Financial planning during a divorce

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Spouses in Wisconsin who are ending a marriage should make a post-divorce budget. This can be particularly important for a partner who has not been very involved in the family finances. They should also think about how they will pay for the divorce and keep costs down.

Couples will need to divide both assets and debts. This can be a complex process. For example, they’ll want to consider how much liquidity they require in their assets and what the tax implications might be of keeping certain assets. Some assets may be worth less than they appear to be once taxes are accounted for. Keeping the home may require special consideration since it should be refinanced to take one spouse’s name off the mortgage. Owning a home also requires a certain amount of cash flow, and this may not be feasible in some cases. If there are children, the parents may want to discuss support obligations as well as how they are going to pay for college education.

Once the divorce is final, certain documents may need to be changed. This could include beneficiary designations and wills. Ex-spouses should be removed from accounts. It’s also important to think ahead and make contingency plans if necessary. For example, they may need to purchase insurance in case a spouse who pays support dies or becomes disabled.

An attorney could help a client prioritize the necessary tasks in a divorce and consider what property may be most important. This can be an emotionally overwhelming time, but it’s important to make good financial decisions. Going into divorce negotiations with a plan can help a person decide what points to be flexible on. If negotiations break down, the attorney may also be helpful during litigation.