Going through a divorce can be both liberating and overwhelming. As the dust settles and emotions find their balance, one crucial aspect often demands immediate attention: Your financial well-being. This is where a financial advisor can step in to help.
If you’re experiencing divorce and have questions around the following five topics, you may want to hire a financial advisor.
How Assets and Property Will Be Divided in Divorce
Dividing assets and property can be complex and contentious. A financial advisor can help you assess the value of various assets, such as real estate, investments, retirement accounts and personal property. A financial advisor will also be able to guide you in negotiating a fair settlement that considers both the immediate and long-term financial implications.
How to Budget and Financially Plan Following a Divorce
Naturally, divorce will cause a significant change to your financial situation. A financial advisor can help you create a post-divorce budget that reflects your new income, expenses and financial goals. They can also assist in developing a comprehensive financial plan to ensure you’re on track to meet your defined financial goals.
Related: How to Recover and Rebuild Your Finances After a Divorce (Webinar)
How to Plan for Retirement Post-Divorce
It’s likely that your divorce will have an impact on your retirement plans and goals. A financial advisor will work with you to set realistic retirement goals based on your new circumstances – considering factors like age, expected retirement date, desired lifestyle, and any financial obligations from the divorce settlement.
They can also help you understand the division of retirement accounts – such as 401(k)s and IRAs – and recommend strategies to rebuild your retirement savings, taking advantage of tax-efficient investment options.
How to Manage the Tax Implications of Divorce
Divorce will have tax implications that are critical to understand. A financial advisor can work alongside your tax professional to help you navigate issues related to:
- Alimony and child support tax treatment.
- Property division and capital gains taxes.
- Retirement account division.
- Tax filing status.
- Dependency exemptions and child-related credits.
- Property transfers and gift tax.
How to Update Insurance and Estate Planning Documents
A divorce can necessitate changes to insurance coverage and estate planning documents, such as wills, trusts and beneficiary designations. A financial advisor can work with you to review and update these documents to reflect your current wishes and protect your financial interests.
Overall, a financial advisor can provide objective advice and expertise during this tumultuous time, helping you make informed financial decisions that set you up for a stable and secure future after divorce.
If you’re interested in seeing how our team can help you throughout your divorce, we invite you to schedule a complimentary consultation using the link below. You can also learn more about our firm, and our process.
Bautis Financial Advisor Commentary: August 29, 2023