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Financial planning during and after a divorce

A divorce can play havoc with the finances of both individuals involved in the separation. This is particularly true of couples who have children, but any Connecticut resident that has experienced divorce can attest to the financial strain it can put on the present and the future. Thankfully, there are ways to prepare for the upheaval in finances a divorce can present. 

A good first step is to determine which kind of state law affects asset division. In Connecticut, which is an equitable distribution state, assets accrued by both parties during the marriage are considered marital property and are divided equitably, but not necessarily equally. How assets are divided in equitable distribution states are determined by a family court based on need, child custody and other factors. 

Consideration of assets like 401(k) and retirement plans can be even more complicated. A qualified domestic relations order, or QDRO, is required to be filed concerning assets that may name the second spouse as a beneficiary, but that are not in that spouse's name. Thinking about these issues early in the divorce process is a good idea that may help smooth the road moving forward. 

Connecticut residents know how painful divorce can be, both emotionally and in a financial sense. Thankfully, with the help of qualified professionals, including experienced divorce attorneys, the process can be ameliorated to a degree, by working with both spouses toward a mutually agreeable divorce settlement. The sooner this happens, the sooner both individuals can move forward in their single lives, happier and healthier having successfully negotiated their divorce.

Source: thestreet.com, "How to Survive Financially After a Divorce", Thomas Scarlett, Feb. 21, 2016

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