After a divorce, the last thing most people want to do is consult another attorney. However, regardless of your age or whether or not you have kids, it’s important to consult both financial and legal experts to be sure your estate and financial plans are updated to reflect your new circumstances.
If you weren’t working with a financial or estate planner during the divorce, it’s time to do so now. You are literally starting a new household, and that means new money issues to face. Here are some ideas to consider:
Start with a financial planner: Get a baseline look at your finances as soon as possible after the divorce is final. Expenses for the newly single can grow quickly and unexpectedly, and a financial planning professional can help review your new spending and savings needs, compare strategies to achieve long-term goals and give you critical tools to protect your assets and loved ones if you die suddenly.
Talk with an estate planning attorney: Coordinate the activities of a financial planner with an estate planning attorney who can tailor an estate plan to fit your needs. If you have kids, and you plan to remarry some day, you may want to ensure that specific assets are guaranteed for them when you die. In some cases where a spouse dies unmarried with minor children, the ex-spouse might automatically gain control of assets that were earmarked for the kids. If you don’t want that to happen, you need to plan for that legally.
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Make a guardianship plan for your kids: If your children are minors, it’s particularly important to make sure you and your ex-spouse have a guardianship plan for who will raise them if you cannot. If there are any wealth issues that become effective once your children reach adulthood, it’s important to establish an efficient legal structure for distributing those assets as well as appointing the right trustee to guide your kids through that financial transition.
Plan for special needs kids: If a disabled child is expected to need some type of lifetime assistance, consider a special needs trust to protect your child from having to give up any public financial assistance or access to medical care that could be taken away if an inheritance suddenly disqualifies them for such programs. When assets are held in trust, they generally are not counted as the child’s assets.
Re-visit insurance: If you’re newly single, you need the best health coverage you can afford for yourself and your kids, but life, property, liability and disability insurance become doubly important, particularly if you failed to address those needs during the divorce. Consult a financial planner on these issues.
Review account titling and beneficiaries on investments: Double-check to make sure the assets were divided correctly in your divorce, and make sure all beneficiary information is correct. A little “homework” now can save lots of headaches later.
Karin Grablin, a certified financial planner with Dictor & Martin in Sarasota, can be reached at (941) 906-7222, or visit www.dictormartin.com.