FINANCIALLY PREPARE FOR DIVORCE OR LOSS
We’ve all heard the sage advice to hope for the best but prepare for the worst. No one wants to focus on possibilities like divorce or the death of a partner. Still, knowing how to handle the financial logistics of such an event is important. Taking proactive steps can give you a sense of control during an otherwise chaotic time.
Here are some ways to prepare for the unexpected.
Discuss financial plans early on
Iron out details of your finances early on with your partner. Have a frank discussion about what they’ll look like should the relationship end prematurely. Both of you should take an active role in the conversation, and it’s wise to put things in writing, like a domestic partnership. This is especially true if one person is primarily responsible for the household’s money matters.
Susan Wood, Director of Wealth Strategies at CIBC Private Wealth, notes that finances are a common source of conflict between partners. What’s more, goals and objectives develop over time. “Everyone has a different relationship with money,” she explains. “Having open discussions early on gives you time to pivot. By keeping the conversation going throughout the partnership, you can also make adjustments to your financial plans if your circumstances change.”
Protect your assets
Although you share many things with your partner, in some cases it makes sense to have some separation. Maybe you recently received an inheritance or a large return on an investment you made prior to the relationship. In such cases, it’s a good idea to put a portion of those funds in a separate account in your name alone. Be sure to designate any intended heirs as beneficiaries, too; seek legal advice from a qualified family law practitioner.
Update your estate planning documents regularly
At least once a year, read over your will, power of attorney or trust to ensure everything is as you want it. If anything needs updating, don’t procrastinate—make the changes right away. Keep in mind that if you divorce and your former partner remains listed as a beneficiary, they may still be able to claim the benefits. As discussed, it’s a good idea to get appropriate legal advice.
Review life insurance and long-term care needs
If your partner passes first, is your insurance set up to prioritize your long-term care? Review your policy together to ensure you both understand what the financial situation would look like upon the other’s passing. You’ll also want to prepare for the possibility of being removed from your partner’s policy if you divorce.
Create an inventory of financial assets
It’s vital to take inventory of your combined financial assets. If you divorce, this documentation will ensure you receive everything you’re legally entitled to. A financial advisor is a useful resource here—they can help take any guesswork out of your plans. Dealing with the loss of a partner is difficult enough without added financial strain.
Get experienced advice
Jeanette Power and her team work with a diverse group of clients; ranging from affluent families and business owners, to female executives and divorcees across the country. Specifically, her tenure has given her the expertise needed in the financial issues of divorce settlement options. Providing an objective viewpoint, Jeanette uses an informed and diligent approach, examining long-term implications in a given scenario, to ensure an outstanding level of service.
The Power Investment Team is here to support all of life’s transitional moments—both happy and unexpected. For any questions about how to protect your wealth, reach out to our team any time: email@example.com