Four Areas to Focus on for Financial Recovery
Going through the breakup of a marriage and an ensuing divorce can be devastating financially, jeopardizing your current and future security. Getting what you are entitled to in a settlement is crucial to your recovery, but there are also steps you can take during divorce proceedings and in the months after to ensure you and your loved ones are protected.
Financial Planning After Your Divorce: Four Areas to Watch
Even in the most amicable of divorce cases, there is likely to be a period of adjustment needed. You may have spent years building financial security and planning for your future with your spouse. Some dramatic charges may be needed. The following are four areas to consider:
It is not uncommon for your credit to take a hit after divorce. Your former partner may have engaged in reckless spending habits or you may have debts that went unpaid during your divorce proceedings. In some cases, it is simply of matter of having to re-establish your individual credit after years of being listed alongside your spouse.
Experian advises making sure all marital debts are dealt with before your divorce becomes final and eliminating all joint accounts. Begin rebuilding your own credit score by taking out a small loan or establishing credit with a local retailer and making payments on a regular basis.
Learning to adjust to one income after a divorce or having to reenter the workforce after years of staying at home and raising a family is a challenge. While your budget may be stretched at this point in time, it is important to put something away in savings regularly.
Traditional thinking dictates having three months worth of expenses in an emergency account. Bankrate recommends that if you have children or others who are depending on you, six months worth of emergency savings is a more reasonable number.
Under Section 61.075 of the Florida Statutes, you are entitled to an equitable share of all marital property, which includes any retirement accounts that accumulated over the course of your marriage. Be aware that in order for a distribution to be made from a 401k or other fund, you will need a Qualified Domestic Relations Order (QDRO) to be issued by the judge. You will also need to do some careful planning in how to rollover the funds and when to take distributions to avoid potential tax penalties.
Wills and Estate Planning
During your divorce, carefully review your estate planning documents to determine any changes that need to be made. Create a new will, with an updated inventory of assets and listing your beneficiaries. Also consider whether to purchase life insurance or making changes in existing policies.
Reach Out to Us Today for Help
When going through a divorce and dealing with all the issues involved, the law firm of attorney Vanessa L. Prieto provides the legal guidance you need and acts as a strong advocate on your side. Call or contact our Fort Lauderdale divorce attorney online today and request a consultation to see how we can help you.