For many divorcing couples the most complex issues the parties will likely deal with will revolve around property division and assets. Our Michigan readers may find it helpful to learn the stress and complexity which surrounds financial decisions during a divorce can be eased if the parties consider the following before an impending separation.
For many people who are divorcing, looking into getting or changing one's existing life insurance policy may not even be a discussion item. Nevertheless, it is important for one or both parents to consider taking out a life insurance which would protect the future of their child in the event of a parent's untimely death. Obtaining life insurance can be structured into a divorce settlement.
Generally, during a divorce parties will have to grapple with the issue of marital and individual assets. In addition to assessing assets, the parties should also look into their debt which includes, but is not limited to credit card debt, home mortgage, and any line of credit they may have. Before the divorce is finalized, it may be wise for the couple to place a hold or freeze on any financial accounts.
More than likely divorcing couples never considered taking the time to determine what their expenses would look like should in the event of a divorce. It is important to estimate what one's monthly expenses may be like post-divorce. Estimating such expenses will help the party determine how much money they will need to live. Furthermore, it is important for a divorcing couple to look at their retirement accounts and how the divorce will impact such accounts. Additionally, a divorcing couple should look into how the divorce will affect their taxes. Finally, it is important to go through all financial paperwork and other policies which list a beneficiary to ensure that the information is updated.
Financial issues that a divorcing couple has to deal with can get complex. Rather than trying to make sense of it all alone, a divorcing couple may find it helpful to seek the advice of a family law attorney familiar with such issues.
Source: Investopedia, "How To Manage Your Finances Through A Divorce," Leslie Kramer, May 16, 2014