7 Steps Women Must Do Post-Divorce
"I initially pursued this as a hobby, but I have since turned this into a business to provide for my children and myself.”
The women I collaborate with are truly inspiring. Following divorce, many of them have successfully turned their hobbies into profitable ventures. While this achievement is commendable, it also means they face increased demands managing a business, household, and finances. They seek my guidance to help organize their personal finances and wealth accumulation.
Seven steps to take post-divorce:
1. Review and Revise Financial Accounts: Start by compiling a list of your joint accounts from your marriage and take steps to replace or retitle them in your name. Before closing any joint accounts, it's wise to check your credit score, especially if your spouse managed all financial matters during the marriage. If needed, consider applying for a new credit card before closing joint accounts.
2. Update Beneficiary Designations: Ensure your retirement accounts and other assets have updated beneficiary designations to avoid potential complications. Contact your HR department or brokerage firm to request the necessary forms.
3. Evaluate Insurance Needs:
Life Insurance: Consider purchasing term life insurance if you have dependents relying on your income. Tailor the coverage duration to align with your children's needs, such as a 10-year term policy if they will require support for that duration.
Homeowners Insurance: Review and update your homeowners and auto insurance policies, paying close attention to the list of assets covered. If assets were allocated to your ex-spouse in the divorce, adjust your coverage accordingly. Additionally, consider obtaining an umbrella liability policy for added asset protection.
Disability Insurance: Given your newfound financial independence, safeguard your income against potential illness or injury with disability insurance. While it may require an investment, the peace of mind it offers is invaluable. Seek guidance from a knowledgeable advisor to find the right policy for your situation.
4. Build Emergency Savings: Aim to accumulate a safety net of at least six months' worth of living expenses in readily accessible accounts, such as a bank savings account or a money market fund with your brokerage firm.
5. Establish Your Financial Support Team: If your ex-spouse handled the financial relationships, it's time to assemble your own team. Consider hiring an independent financial advisor to serve as your guide, coordinating various aspects of your financial life. This professional can assist with budgeting, tax planning, retirement savings strategies, and investment management tailored to your post-divorce circumstances.
6. Update Social Security Information: Take the necessary steps to update your information with the Social Security Administration, including any name changes and social security benefits. It is important to know your benefit because if you were married for 10 years or more and you do not remarry, you may want to use your ex-spouses benefit when the time comes.
7. Review and Revise Your Estate Plan: Whether you have children or not, it's crucial to create or update your estate plan to reflect your current circumstances. This includes updating power of attorney documents for both healthcare and finances.
Overwhelmed?
Post divorce planning can feel overwhelming. After working with me, my clients feel more secure and hopeful about their future. Please reach out to me here if you're interested in learning more about post-divorce planning or know someone who could benefit from this guidance.
