Planning your financial future with your significant other is critical for a financial stress-free partnership but even more so when the unfortunate happens. Open communication and an optimized plan with your partner is best practice for also setting up mutually respected divorce plan based on finances. It may sound like poor taste, but even a financial outline based upon the marriage would be dissolved, during the marriage, is a great way to have a stress-free divorce. The following are some best practices when it comes to financial planning a stress-free divorce.
The First Step
Divorce brings out some of the ugly disagreements of a partnership. Yet it is important to have a clear understanding of the language of finance during the process. The first step in the divorce process would be to create a post-divorce settlement budget. Money is one of the biggest issues of a divorce so it is in the best interest of both parties to come together and create a mutually respected budget.
The first step would be to assess the assets and the liabilities or the marriage. Each partner will need to discuss what debts need to be paid as well. Even down to the house will need to be discussed and agreed upon. The home will either need to be kept by one of the spouses or sold and the profits divided between the two.
When children are involved in the divorce process, planning for their financial future as well can be a process within itself. Begin to think about who will pay for their higher education or if they will need to depend on financial aid. Even discussing who will be providing health care for them are all aspects of the divorce that will need to be planned out. Combining efforts in planning for your children in a year to 10 years from now will be in everybody’s best interest. Child support, the process of paying another spouse of lower income to support the children, is another part of the divorce process with children.
It takes a combined effort of both you and your spouse, both attorneys, and your financial advisor to facilitate a smooth, financially responsible divorce. Money is a difficult subject to speak about with some couples but this is a situation where open communication, negotiation, and sacrifices have to be made, it is important to be respectful and civil throughout the process.
An alternative to an attorney could be a mediator, in case you both agree on what the financial outcome should be of the divorce. That can save both time and money.