Divorce Financial Planning Tips

If you are contemplating or in the midst of a divorce, don’t forget a critical component of your foundation moving forward – your personal financial plan.

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Divorce isn't easy - but being prepared can help

Divorce is difficult for everyone involved – spouses who are splitting, children caught between parents and extended family members who have established loving relationships.

Although it’s impossible to take the emotion out of a divorce, a sound financial plan can provide some peace of mind. Our compassionate team of advisors will help you navigate the financial challenges that often come with divorce.

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Life after Divorce

Now is the time to move forward and focus on making your financial future as comfortable and error-free as possible.

Establish or adjust your financial and/or estate plan, pending your final divorce settlement.
Close all joint banking, financial and credit card accounts and open new ones in your name.
Review and update beneficiaries on all of your investment, insurance and estate documents to match the provisions in your divorce agreement.

Gather your financial information

Collectively and individually gather all current financial records detailing what you and your spouse own along with a list of expenses and financial obligations.

Revise or create your budget

Include mortgage, lines of credit, credit cards and any tax liabilities. Your list of expenses and cash needs should cover items such as food, monthly mortgage, utilities, insurance premiums, tuition, clothes, repairs, gas, entertainment and attorney fees.

List your assets

Include all of your assets and their value, even those that are owned jointly. Items should include your primary home, a secondary or vacation home and everything else you own. You also will need to provide records on bank accounts, cash, safety deposit boxes, retirement, pension and investment accounts, and anything else of value.

Gather tax and legal documents

You'll need five years of income tax returns and all payroll statements and pay stubs. In addition, gather legal documents such as wills, financial powers of attorney, healthcare powers of attorney, living wills and trusts.

Avoid common financial mistakes

Your family's financial future is important. Remember these tips as you make decisions that will impact you and your family.

Money should not be a weapon

It’s tempting to leverage your financial power, but decisions on dividing assets, child custody and rights to the house should be based on what is best for you, your spouse and any children or other dependents.

Tracking your expenses

Identify how much money you will need to maintain your lifestyle after your divorce. This includes insurance and discretionary spending for entertainment or vacations as well as regular costs of food, housing, medical, utilities and clothing.

Watch out for retirement account rules

There are penalty and tax rules for retirement accounts if you receive a portion as part of a Qualified Domestic Relations Order (QDRO). A QDRO recognizes spousal ownership in these accounts and generally awards a portion of the plan participant’s benefit to a divorcing spouse.

Should you keep your home?

It’s common for one spouse to keep the couple’s primary home, with the other receiving cash, retirement accounts or other assets of equal value. Although such divisions of assets can appear to be equal, there can be hidden drawbacks. You could end up with a home that is difficult to value or sell.

Don't forget about shared debt

You can be held responsible for joint loans, credit cards and other debt after a divorce, even if your spouse is responsible under the terms of your divorce agreement. We can help you determine whether it’s wise to pay off all shared debt before finalizing your divorce to avoid any questions or unexpected payments.

We can help you get there

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Checking Your Way

Whether you prefer online and mobile banking, unlimited debit card transactions or the opportunity to earn interest on your checking account balances, we have you covered. Access fee-free ATMs, chip debit cards, Cardless Cash, Mobile Deposit and Overdraft Services.

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Savings & Money Market

Be prepared for life’s little surprises with a savings or money market account. Whether you're just starting to save, building an emergency fund or saving for something special, we can help you reach your goals.

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Purpose of Financial Planning

The purpose of a financial plan is to define how your income and assets can provide for a lifetime of happiness. Healthy savings habits, spending discipline and appropriate investments are necessary to meet your goals. But, you need more than just a plan.

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Lazar Radicevic, Assistant Branch Manager, Racine, WI

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No matter what financial needs you may have, we're here for you. Our experienced advisors work closely with you to build the right path to help you achieve your goals.

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