After all the time you spent wrestling the idea of ending your marriage, and all the sleepless nights you suffered, you’ve finally made up your mind. But deciding to divorce is only the beginning of the process. You’ve got your, and if you have kids, your children’s futures to think about, and that means making smart financial decisions during the most difficult time of your life.
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It’s been said many times that marriage is about love, and divorce is all about finances. Still, too many women say, “I don’t want anything,” particularly when they’re the ones who choose to leave. But set your emotions aside for a moment and think of yourself (and your children, if you have them). Did you sacrifice your career to build a family, or put college or your career on hold to move from city to city for your husband’s career advancement? As fed up as you may be with sacrificing your needs for a marriage that simply isn’t working anymore, it’s important that you think deeply before making any financial decisions.
When it comes to the financial side of divorce, there are many important concerns to keep in mind. For starters—and this one is important—don’t keep your house just because it’s filled with family memories. As comforting as those memories may be, they won’t help you pay for a roof that needs repair or an air conditioning unit that no longer works. While it’s natural for you to place sentimental value on your house, it’s essential for you to consider the economic implications of staying put or selling. Selling the house while still married will help you avoid paying additional capital gains. Remember, the exemption for married people is $500,000, so if your house is worth that amount, you won’t have to pay any taxes on it if you sell while you’re still married. However, if you wait until divorce, the exception will be assessed for you only, as a single individual ($250,000), so you’ll be left paying capital gains on $250,000 instead. That’s quite a costly mistake. For some women, selling the house before the divorce is final and then downsizing is the key for funding retirement or paying for the children’s college tuition.
In the emotionally exhausting process of divorce, many women fail to consider the many financial consequences of dissolving their marriage. Things like health insurance and life insurance become important, often stress-inducing issues. For example, if your husband has a life insurance policy, chances are you probably won’t be the beneficiary for much longer. If you’re in your 40’s and have been out of the job arena for decades, this could have very significant implications for your financial wellbeing in the future.
Transitioning to your new life as a single person will likely be challenging, especially if you were never involved in your household finances. Surround yourself with a team of competent professionals—including a Family Law Attorney, a mental health professional, and a Certified Divorce Financial Analyst—from the beginning. They can walk you through the process, offer you much-needed support, and help you avoid financial pitfalls. Once the divorce is final, it will be time to reorganize your new life, being careful of all your expenses and debts. The more financial assurance you can have post-divorce, the more comfortably you can relax into your new life. By taking the time to thoughtfully consider the practical aspects of your divorce, you’re increasing the likelihood that the post-divorce future you’ve been fantasizing about will be as bright as you envision it.
Last, but certainly not least, make sure to save for rainy days, your children’s college tuition, and your own retirement. After all, you have only one life to live. The best way to empower yourself through divorce is by learning everything you can about the process; taking stock of your household assets; and prioritizing your physical, mental, and emotional health. It may seem like a tall order, but it’s possible. Women just like you do it successfully all the time.
Denise Fournier is a Ph.D. Candidate in Family Therapy and a Registered Mental Health Counselor Intern with the state of Florida. Currently, Denise provides therapy services to individuals, couples, and families at Isaac Farin Therapy, LLC, a private therapy practice in North Miami Beach, FL.
Vielka Burey-Jacas is a “Certified Financial Planner” (CFP) and a Certified Divorce Financial Analyst, as a CDFA™. She is trained to provide financial information and assistance to people in divorce to include evaluating the tax implications of dividing property and the settlement options for dividing pensions, marital property, and awarding of child and spousal support.