Financial tips for dealing with divorce

Financial tips for dealing with divorce

When a couple in Michigan gets divorced, the partner who was less involved in managing marital finances may be at a disadvantage both during and after the separation. This tends to happen to women, who are more likely than men to relinquish financial matters to a spouse.

Along with the financial confusion, the emotional stress of divorce can make this a very difficult time. The lower-earning spouse in the relationship may want to work with a financial advisor who understands the challenges of going through a divorce. For example, one issue that may arise is that a spouse might get assets in the divorce that are not easy to access for cash, such as a home. The person may want to take out a loan against one of these assets, such as a home equity line of credit, if necessary.

Planning for the future

Individuals should also start looking forward to their long-term financial needs. While the person might be able to rely on the settlement for some time after the divorce, they may need to think about stepping up a career to ensure more financial stability in the future. It can take some time to gain the necessary knowledge and skills to manage money well and become self-supporting.

During the divorce process, people who are less financially knowledgeable should also make sure they understand the implications of the settlement. For example, there may be taxes on the sale of certain assets. Others, such as retirement accounts, may be taxed on withdrawal, and this can make their actual value less than their face value. Homes can be costly in terms of insurance, taxes and upkeep. It can be particularly important to understand this if each spouse is taking certain assets of roughly equal value. A lawyer can help a soon-to-be ex-spouse ensure a fair property division process.

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