Financial Tips For The Divorce Process

For people in Kansas, divorce can mean both emotional and financial turmoil. The former can make the latter worse, so it is important to start with a practical plan for one’s finances in the divorce process. People should make a short-term budget that encompasses new expenses, such as new health insurance and a new vehicle. The budget can be revised after three to six months once the person has a better handle on expenses.

One item on the budget might be a new place to live, but some people also opt to keep the house. There are a few things the person considering this should keep in mind: It may simply be too big or too expensive. In addition to refinancing the mortgage, the person must assume other costs associated with owning a house on a single income. Some people may prefer to take assets that are more liquid, such as a savings account. It is also important to look at whether there are tax obligations on an asset, such as a retirement account, and how that affects its value.

Once the divorce is final, there is still work to be done. An ex-spouse who is still an authorized user on any accounts should be removed. People may need to update their wills and other estate planning documents, including powers of attorney and beneficiary designations.

An attorney may be able to assist a person with the divorce process, including property division. Many couples prefer to negotiate a settlement instead of going to litigation. In some cases, it may be easier for each person to take separate assets than to try to divide them. For example, to divide a 401(k) or a pension plan in a divorce, it is necessary to have a complex document prepared called a qualified domestic relations order.