Women and Finance: A Financial Checklist ofr Navigating the Early Stages of Divorce
Elizabeth Perry, Portfolio Operations Manager
Today’s topic is a heavy one, but a realistic one for so many people. No one enters a marriage betting on the partnership failing in any way, but one thing we can be certain of is that life doesn’t always go as planned. And we all know from either our own personal experiences or the experiences of those closest to us that divorce can be a devastating thing to go through. At Howe & Rusling, our job, which we take very seriously and have helped so many clients navigate, is to ensure that your divorce does not become a financial downfall.
Unfortunately, women frequently fare worse financially after a divorce for a myriad of reasons. Historically in our society, women have been the primary caregivers for their children, taking time out of their career, if not sacrificing it completely, for these responsibilities. As a result, the opportunity for job advancement is diminished compared to their spouses who never stop working. If divorce means you need to get back into the workforce, you will likely start at a lower salary than your ex because of bias against this caregiving “resume gap” and the fewer years of experience that come along with it. Consequently, not being the breadwinner can occasionally mean women do not have full access or understanding of shared family finances.
Confronted with the emotional toll, mental stress and significant change that accompany divorce, it can be easy to allow the financial logistics to slip through the cracks. We have your best interest in mind and will not allow your emotions get in the way of making smart decisions. As experts in our field, we will work with you to ensure that all necessary steps are taken to maintain financial security, enabling you to pursue life as a strong, independent woman. Here are some initial first steps for preventing financial harm from your divorce.
- Get a handle on all financial account information. The more you understand the better.
a) This includes all recent bank statements, brokerage statements, pension and social security statements, deeds for properties, mortgage, auto loan, credit card and any other personal loan or debt statements, employment information, tax returns trailing 5 years, and insurance policies.
b)Create separate copies of all documents – one set to be shared with your team of trusted advisors and another for you to store somewhere safe where only you have access to them.
- Create a new realistic budget for yourself (and children, if applicable) by analyzing historical spending. This can be helpful for your lawyer to negotiate an appropriate amount of money in the divorce settlement.
- Open new checking, savings, and credit card accounts in your own name at a separate institution from where your joint accounts are custodied. Unless assets have been frozen, any authorized account user has full access.
- Keep an eye on your credit. I’d recommend obtaining a copy of your credit report and even monitoring it to know if your spouse is spending down marital assets in any inappropriate ways. And on the topic of credit, be sure to keep up on payments on all accounts regardless of who has historically been responsible for paying the bills because this can damage your individual credit if payments are delinquent.
- Consider opening a P.O. Box. This can be used for all mail associated with your new account statements and trusted team in order to keep sensitive information confidential from your ex.
- Update your beneficiaries on any investments and insurance policies that you have. Your spouse is likely your current beneficiary, and if you’d like that to change, make this a priority early.
- Establish a gameplan for health insurance. Perhaps you are covered under your own plan, but in the event your coverage was through your spouse’s employer, identify options for continuing coverage either through COBRA or obtaining a new plan for yourself.
Remember, you don’t have to tackle this new frontier alone, and we encourage you not to. There is no quick fix for navigating a divorce, but our team at Howe & Rusling wants to help you get every facet of your new financial plan in order so you can confidently move forward spending time doing what you love and let us worry about the rest. Thanks for tuning into Street$marts!
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