Although going through a divorce can feel like an emotional roller coaster, managing your money is essential to moving on. Especially if your ex-partner handled all the major financial decisions, the right financial planning for divorcees is essential.
Instead of utter turmoil, divorce can also be an opportunity to organize a strong financial future for yourself. To help, our team put together this checklist of essential items to tackle as you navigate your future.
While your specific actions depend on your unique circumstances, use this checklist as a road map to assess your current financial situation, redefine your goals, and establish a solid foundation for your future financial well-being. You’ll take some of these steps during your divorce and many after. Consult your divorce attorney along the way on timing and fit with your situation.
Gather Your Documents
Getting your documentation together is a basic first step toward smart financial planning for divorcees. Think of it as collecting documentation as an inventory of finances. Just as you wouldn’t go into a negotiation without knowing your assets, a fair settlement depends on you having a clear awareness of your financial situation.
With the help of the documents below, you can have the necessary paperwork in place to give yourself the upper hand during the divorce process.
- Essentials: Marriage certificate, past 3-5 years of tax returns, pay stubs and W-2s
- Financial Accounts: Statements for checking, savings, investments, retirement accounts (401(k), IRA), mortgages, loans, credit cards
- Property & Insurance: Deeds/titles (house, car, etc.), life insurance policies, beneficiary designations on all accounts
- Legal Agreements: Prenuptial agreement (if applicable), separation agreement (if temporary)
Separate Your Finances
Even though you were once part of a team, it’s time to become financially independent on your own. Although it may seem difficult, separating your finances is an essential step in creating a promising future.
The tasks below can help you handle this change with clarity and control. By following these actions, you can see your unique financial situation clearly and give yourself the confidence you need to go forward.
- Create new accounts with banks in your own name.
- Transfer the direct transfer from your paycheck to your new account.
- Review your subscriptions and automatic payments, then update them with your new accounts.
Manage Debt and Credit
By tackling debt and credit, you can avoid future financial stress and establish a strong foundation of financial independence, empowering you to move forward with confidence. This proactive approach not only improves your financial well-being but also reduces anxiety and allows you to focus on building a strong future.
Complete the following list of tasks to manage your debt and credit moving forward:
- Review joint credit card statements and close needless accounts.
- Apply for new credit cards to create your own credit history.
- Get a fresh credit report to locate individual debts.
- Build a plan to pay off current debt (repayment plans, consolidation, etc.).
Review Insurance Needs
Don’t forget about your insurance! It’s possible that your current coverage is insufficient or is too much for your new single status. Confirm that you have the appropriate coverage in place by reviewing your health, life, auto, and homeowners/renters insurance.
If there are kids involved, updating your insurance is crucial since you want them covered in case of an emergency.
By completing the tasks below, you can confirm that you have the right safety net in place to safeguard yourself and your loved ones going forward.
- Health insurance: Update options for coverage and beneficiaries.
- Life insurance: If there are children involved, think about keeping or modifying coverage.
- Car insurance: Verify each automobile has a separate policy for auto insurance.
- Homeowners or renters insurance: Update beneficiaries and coverage.
Seek Professional Guidance
Financial planning for divorcees is one of our signature services at Laurel Wealth Planning.
Over two decades, our team has helped divorcing or recently divorced clients move from uncertainty to confidence, control, and freedom through our divorce financial planning.
To schedule a complimentary meeting, email laura.kuntz@laurelwealthplanning.com or call (952) 854-6250. Let’s see if we are the right financial advisor for you based on your wants and needs. Even if we determine we’re not a good fit, we can assist you in the next step of finding someone who is!
About Laura
Laura Kuntz is a Senior Wealth Manager at Laurel Wealth Planning, a full-service, fee-only firm based in Minneapolis, Minnesota. A sounding board and voice of reason, the firm guards clients’ financial interests and goals at all times, freeing them to live the lives they want. Many of Laura’s clients are women navigating significant life transitions such as changes in marital status or retirement, and her ability to demystify complex financial concepts empowers clients to make informed decisions with confidence. Laura’s approach is client-centered, focusing on integrating all aspects of a client’s financial life to add meaning and value.
Laura earned a bachelor’s degree in economics with the highest academic honors from the University of Wisconsin-Eau Claire, after which she considered law school. She shifted her focus to the burgeoning field of financial planning after reading a life-changing article in Forbes. After honing her skills in various roles, Laura pursued further education, obtaining her CPA certification and a master’s degree in taxation from the University of Minnesota. She then applied her expertise to helping Fortune 500 executives and multi-millionaire business owners, climbing the ranks to director. In 1998, after her position was eliminated, Laura founded Laurel Wealth Planning. Her firm was built on the principle of providing objective, holistic financial advice. Her mission was, and remains, to help clients build and maintain financial independence with honor and decency. The team feels that Laura’s warm, open-minded, and down-to-earth style is one reason clients are drawn to her, and one of many reasons why they stay.
Laura is honored over the years to have been invited by her peers in law and accounting to address them on the complex issues of financial planning and wealth management. Beyond her professional achievements, Laura is deeply committed to giving back. She serves on the board of NPH USA, supporting orphaned and abandoned children in Central and South America, and helps direct the Father Wasson Legacy Endowment, which creates long-term financial stability for ongoing support of NPH children. When she’s not working, Laura enjoys documentaries, historical fiction, nature, and spending time with family and friends. To learn more about Laura, connect with her on LinkedIn.
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Laura, the founder of LWP, is a Senior Wealth Manager, Chief Investment Officer and Shareholder. She has a master’s degree in tax and is an excellent listener. While she is a sophisticated financial planner with experience in complex issues, her priority is ensuring a financial plan works for people.
