With the current state of the economy, the old adage “It’s cheaper to keep’er” has never been more true. But sometimes a divorce is unavoidable. If this is the case, the couple must start considering their individual financial futures sooner rather than later. This can prove to be challenging on multiple levels.
The first challenge is one that affects the nation as a whole – the housing market. For many couples, their real estate is their greatest asset. And in this market, selling would mean losing thousands of dollars. Though none of them are pleasant, there are a few options here. One alternative is to divorce now, but agree to sell the house later. One of the spouses would remain in the house until such time as the market is more favorable. This extra time could also be used to prepare the property for sale, increasing the likelihood of a better rate of return. The couple could also decide to do a short sale (selling the house for less than what is owed) or file for bankruptcy.
The next step is to begin the fresh start. If name changes are going to happen, they need to happen everywhere – All forms of ID, Social Security cards, bank accounts, etc. Change the names on insurance policies, including (if applicable) beneficiaries. It’s also time to reevaluate your current lifestyle in light of the change in household income. Begin making long term retirement plans as well. This all may seem overwhelming, but don’t panic. Let your divorce attorney help you with the separation of your current assets and enlist the help of a financial planner to strategize about your fiscal future.