(Because QDROs are so complicated to prepare, most attorneys outsource that work to a QDRO specialist. Make sure that this does not fall through the cracks and that the QDRO is issued as close to the time of divorce as possible. Otherwise, under certain circumstances, all rights to that retirement money can be lost.)
Consider all types of insurance. Most women are aware that they will need to provide for their own health insurance after divorce. But, many neglect to consider other types of insurance, such as life, property/casualty, disability and long-term-care. Once you are single, these types of insurance become more important than ever, so be sure to include all of them in your divorce planning.
In addition, if you will be receiving child support and/or alimony, you will want a life insurance policy that protects you financially in the event something happens to your ex-husband. This is much easier to accomplish during divorce negotiations, rather than after a settlement is finalized. A divorce financial planner can help you understand all the options available to you.
Use a budget and adjust your lifestyle to help ensure long-term financial stability. Anyone who’s going through divorce needs to create –and stick to --a budget. A budget will help you maintain your lifestyle, pay off debt and increase your savings. In some cases, though, the divorce settlement agreement won’t provide enough income to pay monthly expenses, and as a result, some women will need to start immediately liquidating assets to maintain a certain lifestyle. Once again, a divorce financial planner can help you determine how long your assets will last and which adjustments are necessary for continued financial stability.
In fact, the first step for a divorce financial planner is to conduct a Lifestyle Analysis to determine what the monthly expenses were during the term of the marriage. Based upon this information and various divorce settlement proposals, a divorce financial planner can then determine how long those funds will last and how much alimony should be paid (and for how long) to close any gaps. If it turns out that you will run out of money after a relatively short time, either a better settlement offer needs to be negotiated, or-- if a better deal cannot be negotiated or if the money and assets are insufficient -- then you will need to discuss how to cut expenses, reduce lifestyle costs and perhaps get a job, among other things.
Revise your estate plan and change your beneficiary designations on all your accounts. Just as divorce calls for the careful examination of your budget and lifestyle expenses, it also underscores the need for careful estate planning – especially if you have children. As remarkable as it sounds, in some cases, when a woman has failed to plan and then dies, an ex-husband might gain control of her assets.
Plus, if you’re like most women I work with, you do not want your husband to inherit the funds from your accounts! This step is often inadvertently overlooked, much to the dismay of children and others close to you, so please, remember to change the beneficiary designations on all your accounts.
Divorce is difficult at any age, but women divorcing later in life face numerous complicated and unique challenges. Be sure to hire a divorce team that’s qualified to handle grey divorce and help you achieve a settlement ensuring your financial stability in both the short and long-term.
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