It is no secret that the end of a marriage can be costly. Additionally, it can be difficult for individuals to adjust to their new financial paradigm after a divorce, as some Connecticut residents are already aware. Thankfully, planning ahead in a financial way for divorce can cut down the learning curve after the fact and lead to a smoother transition into single life.
The requirements of a single budget are vastly different than those of a joint budget, and the influx of funding can be as much as halved or more when a divorce is finalized. This means pre-planning is key in preparing for that eventuality. Determining priorities is a good place to start -- for example, individuals without dependents may not need to worry so much about life insurance following a divorce, but personal benefits may become more important.
Estate planning will also be important, as elements will need to be rethought. For example, one would not necessarily wish an ex to have control over healthcare decisions because the paperwork was never changed. Changing wills, powers of attorney and other late-life planning will also be vital.
It is not always easy to plan ahead for a divorce, as most Connecticut residents will agree that marriages do not often begin with an eye toward their end. However, once the decision to divorce has been reached, it is important for both parties to become educated about how their respective financial lives will change once the judgment has been entered. If both parties understand the applicable rights and responsibilities, it can lead to a smoother divorce process for both individuals.
Source: Forbes, "Divorce and Your Money Life", Michael F. Kay, Feb. 3, 2015