need to ask your certified financial planner a few key questions before filing for a divorce.

#1 – How do I set myself up for financial success after divorce?

This is probably the most important question that should be asked before you even consider filing for a divorce. The worst position to be in is financially unequipped because you rushed to get a divorce.

With the exception of abusive marriages, you probably went through several years of marriage with your partner, so what is a couple more days or months until you make sure you are set up for financial success post-divorce? However, if you are unsafe in your marriage, please do not stick around any longer.

If you are physically and emotionally safe, a Certified Financial Planner can help you make smart financial decisions both before you file for divorce and throughout your divorce so you can be financially sustainable post-divorce.

A financial advisor is crucial when you have non-liquid assets, like real estate or retirement plans or when the income-earning is not balanced between you and your partner. It may come down to where you need to sell assets, and your financial planner can help you find the right real estate agent.

Another thing that should be brought to attention is your Qualified Domestic Relations Order (QDRO). This a decree for a retirement plan to pay for child support, alimony, or marital property rights to a spouse, former spouse, and any dependents. This step can help you financially after a divorce. A QDRO impacts your ability to get 401k/IRA withdrawals or even pension income.

#2 – What is separate, and what is marital property?

The financial planner also comes in handy when you are separating your personal finances from your marital finances. You can sit down with your financial planner to discuss what exactly is yours so when you go into divorce proceedings, you do not end up losing assets or money that is rightfully yours.

Divorces can grow messy, and if one or the other partner is upset or hurt badly throughout the process, they can try to hurt you by taking what is yours. Losing income or assets can be the difference between you living comfortably after divorce and struggling to stay afloat.

#3 – What debt is in my name, and what still lies in joint accounts?

When you marry someone, you or the other person may come into the relationship with debt already established. Typically you also may create debt together as partners. Depending on if you resolve individual debts or debt as a pair throughout the marriage, you may have to decipher which debt is whose and who is responsible for paying it off.

A judge can demand that the opposing partner pays for a certain amount of debt, but the credit agency is not concerned about what happened during the divorce proceedings. They are only worried about receiving payments on time.

So if the person decides to not pay, you need a plan in place to protect your credit score and fiscal reputation if your name is on the agreement for credit. The last thing you want is to have to file bankruptcy after a divorce because of situations like this.

Your financial planner can help you prepare for this. They will also advise you on which joint accounts need to be closed and how to go about closing them.

#4 – What can I afford to walk away from?

As a couple, you may buy a house, car, and other necessities that are essential to your everyday life. If you divorce, you may not be in a financial position to purchase a new house on your own. Your financial planner will be able to help you decide what you can afford to walk away from or not.

Sentimental value does play some of a role in this decision, but if you can afford to walk away from a home or car, it may be best to let it go instead of fighting in court about who gets what.

Whether or not you have kids weighs heavily on coming to this conclusion as well. Whoever has sole custody will have to consider the cost of keeping up with a household financially as well as the financial responsibility of children.

#5 – What paperwork is required for spousal and child support?

During the process of divorce, things can quickly grow to be very negative, but it is important to remember that at one point, you cared about the person enough to marry them. They became your family, and this is specifically true if you have children together. If you have children, they will always be a part of your life in some way.

With that being said, you should pause and consider if your partner and your children will be okay financially after this divorce. Circumstances differ, but when children are involved, this should always be a concern. Your financial planner can help you decide which paperwork needs to be filled out to ensure you either receive or give the right amount of money to your ex-spouse and/or children.

On another note, if you are a spouse who expects to receive spousal support, you should make sure you fill out this paperwork accurately and timely. Spousal support and child support may not be able to be changed after a divorce is final. If certain paperwork is not included in the finalizations of a divorce decree, your ex will not be required to give you a dime which can definitely hurt you in the long run.

Imani Francies writes and researches for the auto insurance comparison site, AutoInsurance.org. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing.