You’re starting a new life. It’s not one you expected. It’s not one you may have wanted. But here it is. A new chapter is beginning. And as difficult as it may be to think ahead to your return to the single life, when you are facing a divorce, it is more important than ever that you look ahead to your future and protect yourself for the years to come.
One of the first and most urgent steps is to look to your own financial well-being, and that means considering issues you might not have thought of when you and your soon-to-be-ex were hammering out the terms of your divorce.
Studies show, in fact, that financial mismanagement is one of the leading causes of divorce in America today. So, when you are leaving your marriage, it’s imperative that you be your own best friend and fiercest advocate. Because now, more than ever, is the time to get your financial house in order. Here are some issues you may not have considered, but you absolutely should:
Lesser-Known Financial Risks During & After Divorce
Who Gets the Workers’ Compensation and Related Employment Benefits?
If you’re going through a divorce, chances are you’ve updated your life insurance policies and maybe even rewritten the terms of your will. However, you probably haven’t considered if you or your ex will retain a share of the workers’ compensation benefits or other job entitlements should one of you get sick or injured. For instance, unless you clearly define how such insurance policies are to be allocated following the divorce, you may find yourself having to divide the benefits of a policy enacted while you and your ex were still married.
In fact, because the divorce process can be quite lengthy and on-the-job and personal injuries can happen at any time, it’s often best to get such matters settled quickly, in writing, and legally early on. That is especially true when you are trying to protect your assets and build your financial future from the ground up as a newly single person. To do this, though, you need to know something about workers’ compensation and the law, which vary from state to state.
For instance, if you work in Florida and your company has more than four employees, then you are legally entitled to workers’ compensation if you are injured on the job. However, if you are going through a divorce, then how, when, and to whom those benefits are dispersed might be impacted, unless you have the terms clearly set out ahead of time.
Failing to Seek Expert Advice is Risky
When you’re trying to settle the distribution of your or your ex’s employment benefits, it’s important to remember that most benefits packages have a lot of moving parts. For example, workers’ compensation usually involves far more than just payments relating to workplace injuries. These packages can also include a host of other benefits, from disability coverage to compensation for medical care, to death benefits.
And this is just the tip of the iceberg of things to consider when you are working to disentangle your finances from those of your former spouse. This isn’t something you should do alone. But that also doesn’t mean that you should content yourself with the first professional who happens to be available. It’s an emotional time, and you may not feel entirely confident to make sound decisions as you navigate this turbulent time in your life. That’s okay.
But remember that you want competent people you can trust on your side as you are building your new life. That means finding a divorce attorney you have faith in, one who knows their stuff and is willing to go to the mat to protect you and your interests. So, don’t be afraid to shop around before settling on an attorney. Ask questions and do your research. Above all, if you feel your lawyer isn’t serving you to their utmost, find another. After all, it is your future. It is up to you to protect it.
Where Does the Money Go? Create an Accurate Budget
While you’re recruiting the best attorney for you, your future, and your family, you might also get your feet wet in the exciting world of personal accounting. After all, getting, and keeping, your financial house in order means you’re probably going to be doing some pretty fancy math. But if that thought gives you hives, you’re not alone. Thankfully, there’s a host of accounting technologies that are both sophisticated and easy-to-use.
Best of all, you don’t have to break the budget to access the software you need to make your budget! For example, you can download a range of free apps right to your computer or cell phone to help you track your spending, build a budget, and even keep an eye on your investments!
Getting Married Again? Get a Prenup!
You might not want to think about it now, as you go through or recover from your divorce, but chances are you’re going to fall in love again. You may even remarry. But if you do decide to take on a new life partner, and especially if you decide to walk down the aisle again, don’t let all that hard financial work you’ve done in this important period in your life be for nothing.
Make sure to sign a comprehensive pre-nuptial agreement or at least have some pretty heavy financial conversations before you and your new beloved decide to make it official. Learn their financial past and present, and then construct your financial future — both as a couple and as two individuals. Above all, continue to be your own best friend and advocate. You have come too far and overcome too much to ever turn back.
The Takeaway: You Must Protect Your Financial Future
Even the most amicable of divorces is tremendously painful, and the recovery period is often long. But that doesn’t mean that you have to face financial hardship as you work to heal your heart. When you are going through a divorce, it is imperative to protect your financial future, and that means addressing considerations you may never have imagined.