Top 10 Things to Know Before Starting Divorce: Key Takeaways from Our Webinar

Top 10 Things to Know Before Starting Divorce

1. Shift Your Mindset Toward Equity vs. Disparities: One of the first steps to take is shifting your mindset away from emotional fairness and toward equitable outcomes. While it’s easy to focus on perceived disparities, the goal is to achieve financial equity that allows both parties to move forward independently.
2. Be Your Own Advocate (and Your Family's): During a divorce, it’s essential to advocate for yourself and your family’s future. Clearly identify what matters most to you—whether it’s financial security, your children’s well-being, or maintaining certain assets—and stand firm on your priorities during negotiations.
3. You Are Not Alone—Build Your Team: Divorce can be isolating, but you don’t have to go through it alone. Build a team that supports you emotionally and professionally, and fits your unique circumstances. This team could include people like a financial advisor or mental health professional.
4. Get Comfortable Knowing Your Finances—Prepare! Understanding your financial situation is critical during a divorce. Prepare by gathering financial documents like bank statements, loan balances, and tax returns. The more familiar you are with your finances, the better you’ll be able to advocate for yourself.
5. Play the Name Game—Know What Your Name is Tied To: It's important to know which assets and liabilities are in your name, your spouse’s name, or shared. From credit cards to mortgage loans, understanding who is legally responsible will help you plan effectively.
6. Know Your Burn Rate: Understanding how much money you need each month (your "burn rate") helps you make informed financial decisions. Somerset Advisory offers a Wealth Edit Guidebook to help you plan for your financial needs during and after divorce.
7. Home is Where the Heart Is—Decide from a Financial Lens: Deciding what to do with the family home can be tough. Approach the decision with a financial mindset—consider whether keeping the home is sustainable, or if selling or co-owning temporarily makes more sense.
8. Get a Business Valuation: If you or your spouse owns a business, getting a professional valuation ensures a fair division of assets. Services are available to help you determine an accurate valuation.
9. Review & Understand Your Estate Planning Documents: Update your estate planning documents, including wills and trusts, to reflect your new circumstances. This ensures that your wishes are legally protected after divorce.
10. Create a Financial Game Plan for Your Divorce: Establish a financial plan that addresses both immediate needs and long-term goals, such as retirement savings, education funds, and the cost of divorce itself. Having a clear financial strategy will make decision-making throughout the process easier.