You probably never thought you’d be in a position to need advice about financial planning after divorce. Most people don’t. Unfortunately, sometimes no amount of marriage counseling is enough to avoid divorce, and the process can be challenging both emotionally and financially.

Untangling two people’s finances is often one of the most complicated parts of a divorce. Long before decisions are made about child support or alimony, it’s important to understand your financial picture and prepare for the road ahead.

Every divorce is different, and financial decisions should be made with guidance from professionals who understand your unique circumstances. While this article is not a substitute for legal or tax advice, the following suggestions can help you begin navigating the process with greater confidence.

Work with the Right Professionals

Avoid taking advice from friends, family, or online forums. Divorce laws vary by state, and every financial situation is unique. Consult with a qualified divorce attorney licensed in your state, and consider working with a financial advisor who can help you understand how today’s decisions may affect your long-term financial future.

Track Your Expenses

One of the first steps in divorce financial planning is understanding where your money is going. Tracking your expenses will help you build a realistic post-divorce budget and provide valuable information during the divorce process.

Include regular expenses such as household bills, food, clothing, entertainment, home maintenance, transportation, child care, insurance, and any other costs you regularly pay. Once you understand your current spending, your next step is to project future expenses. Be sure to consider irregular expenses such as vacations, home repairs, and other one-time costs that may come up.

Gather Your Financial Documents

Organizing your financial records early can save significant time and stress later. These documents help provide a complete picture of your financial situation and the assets and liabilities accumulated during your marriage.

Important documents to gather include:

• Bank statements for checking and savings accounts from the past year
• Retirement account statements, including IRAs and 401(k)s
• Brokerage and investment account statements
• Mortgage, auto loan, and personal loan documents
• Credit card statements from the past year
• Recent pay stubs
• A list of assets and liabilities owned before and during the marriage
• Income tax returns from the past three years

Prepare for Unexpected Challenges

Even when a divorce begins amicably, circumstances can change. If one spouse manages most of the household finances, obtaining financial records later may become more difficult.

Collecting important financial documents before filing for divorce can help ensure you have the information you need if the process becomes more complicated.

Avoid Major Financial Changes

During divorce proceedings, avoid making significant financial decisions without consulting your attorney. Changes such as updating beneficiaries, transferring assets, modifying retirement accounts, or changing your estate plan could create unintended legal consequences while your divorce is pending.

Be Careful With Spending and Saving

Resist the temptation to make large withdrawals from joint accounts or dramatically change your spending habits. State laws often determine how marital assets should be handled during divorce, and acting too quickly could negatively affect your case.

If you and your spouse cannot agree on how finances should be managed while the divorce is pending, your attorney may recommend pursuing a legal separation or requesting temporary financial orders from the court.

Know When to Ask for Help

Divorce affects much more than your legal status. It can impact your retirement plans, investments, taxes, cash flow, and long-term financial security.

Divorce can create many financial decisions that require careful consideration, from dividing assets to understanding how your choices may impact your future goals. In this video, we discuss important financial considerations to keep in mind during a divorce and how working with the right professionals can help you navigate this transition.

Watch the video here:

Working with both a qualified divorce attorney and an experienced financial advisor can help you make informed decisions throughout the process. At Adams Wealth Partners, we understand that divorce is more than a legal transition. It’s a financial one, too. Our team can help you create a personalized financial strategy that supports your goals and helps you move confidently into the next chapter.

Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.