By Kyle Louvar, CFP®, AIF®
Regardless of the reason for the separation, a divorce can be painful, emotional, overwhelming, and expensive. While there’s no avoiding the feelings that come with such a significant life event, a trusted financial advisor can help you navigate through it.
It can be difficult to keep track of all the things that need to be handled. Finances, childcare, and housing are often the most important, but you don’t want to forget about estate planning. If you fail to make certain updates or delay in setting up the proper safeguards, your situation could easily go from bad to worse.
For divorcing dual-income couples, make sure your financial future is protected by following these four estate planning steps:
Reevaluate Your Retirement Plans
Transitioning from a dual-income household to individuals with separate income streams can look a lot different. You may find that you need to adjust your spending or savings—and, perhaps, your retirement timeline to compensate for this change.
Keep in mind, if you have combined retirement savings, you may be ordered by the court to split your retirement assets through a Qualified Domestic Relations Order (QDRO). Regardless of the specifics, you’ll want to ensure that all of your retirement assets are properly separated and in each person’s name only.
Additionally, it is critical to review your retirement accounts and update the beneficiaries.
Review Your Estate Plans
Next, you’ll want to review and update your estate plan. This involves not only updating beneficiary designations but also updating your will, power of attorney, health care proxy, and life insurance policies. If you have children under the age of 18, extra consideration should be given to whom you’ll name as a guardian if it’s not your ex.
In general, any estate documents you had before the divorce will need to be redone to ensure you leave your assets to the correct heirs and are thoroughly protected in the event of incapacity.
Consider a Trust
A good way to make sure your financial future is protected is by establishing a trust. This is also helpful if you have young children because a trust can be tailored to your specific needs, such as stipulations regarding how old your child must be before he or she can access any funds.
Consider this: If you were to simply leave your money to a family member with directions in a will to take care of your children, there is no guarantee that will actually happen after you’re gone. While a will can’t restrict how the money is spent once it’s given to the beneficiary, a trust can.
Retitle Joint Assets
While married, you probably accumulated assets or retitled assets to joint ownership with your spouse. Now that divorce is on the table, you need to make sure that joint assets are retitled in each person’s name only. This can include:
- Checking and savings accounts
- Houses, vehicles, boats, etc.
- Investment accounts
- Retirement accounts
Some of these accounts require a divorce decree or QDRO before splitting the assets and retitling. No matter what your situation, this is a critical piece of estate planning that should not be overlooked.
Make Sure Your Financial Future Is Protected After Divorce
Divorce is never easy, but we at Guided Capital Wealth Management can help you keep your financial future protected. We utilize our proprietary process, The Paradigm FORMula, to help you create a dynamic plan that can maximize your financial potential and help keep you on track toward achieving your goals throughout your lifetime.
Kyle Louvar is the CEO and Wealth Management Advisor for Guided Capital Wealth Management, a fiduciary financial advisory firm offering fee-based advice, guidance, and education. After seeing the impact that the 2008 financial crisis had on families, Kyle became fully committed to helping his clients develop a financial plan that changes as their lives unfold and their needs evolve. Spending nine years working for one of the largest brokerage firms on Wall Street, Kyle holds a high value for process, expertise, objective advice, and customized solutions. His goal is to help his clients experience confidence in their financial future through a disciplined process of financial planning, investment management, and sound financial decision-making.
Kyle graduated from New Mexico State University, where he was a proud 4-year letterman in football for the Aggies and where he’s sat as an NMSU Foundation board member since 2015. Kyle holds the CERTIFIED FINANCIAL PLANNER™ and Accredited Investment Fiduciary® certifications. When not helping his clients, Kyle enjoys spending time with his wife, Nicole, and their two daughters. You can often find him coaching his daughters’ softball teams, playing golf, cooking, and traveling. To learn more about Kyle, connect with him on LinkedIn.