From Al and Tipper to Tony and Tracy and now Arnold and Maria, it seems not a day passes without news of the end of a long term celebrity marriage. Invariably amid stories exposing the sorted details of these break-ups are accompanying stories offering advice to the not so famous who are experiencing similar situations; how to navigate the often overwhelming and confusing legal maze, how to deal with the emotional pain and anguish of ending a long- term marriage or picking up the pieces and moving forward when the divorce is final. Consideration must be given having a sound legal and financial life when the divorce is finalized. Here, are some areas to consider:
Retention of assets; often during the divorce process people make the colossal mistake of valuating assets from an emotional view point. A prime example of this is keeping the marital home and assuming the liability for the mortgage. Once the dust of the divorce settles, and things are viewed with greater clarity, many people discover that they can't afford to make the mortgage payments and or upkeep of the home. Given today's' depressed real estate market for many people whose property values have declined, traditional sale or refinance may not be possible. If you find yourself in this undesirable position, immediately seek legal advice.
Paying debt; similar to assets, many agreements made regarding the division of marital debt are made based on emotion and not logical and rational thought. This is particularly true when the divorce process is protracted and acrimonious. Many people become weary and take a do anything to get out approach to settlement. If you gave into this often irresistible impulse and find that you cannot cover the debt you have agreed to assume, seek legal advice as soon as possible. You may have some viable workable options. Remember although bankruptcy is never a preferred option, it is often the only logical option.
Retirement planning; it is commonplace for retirement savings to be divided during the divorce process, particularly in the case of the long- term marriage. A problem arises when retirement assets are cashed out and used to pay ordinary day- to- day expenses or to purchase unnecessary luxury items. While it is difficult to abandon or alter an established lifestyle, using retirement savings to support that lifestyle will prove problematic in the future. It is likely that those who are getting divorced after decades of marriage are not decades away from retirements. You must maintain a nest egg.
Disability and Elder planning; now that the couple relationships is over, it is probably necessary to make changes to disability and elder plans. The answer to the question; who will make health care decisions in the event of incapacitation is not longer obvious. Another question not so easily answered is your care in the event of disability or major illness. Rethink these questions. Have a new health care power of attorney and living will drafted. Check with your insurance agent to determine if existing disability and long term care policies are appropriate to meet your needs.
Estate planning; now that there is a divorce, the estate plan developed for a couple is not appropriate for a single person. Reconsider who will be the beneficiary of your assets. Check the status of life insurance policies. If your former spouse is the beneficiary of your life insurance, you probably will want to change that. Contact your insurance agent to inventory your insurance policies to be sure they meet your needs.
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