Financial Wellness After a Divorce
People always say money can’t buy happiness. Yes, that is true, but not having enough money can certainly add a burden creating feelings of uneasiness and insecurity. Money becomes high on the list during divorce processes. It falls in line right after child custody. Of course, you need to be concerned with your financial wellness after a divorce. However, many people get caught up in wanting particular assets (in most cases that is the family home), but do not consider the financial effects long after the divorce is granted and everyone has moved on. As your legal representation, we at Kevin Hickey Law Partners want to work with you to aid you in surviving financially after divorce. It doesn’t matter if you are a financial-savvy businessperson or a stay at home parent, this is a stressful process and you need an outside representative to help you think logically and clearly. Our goal is to help alleviate financial fears, bring you confidence in financial decisions being made during the divorce and ultimately financial independence. We will get to work on your financial autonomy by considering the following:
1) It may seem like a no-brainer, but many people do not think it through clearly that their income will drop after the divorce is final. You will need to make a budget according to the income you will have after the divorce. Your income includes spousal and child support as well as your regular income. Based on the information you give us up front, we can help you determine a general idea of what income, if any, to expect either receive or payout for spousal and child support. The budget will also need to be based off expenses you anticipate. Check out our blog about writing a successful parenting plan to help you determine which expenses you will be responsible for.
2) Do any “homework” your attorney assigns to you. In order to help you determine the best course of action that is most beneficial to you, we will need to know what you have. This list includes, but is not limited to:
- Retirement accounts
- Real estate
- Personal property
- Liquid assets
- Business interests
- Debts associated with the above items and any other individual or joint debts
3) This one is always a hard one for many divorcing couples—the family home. Not only is the family home often one of the biggest assets a couple can have, but it is equally filled with many memories such as your child’s first steps, birthday parties, all things reminiscent of happier times. The home can be a hard one to let go, especially if you are not the one wanting the divorce. Kevin Hickey Law Partners will help you look at it from an unemotionally attached party. We will help you look at the facts. Can you afford to stay in the home? Not only can you make the monthly payments, but also can you afford the upkeep? How much are utilities, grounds maintenance, etcetera. It often makes no financial sense to keep the family home. There are typically two ways to handle the family home during a divorce:
- The spouse that keeps the home buys the other spouse’s share of equity. This is normally done by a cash-out refinance if you don’t have the cash on hand (which will change your monthly payments); negotiate the equity in the home for another asset, or a property settlement note.
- The couple can also sell the home during or after the divorce and split the proceeds. Depending on the housing market in your area, this could take several months.
In many cases, it is better to be the spouse receiving his or her portion of the equity and starting a fresh new chapter, which works twofold—financially and emotionally. Often times the reason a spouse wants to keep the home is that they are emotionally trying to hang onto something that just is not there anymore. It can be therapeutic for you and the children to start with a clean slate so to speak. Think of it as a new adventure you are doing together.
Your divorce settlement can either lead you to a place of financial disaster or financial peace. Let Kevin Hickey Law Partners help you gain the peace you deserve.