By Antonio Porretta
Few people get married thinking it will one day end in divorce. But with the divorce rate still remaining between 40% to 50%, it’s a common occurrence in life. (1) Divorce is a highly emotional transition, and one that comes with a multitude of financial complexities. If you’re facing a divorce, let’s discuss a few simple steps you can take to make a smooth transition into your next phase of life with less anxiety and more confidence.
Don’t Rush A Divorce
First and foremost, don’t rush the divorce process. There are so many difficult decisions to make: property division, child support, parental responsibilities. Each one of these decisions has a long-term impact on your emotional and financial well-being.
Take a deep breath, and take your time making each decision. I even tell my clients to remove their emotions from the equation and think of each decision as a business transaction. This may sound cold, but emotions are at an all-time high during divorce. It’s critical to calm these emotions and make decisions as rationally as you can.
Get Organized
Getting organized before a divorce can help minimize stress and reduce the chances of running into problems down the road.
Start by making a list of all your assets, liabilities, and financial accounts, including:
- Bank statements
- Insurance policies
- Investment accounts
- Estate planning documents
- Tax returns for the past few years
- Retirement account statements
- Loan documents
- Real estate deeds and car titles
You’ll need to give these items to your attorney. It may also be helpful to divide them up into marital property (i.e., assets and debts obtained during the marriage) and non-marital property (i.e., assets and debts obtained prior to or after marriage).
Know Your Cash Flow
Even if you anticipate having a large net worth after divorce, it’s important to know what your cash flow will look like moving forward.
You don’t necessarily need to budget and track every expense, but you do need a clear idea of how much money you’ll have coming in each month.
Write down your income, including your salary, alimony, child support, dividend income, and so on. Then write down all of your expenses. (Don’t forget one-off expenses like property taxes and private school tuition that may not show up on your monthly bank statements.)
Seeing these numbers in writing will help you get comfortable with your new cash flow and help you prepare for any unexpected expenses.
Plan Ahead for Post-Divorce Life
Life drastically changes after divorce. Instead of dividing financial tasks between the both of you, you become solely responsible. Now is a good time to start:
- Making a legal name change
- Updating all assets, documents, and liabilities
- Changing beneficiaries and emergency contact information
- Setting up a filing system to keep tax records, investment documents, insurance policies, and legal information organized.
Be Gentle With Yourself
No matter how amicable you try to make it, divorce is messy. It’s emotionally, physically, and financially draining.
Go easy on yourself. You may be in a fog right now—and that fog may last for quite some time. Seek therapy or counseling if you need to. Do whatever it takes to protect your mental and physical health.
Lean On Your Advisor
Everyone needs a support system when traversing life’s ups and downs. As one of life’s biggest challenges, divorce is a time when you need that support more than ever. It’s also wise to speak with a professional who can offer informed and objective advice. That’s where your financial advisor comes in. Throughout the divorce process, lean on your advisor. Ask for advice, voice your fears and concerns, and let them know when you’re confused.
If you don’t already have a financial advisor as a member of your support system, we at Blackbridge Financial would be honored to join your team. I specialize in helping my clients navigate divorce-related issues, so I can help you move forward with peace, clarity, and even confidence. If you’d like to partner with a financial planner who understands your unique needs and helps you feel secure in your financial decisions, email me at antonio.porretta@lpl.com or call 704.960.9646.​
About Antonio
Antonio Porretta is an independent wealth manager at Blackbridge Financial with over 20 years of experience. He specializes in helping people create, distribute, and preserve their wealth. Antonio received an executive MBA from Saunders College of Business at Rochester Institute of Technology in 2007 and also holds the Accredited Asset Management Specialist (AAMS®) designation. Originally from Rochester, NY, Antonio has been a resident of Harrisburg, NC, since 2007. Outside of work, he enjoys playing soccer and tennis, coaching, and spending time with his wife, Laura, and their children, Cristiano, Victoria, and Matteo. To learn more about Antonio and how he can make a difference in your financial life, visit www.blackbridgefinancial.com.
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Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance, a registered investment advisor. Independent Advisor Alliance and Blackbridge Financial are separate entities from LPL Financial. LPL Financial and Blackbridge Financial do not offer legal advice or services.
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