Understanding your Financial Situation is Critical in Case of Divorce (Pt 2)

A woman sitting at a computer with a calculator, trying to add up figures.
Understanding your family’s financial situation is important – especially if your marriage ends and you suddenly need to know what’s up with your money!

Hey there, welcome back to this discussion about family finances, and why it’s so important for both spouses to be aware of what’s going on with the money side of things. As we mentioned in the previous article, it’s really important that both spouses have a handle on the family’s money situation. Again, this isn’t because one of you can’t handle it alone, but because both of you need to be aware of what you’re worth as a couple, and what you have – both in assets and in debts. Because life is crazy, and you never know what’s going to happen down the road. So the more prepared you are for all eventualities, the better.

If you recall from last time, we recommended that you and your spouse create a list of all of your assets, including all of your accounts and the information needed to access them (like names and passwords). You also need to include all of your physical assets, like homes, cars, and any other items of worth you own. But that isn’t the end of it…

What else needs to go on your finances list?

Another thing you need to include is your insurance policies. Include all relevant info, like where the policy is held, and whether or not the premium has been paid. (You should also note who the beneficiaries are!) Forgetting to update your life insurance policy is a mistake that many newlyweds make, so this may give you a chance to correct that before it’s too late. Finances may not be exciting, but they’re super important!

Not updating the beneficiary on your life insurance policy after marriage could have devastating results in the event of an untimely or unexpected death. And the same goes for a divorce. All of the beneficiary and address information should be updated on a life insurance policy after you get divorced. Nothing would be more frustrating to your new spouse if your life insurance policy paid out after your death – to the wrong spouse!

What do you do with the list after you’ve made it?

Once you’ve made your list you should make a few copies and store them in secure places. If you have a home safe, one should go in there. If you have a safety deposit box at a bank or post office, another copy should go in there. Make sure each of you gets a copy and stores them separately. That way they won’t get lost or misplaced over time. 

We know this is a tough subject to bring up, but by opening the dialogue about your family’s financial assets, you pave the way for all those important topics that people should talk about, but don’t. Things like how each partner may want their assets managed in the event of death, or how certain assets should be divided in the case of divorce. 

Make sure your assets are protected during a divorce.

A divorce that comes out of left field, or the unexpected death of a partner can leave people feeling like the rug was pulled out from under their feet. Having a plan in place for your financial future can greatly reduce your stress during difficult times. Also, any decisions made when you’re calm and able to think through your options will stand you in far better stead than choices made in an emotionally charged situation.

If, however, you’re in a situation where you’re getting divorced and you need help sorting out your family’s finances, we’re here for you. The skilled and compassionate family law attorneys at the Kronzek Firm have decades of experience helping divorcing couples to sort out their assets for fair distribution. We can help you too.