Whether you’re the husband or wife getting divorced can be a traumatic experience. This is especially true if you’re not the one that wanted the divorce because you’re basically powerless. It wasn’t something you wanted but you really have no choice in the matter.
However, the brutal fact is that a divorce Is usually much harder on the woman. As an example of this, women who had been divorced at least once were 24% more likely to have heart attacks than women that stayed married. This is according to a Duke University study. And women who had been divorced more than once pushed their heart attack risk to 77%. In comparison, the risk for heart attacks to men increased only after two divorces.
Living in poverty
Even worse according to a 2009 US Census Bureau study within a year of being divorced more women than men were living in poverty and receiving public assistance. Studies have also shown that they earn less money and are less likely to be able to live independently. Finally, a divorce will not only damage a woman’s reputation but her retirement savings and credit standing as well. Given this, it’s vitally important for women to understand how they are likely to be affected by these issues and how they could prepare themselves as they transition into the next chapter of their lives.
It may not matter if you continued to work after marriage or were a stay-at-home mom. You may still be faced with new responsibilities for expenses that had been shared such as utilities, housing, childcare, food, insurance and healthcare. If you were in a marriage where your husband handled most the finances you may find that you have serious gaps in knowledge following the divorce. For example, whether you are in the workforce or stayed at home you may be unaware of what it really costs to live from month-to-month independently. You may not know your family’s total assets or you may have unrealistic expectations based on what you think you will receive in your divorce settlement.
Retirement accounts and divorce
It’s also possible that your retirement accounts were primarily in your husband’s name. This means that even if you get part of the money in a divorce settlement you’ll still need to save more money towards your retirement. If there were titles, loans and credit cards issued in your ex spouse’s name – as opposed to jointly – you may find your personal credit score is lower than that of your ex’s or at least lower than you had anticipated.
Get a Certified Financial Planner
In choosing a divorce attorney it’s important to get one who understands that you need to have a certified financial planner (CFP) on the team. A CFP can help you understand how the divorce will affect your personal finances, the assets at stake and the things you need to do to get back on a solid financial footing as fast as possible.
Key points to consider
Once your divorce has been finalized there are some key things to consider. One of the most important of these is estate planning. If you end up with sole custody of minor children or even if you share custody with your ex this is very important. At the very minimum you will need a will and a plan detailing who will care for your children and how they will be cared for in the event something happens to you.
Did you have health insurance through your ex’s employer? If this is the case you will need to get your own. It’s possible you will be able to continue your healthcare benefits through COBRA or if you have a job you may be able to choose employer-sponsored health care benefits. If neither of these will work for you there’s the government Healthcare Insurance Marketplace where you should be able to find coverage.
Disability and life insurance
Will you need both these types of insurance? If you have dependents that rely on you then both these types of insurance are something you need to seriously consider. The life insurance would provide for your children should you die prematurely and, of course, disability insurance would help if you became unable to earn an income. On the other hand, if you have no dependents then you might need only disability insurance. In any case, you may find that both are available as part of your employer’s benefit package. If not, you should start researching your options now and one of the best places to start is www.selectquote.com where you’ll find good information about term insurance. This type of insurance costs much less than whole life policies so you should be able to buy more insurance – like up to $250,000 in coverage – for less than $22 a month.
How will you file your taxes now? Will you file as single or as head of household? Will you be able to claim your children as dependents? Do you know how child support and spousal support are taxed? This is an area where it would be a good idea to get some professional tax advice even if you think your taxes won’t be that complicated. In fact, how you file could turn out to be the difference between getting a substantial refund and getting a very small one.
While it’s always important for you to take care of yourself – no matter your position in life – you need to be pretty selfish after your divorce. Your priority should be to secure your own financial well-being in the years ahead without worrying about what will happen to your ex.
Nobody likes to think what would happen in the case of a divorce but if it seems unavoidable you need to be prepared to take the steps required to ensure that when all the dust has settled you will have a good financial life going forward.