By Joe Gross, CDFA®
I’ve spent the past 25+ years as a Certified Divorce Financial Analyst, helping individuals navigate the financial complexities of divorce. During that time, I’ve come to realize that you can make it to the other side of divorce with less stress and anxiety if you just follow a few simple steps. My goal is to share these steps with you today, so you can also have a smooth transition into life’s next chapter.
Don’t Rush A Divorce
First and foremost, don’t rush the divorce process. There are so many difficult decisions to make: property division, child support, parental responsibilities. Each one of these decisions has a long-term impact on your emotional and financial well-being.
Take a deep breath, and take your time making each decision. I even tell my clients to remove their emotions from the equation and think of each decision as a business transaction. This may sound cold, but emotions are at an all-time high during divorce. It’s critical to calm these emotions and make decisions as rationally as you can.
Getting organized before a divorce can help minimize stress and reduce the chances of running into problems down the road.
Start by making a list of all your assets, liabilities, and financial accounts, including:
Estate planning documents
Tax returns for the past few years
Retirement account statements
Real estate deeds and car titles
You’ll need to give these items to your attorney. It may also be helpful to divide them up into marital property (i.e., assets and debts obtained during the marriage) and non-marital property (i.e., assets and debts obtained prior to or after marriage).
Know Your Cash Flow
Even if you anticipate having a large net worth after divorce, it’s important to know what your cash flow will look like moving forward.
You don’t necessarily need to budget and track every expense, but you do need a clear idea of how much money you’ll have coming in each month.
Write down your income, including your salary, alimony, child support, dividend income, and so on. Then write down all of your expenses. (Don’t forget one-off expenses like property taxes and private school tuition that may not show up on your monthly bank statements.)
Seeing these numbers in writing will help you get comfortable with your new cash flow and help you prepare for any unexpected expenses.
Plan Ahead for Post-Divorce Life
Life drastically changes after divorce. Instead of dividing financial tasks between the both of you, you become solely responsible. Now is a good time to start:
Making a legal name change
Updating all assets, documents, and liabilities
Changing beneficiaries and emergency contact information
Setting up a filing system to keep tax records, investment documents, insurance policies, and legal information organized.
Be Gentle With Yourself
No matter how amicable you try to make it, divorce is messy. It’s emotionally, physically, and financially draining.
Go easy on yourself. You may be in a fog right now—and that fog may last for quite some time. Seek therapy or counseling if you need to. Do whatever it takes to protect your mental and physical health.
Lean On Advisors
Divorce can be lonely. As you go through the process, lean on your team of advisors. Go to them for advice. Ask them questions if you don’t understand something. Voice your concerns. Let them help you transition into life’s next chapter with peace and clarity.
At JGP Wealth Management, we specialize in helping our clients navigate divorce-related issues. If you’d like to partner with a financial planner who understands your unique needs and inspires you to be more confident in your financial decisions, contact Joe today at 503-446-6450 or email@example.com.
Joe Gross is first vice president and senior financial advisor at JGP Wealth Management, an independent, fee-based financial advisory firm in Portland, Oregon. With over 25 years of experience under his belt, Joe is passionate about putting his clients first and helping them stay focused on their financial goals, inspiring confidence in their future. As a Certified Divorce Financial Analyst (CDFA®), he specializes in addressing the unique financial issues of divorce. Joe is known for his tenacity to keep clients on track toward their dreams and for his attention to detail, which is second to none! His clients know that nothing will slip through the cracks when working with Joe!Joe graduated from the University of Arizona with a bachelor’s degree in finance. Outside of work, he enjoys being involved in the community and is actively involved with organizations close to his heart. Joe is a former president and current board member of the ALS Association of Oregon and Southwest Washington and a long-time member of The Multnomah Athletic Club. In his free time, he enjoys fly fishing, spending time with his family, and cheering on his alma mater, the University of Arizona. To learn more about Joe, connect with him on LinkedIn.