Here are some tips to help you escape some common financial pitfalls of divorce:
- Negotiate an equitable settlement – Equitable doesn’t always mean 50/50. Get some professional advice from a Certified Divorce Financial Analyst (CDFA™) to help make sure you’ll be able to live with the financial terms of the settlement – now and down the road.
- Don’t live beyond your means – Reduce your expenses, or increase your income, so that you’re always putting away enough in savings. If necessary, ask a financial advisor for assistance in creating a budget.
- Think long and hard about keeping the family home – Sometimes there’s a huge emotional attachment to the family home. Sit down with a financial advisor and ask them if you can truly afford it. Planning now will save a lot of financial and emotional heartache in the future.
- Realize that you won’t get everything you want – Don’t spend countless time and dollars fighting over furniture, the good china, or other personal items. Create a short list of things you can’t live without and be prepared to compromise on everything else. Think beyond the emotional attachment and ask yourself, “Is it really worth the fight?”
- Protect your retirement assets – Have the Qualified Domestic Relations Order (QDRO) filed as soon as possible. It should be drafted by a professional before the parties are divorced and entered in court concurrently with the divorce decree. Failure to understand the QDRO process can result in irreversible financial problems.
- Use debt cautiously – Get a copy of your credit report ASAP. In addition, close all joint accounts and all credit you don’t use.
This article is a contribution from Evan Lavoie, a certified divorce financial analyst in Orange County. We are proud to refer our clients to Evan. His committment to helping his clients is evident in his work and his passion in helping couples make the best financial decisions in the midst of divorce. To find out more about Evan, visit him on LinkedIn www.linkedin.com/in/evanlavoie
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized legal advice. We suggest that you discuss your specific situation with a qualified legal advisor.