Tips for Financial Security After Divorce

Tips for Financial Security After Divorce

By: M. Scott Gordon

While many people who decide to file for divorce in Chicago are thinking about financial implications, they may not realize the full extent to which a divorce can change their lives financially. Not only will you be responsible for all the bills that you currently share with your spouse (if for a family purpose), but the court will also be dividing up retirement accounts, savings accounts, stocks, and other assets that you have come to rely upon in the present and for the future. Although it may be difficult to feel financially secure after divorce, there are steps you can take to help give yourself at least some sense of financial security before you file for divorce and once it is completed.

A report from CBS News discusses the complicated nature of financial security and divorce, and it gives tips for anyone who is considering divorce or already has filed a petition for the dissolution of marriage.

Take a Long, Hard Look at Your Finances Before You File for Divorce

Before you even file for divorce, you should “take stock of your finances.” This means assessing your income, your separate assets, your expected income in the future or your earning potential, and your current budget. In addition, you should think carefully about what your budget will need to look like for expenses after your divorce is finalized.

As the report explains, although many experts suggest that both partners should understand household finances, many times it falls to one spouse to take care of those tasks.” In these circumstances, it can be extremely difficult for the spouse who has not been responsible for household finances to understand budget issues and how to manage financially.

Build Your Budget Based on Necessities

When you are planning for life after divorce and building your new budget, you should focus on necessities, including but not limited to:

  • Where you will live (you should keep in mind that it may be too expensive to stay in your family’s home, especially with taxes and the costs of upkeep);
  • Maximum cost you can pay to rent a new house or apartment; and
  • How much health insurance and healthcare will cost, and how you will obtain health insurance.

Consider Your Retirement Options

If you are nearing retirement or if you are already retired, you should know that divorce can significantly change retirement plans. In most cases, retirement benefits, including 401(k) accounts and other plans, will be subject to distribution under the Illinois Marriage and Dissolution of Marriage Act (IMDMA). You may need to go back to work if you have already retired, or you may need to consider working longer than you were initially planning before you ultimately decide to retire.

Seek Advice from a Chicago Divorce Attorney

If you are considering divorce, or if you have already begun the process of filing for divorce, an experienced Chicago divorce attorney can help with your questions about financial security. There are many different types of financial issues that arise in any given divorce, including property division, spousal maintenance, complex property valuations, child support, and other matters. An advocate at our firm can help. Contact Gordon & Perlut, LLC to speak with a divorce lawyer today.