Divorce in California presents challenges to the people involved, both financially and emotionally. The emotional difficulty may be unavoidable in many ways, but being proactive about finances before and during a divorce could make things much easier going forward. Here are a few things people can do to help prepare financially for divorce.
Among the first steps is to evaluate the overall financial circumstance of the couple and the likely circumstances of the individuals following the divorce. Retirement savings, insurance requirements, funding for education and cash flow should all be examined. New goals should be developed as well as new strategies for achieving them.
Divorce is likely to dramatically change the income and expenses of the parties. A professional like an attorney or financial planner may be able to help create an outline of expected monthly costs, including transportation, housing, food, utilities and insurance. Debt should also be accounted for as creditors may seek to collect joint marriage debts from either spouse, even if he or she did not personally incur the debts.
Estate planning documents often require revision following divorce. Beneficiaries should be changed on life insurance policies, and the person’s will should be updated, especially if his or her ex-spouse was named the executor or main beneficiary. Retirement plans should be examined as well and may need an extra boost to get back on track.
People who were married for at least 10 years may qualify for benefits from Social Security based on the income of their ex-spouse, so that should be taken into account as well. In a case where a California couple is divorcing, an attorney may be able to help. An attorney with experience in divorce law might draft and file the petition to initiate the process or help provide a breakdown of finances and negotiate property settlement.