In a divorce, couples make countless decisions that impact their present and future financial situations. From dividing assets to determining who takes what debts, from setting the amount of alimony and child support, decisions made at the time of the divorce will follow them for a very long time. Some decisions have a greater financial impact than others. Below are five money issues to keep on the radar.
Carefully Consider Whether or Not to Keep the House
Often, one or both parties of the divorce want to keep the house. This can be for sentimental reasons, practical reasons, or for reasons concerning the children. However, there is a difference between wanting to keep the house and being able to afford to keep the house. In addition to the mortgage payment, houses require insurance, tax payments, improvements, and upkeep. Individuals should think long and hard about whether they can actually afford to stay in the marital home.
Do Your Homework Regarding Health Insurance
In many families, one spouse’s employer covers some or all of the health insurance costs. It is unlikely a spouse will be able to stay on the plan after the divorce. Consider all options for health insurance, rather than just going with the Consolidated Omnibus Budget Reconciliation Act (COBRA) option. While it may seem easier in the short run, the options available on the state health exchange under the Affordable Care Act may be a better and more cost effective fit after a divorce.
Guard Your Credit
It is a good idea to pull a copy of your credit report prior to divorce. In addition to clearly identifying all debt, your credit report can indicate which accounts allow a spouse to co-sign. It is important to remove spouses from accounts after the divorce. However, you should not just run out and cancel all joint accounts – that can be disastrous for your credit. Instead, talk with each account holder about the situation. Explore options such as removing the spouse’s name, while keeping the account. This can preserve the longevity of accounts.
Take a Careful Inventory of Property
When couples divorce, Florida law calls for a fair and equitable division and distribution of property. Without a complete accounting of the property, it cannot possibly be divided and distributed fairly. Take some time to walk through each room. Carefully evaluate the contents. Valuable items, such as art, jewelry, and antiques should be identified. But so should every day household items, including bedding, furniture, kitchen items, and tools. When a family law attorney has complete information, they are better able to negotiate a settlement.
Consult with an Expert
It is a good idea to consult with an expert about complex financial matters. A financial planner or an accountant can assist with questions such as, “How much house can I afford?” and “When can I retire?” Having that information, rather than guessing or hoping, can allow parties to make solid financial choices about their present situation and their future.
Considering Divorce? Hire the Right Attorney
When getting a divorce, having an attorney skilled in family law issues is critical. Eric C. Cheshire, P.A. has over 30 years of experience practicing family law. Contact the office to schedule a meeting to discuss your family law needs at (561) 677-8090.