Divorce. The word can conjure up thoughts of stress and sadness and financial concerns. And although all of this may be true, there are things you can do to ensure you’re in a decent financial position after the event.
Used by the court system, the term financial settlement refers to the financial proceedings that have to take place during a divorce. A divorce financial settlement can help you and your ex figure out where you stand financially, helping you to prepare for the future.
If your relationship is cordial
This makes the whole situation more straightforward. Instead of leaving the arrangements up to your lawyers, it can be far easier to sit down with your former partner and have a calm and measured discussion about both your financial situations.
You can talk about what you both require, whether any alimony or spousal support is needed by either of you and how you foresee supporting yourselves and your kids. Even though you might be going through an amicable divorce, when it comes to money, things can get tense. So it’s important to keep a level head and try to stay reasonable. Don’t let your emotions get away from you.
When you’re not getting along
The role of a mediator can offer a lifeline if you and your ex are finding it a challenge to get along. You could spend a few sessions with a mediator, working out how you intend to move forward. If you decide to go down this route, there are a few documents you should prepare in advance.
If you own the house you and your partner lived in, make sure you get your former matrimonial home valued and you know how much is left to pay off the mortgage. Get your paycheques and any income accounts ready too. You should have copies of your bank statements – joint and individual. Any info on debts, investments, and savings is useful too.
Are kids involved?
When kids are involved in a divorce, the situation gets more complicated. Although their needs are covered separately in a child support agreement, a fair financial settlement will have to take them into account.
For example, if a woman was married to her husband for 20 years, giving up her job to bring the kids up, this deserves recognition in a fair financial settlement. However, a fair agreement for a couple who were married for just three years and had no children could see them walk away with the assets they took into their marriage and no further commitment to each other.
Splitting the assets
If you and your ex have built up a lot of assets during your marriage, splitting them may be complicated. It may be easiest to start at a 50/50 split and then go from there – deciding which of you have put more in and therefore should get more out.
You might end up in a weaker financial state after a divorce. This is often the inevitable result of splitting a shared life into two. You may find that you have to move into a smaller apartment or get a cheaper car.
That’s why it’s important to try to see your divorce as a new beginning – something to build on. It can be an opportunity to learn about yourself and figure out what you really want out of life.
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