Professional financial advice is crucial during a divorce

When you’re going through a divorce, you wouldn’t share a family law attorney with your estranged spouse. You shouldn’t share a financial advisor either. Regardless of how amicable your divorce may be, you have to start looking out for yourself and your own financial well-being.

If you and your spouse already have a financial advisor, you need to get your own. If the two of you don’t have one, it may still be worth your while to hire one. This is particularly true for people with a large amount of assets, those who have been in a long-term marriage and/or those who aren’t used to managing household finances themselves.

Learning what your expenses are, how to make a budget and how to live within that budget is crucial to those living on their own for the first time or after many years of marriage. Budgeting for one is also very different than for two.

Don’t wait until after the divorce as you try to navigate your new financial status as a single person to get financial advice. Seek it out during the divorce. A financial advisor can help you and your attorney as you work towards the best settlement for you. A financial planner, like your family law attorney, can help you make wise decisions at a time when your emotions are likely taking over.

Your Florida family law attorney can probably recommend a financial advisor in your area who can provide you with the help you need. Having sound financial advice coupled with experienced legal guidance can be crucial to entering this new phase of your life on sound financial ground.

Source: Daily Finance, “Divorcing? Why You Should Hire a New Financial Adviser,” Krystal Steinmetz, Nov. 16, 2015

How divorce can affect your credit

If you are going through a divorce or feel that filing for one may just be around the corner, you are likely aware that doing so can take a significant financial toll on you. This is true whether you have significant assets at stake or not. However, you can protect yourself — and your bank account — by being prepared.

Many people are not prepared and learn some very difficult lessons when they find themselves buried in debt or unable to qualify for a loan. Taking some time now to assess your financial situation in terms of your credit could help you avoid some messy complications in the future.

One critical step you can take in protecting your financial well-being is to collect and keep records of all your financial accounts, shared and individual. Doing so can help identify any underhanded transactions your ex may make out of bitterness or spite. Failure to do this could leave the door open for wild spending by your ex which, when done with joint accounts, can affect your financial situation dramatically.

Opening individual accounts can also be a wise move. This can mean a credit card in only your name or a checking account. Having your own accounts allows you to establish or build a credit history and have access to funds if joint accounts are frozen. However, it is important that you not mistake hiding money for protecting yourself.

Finally, staying current with your financial responsibilities will be essential. If you have been ordered to pay child support or agreed to make mortgage payments until the divorce is finalized, it is wise to make these payments in full and on time. Otherwise, you (and your ex) could face harsh court penalties and steep fines. In this same vein, you will also want to make sure your ex is keeping up with his or her financial obligations in regard to shared accounts.

Bad credit or lack of a credit history can result in serious damage to your credit score, which may not be cleared up for a whole decade. In addition to discussing your assets and economic goals with your attorney, you may also want to consider speaking with a financial planner who can help you make decisions that minimize costly financial mistakes.

Source: The Huffington Post, “The 5 Nastiest Credit Surprises for Divorcing Couples,” Nov. 18, 2015

Clearing up some misconceptions about alimony in Florida

Getting divorced can make people do and say things they never expected thanks to high levels of stress and heated, overwhelming emotions. For instance, you may typically be the kind of person who is level-headed and focused on seeking resolutions through collaboration. However, if you feel threatened or scared about your future, you may jump to conclusions or react in surprising ways.

For instance, we often hear people make comments like, “I’m going to take everything in the divorce,” or “I won’t give you anything,” when people talk about property division or financial support post-divorce. But the fact is you won’t have complete control over such things. You will either need to work through the matter with your ex or leave it up to the courts. 

Another misconception about financial support after marriage relates specifically to alimony. Too many people assume alimony is something that is automatically ordered in every divorce. The truth is that it is up to the courts to decide whether to grant alimony or not. It may also be included as a term in a prenuptial agreement but that will need to have been approved by the courts as well.

Further alimony is also not something people typically receive for the rest of their lives. In most cases, if alimony is awarded at all, then it is awarded on a temporary basis. The length of time a person may receive spousal maintenance depends on many factors and reflects the specific reason why someone would need financial support in the wake of a divorce, from making the transition out of marriage to rebuilding a career.

Understanding alimony laws in Florida as well as how they apply (or do not apply) to your individual situation can be crucial in helping you understand your options and know what to expect. Discussing any misconceptions, concerns or questions with your attorney can get you to a place where you can make appropriate decisions and make a plan for the future.

What will happen to our marital home in a divorce?

Being married means that you and your spouse will share many things, from children and homes to pets and retirement funds. When you get divorced, untangling these shared assets can be one of the most difficult things to do.

In terms of belongings, real estate can be a particularly thorny part of asset division. Marital homes and other properties aren’t just high-value in regards to money; they can also be of great emotional value to you and/or your soon-to-be ex which can make it even more complicated to know what to do with them in a divorce. 

It is common for people to want to hold on to certain property (like a marital home) for sentimental or economic reasons. This is certainly a possibility for many people, but it is crucial to understand the financial ramifications of holding on to shared property post-divorce. If you are the one keeping a home, for instance, you may need to refinance the house, qualify for a loan in your name alone and take on the full financial responsibility of maintaining a home.

If you are like many people across Florida, holding on to shared property by yourself is simply not something you can or want to do. In these situations, it may be necessary to sell your home. Generally speaking, this means that you and your ex will give up the property and split whatever comes of the transaction. This could be a profit or a loss, depending on the terms of the sale.

There are other options that you may want to consider, from renting a property to keeping the property in both people’s names, but these and similar options can require extensive cooperation and clearly drawn lines regarding how the responsibilities will be divided and/or shared. Unless you and your ex are on good amicable terms, these may not be reasonable options.

Whatever you decide to do with real estate assets, the fact is that there will typically be legal complications that arise and complex matters that should be addressed before parties agree to anything. Working with an attorney during this process will be vital.

Source: The New York Times, “Divorce and the Shared Mortgage,” Lisa Prevost, Oct. 30, 2015