Divorce and Finances: How a Financial Advisor Might Help

Divorce can be a challenging time that might impact finances. Our team at StackStone Wealth can help provide clarity and guidance to help with financial decisions and the long-term impacts. Our advisors will look at your financial picture including cash flow and strategies for estate and tax planning, investments, and insurance.

Before the Divorce

Consider the following actions to implement before a divorce:

• Compile financial documents: Gather and organize bank statements and tax returns. Make sure all taxes have been paid to date.
• Protect your credit score: Keep your credit strong in case you need to facilitate potential future needs.
• Update your budget: Review and adjust your budget to account for changes in income and expenses.

View a more comprehensive list to protect yourself financially in a divorce here.

During the Divorce

If the divorce is moving forward, financial advisors can help provide support. They can offer insights to help create a plan for retirement accounts or other investments that may be divided during the divorce, including cash-flow and asset scenarios to map out potential future outcomes and explore which one may be the best solution.

After the Divorce

Divorce might be the beginning of a new financial journey. Our team can help provide ongoing guidance and support as you navigate your new normal. Financial advisors help clients establish new financial goals, create updated financial plans, and ensure all financial accounts and documents are correctly aligned with their new circumstances.

Other Considerations during Divorce

• Joint Bank and Investment Accounts: If you have joint bank or investment accounts, you will want to set up individual accounts and adjust automatic payments.
• Retirement Accounts: Financial advisors can help you understand how retirement assets will be divided. For instance, assets received from a 401(k) under a Qualified Domestic Relations Order (QDRO) are not subject to the 10% premature penalty tax but will be taxed as income unless rolled over into a qualified retirement account.
• Update Insurance Policies: Review and update health, disability, homeowners, and auto insurance policies.
• Wills and Beneficiaries: Update your will and life insurance beneficiaries.
• Housing: Financial advisors can help navigate decisions around renting or owning property post-divorce, weighing options like selling the home, refinancing, or adjusting living arrangements.
• Tax Considerations: Divorce impacts tax filings, and financial advisors help clients decide the best filing status and understand the tax implications of support payments and asset divisions.

For more information, about the information above, visit this resource.

If you’re going through a divorce or know someone who might benefit from financial guidance, consider reaching out to our team with offices in Rockford, IL, Dubuque, IA, Lake Geneva, WI, or Marquette, MI for a complimentary initial consultation.