Retirement Planning

Starting the Planning Process Over Again: Marriage and Divorce

The marriage and divorce statistics make money issues between partners more complicated today than they have ever been before. Looking back in time, it used to be that most assets were jointly owned, there was often only one income for the family, divorce was rare, and estate planning by spouses generally consisted of simple wills that left everything outright to one another. Financial planning in that environment, in many ways, was pretty straightforward.

Today, a lot of that has changed. Young people are waiting longer to get married, often bringing their own income, assets and debts into the relationship. How should they be handled? Who takes care of what, pays for what? Divorce now often forces difficult decisions on the division of property. What’s gained? What’s lost? And second marriages then present similar questions around the handling of incomes, assets and debts moving forward as things are potentially combined again.

Whether you’ve just gotten married or plan to tie the knot soon, or whether you’re moving into a challenging time where you’re forced to manage the finances on your own again, here’s a good list of financial topics to start considering. The answers to these questions aren’t always easy to find, but I feel are the right questions to be focused on.

  1. Create new plan – It’s not always easy to do, but start by thinking about the big picture. What are the key goals and objectives you now need to focus on? How have they changed with your new situation? What are your new timelines? And what needs to be prioritized?
  2. Don’t forget the small stuff –Big picture is important to stay focused on the main things that matter most. But you have to try to get the day to day details right too. How are your most basic expenses going to be modified or can they be eliminated? Does your new situation present an opportunity to alter or increase savings? Focus on your workplace benefits too, to make sure they fit your new situation.
  3. Turn experiences into learning opportunities – Ask yourself what have you learned from your most recent experiences with money and shared financial responsibilities? If you could go back and change something you did or didn’t do – what would that be? Now’s your chance to change your behavior moving forward.
  4. What does the estate plan look like – This is probably the most easily forgotten component of the financial plan once a major relationship change occurs. It may be as simple as adding a new spouse as a beneficiary on financial accounts or removing an old spouse. But blended families and second marriages sure can complicate who gets what, and when. If so, chat with an estate attorney to make sure you get your wishes documented correctly.
  5. Surround yourself with a team – What kind of support do you need? Are there things you can outsource to professionals to help you manage things more effectively? What’s delegated and to whom?

Change can be good. And change can be bad. Either way, major changes in your relationships are an appropriate time to start looking at the planning process all over again to ensure you’re using your financial resources appropriately, and aligning your values and vision with your wealth.

 

Tracking #1-792081

Securities offered through LPL Financial, Member FINRA and SIPC. Investment advice offered through U.S. Financial Advisors, a registered investment advisor. U.S. Financial Advisors and Haas Financial Group are separate entities from LPL Financial.

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