Typically we find that the standard of living post-divorce drops. This is due to the pool of investments being separated and now having to support 2 separate households versus 1. Both parties involved in a divorce should prepare their strategy appropriately.
Financial considerations for post-divorce*
- Look to have a financial advisor who has earned the CFP® (CERTIFIED FINANCIAL PLANNER™) or CDFA™ (Certified Divorce Financial Analyst™) prepare hypothetical scenarios that will show the potential future impact of various financial options.
- Don’t live beyond your income – this sounds simple but the standard of living typically drops after the divorce is final due to the now-separated pool of assets being used to pay for two separate households versus one.
- Evaluate your assets, liabilities and your new cash flow.
- Realize you will not get everything you want –make a list of NEEDS and be prepared to compromise.
- Protect your retirement assets – use a QDRO and have the appropriate paperwork prepared as soon as possible.
- Use debt sparingly – get a copy of your credit report and close all joint accounts.
- Consider various forms of professional assistance – discuss collaborative law and mediation before signing with anyone.
North Star has three advisors who have completed and achieved their CERTIFIED FINANCIAL PLANNER™ and Certified Divorce Financial Analyst® designations, a unique blend of expertise, to help you evaluate the impact of financial decisions when going through a divorce. You may view their information by going to their advisor pages for Andy Tate, Ben Setterlund, and Jane LaLonde.