7 Mistakes to Avoid After a High Stakes Divorce

Updated: Nov 11, 2020

Avoid these at all costs.


LARGE EXPENSES FOR DIVORCED WEALTHY FEMALES


Keeping the home when you should not take that money to afford it. Sure she can afford the mansion and the staff, but should you want to? Think about it. The amount of bills to have to keep track of. Letting the people in and out. Keeping track of which helper takes care of which kid and on what days. Having to pay to store the boat. What large expenses do you want now that you are divorced? Make sure to have the list of what is important to you and know if you can afford it.


DIVORCED WOMEN NEED A BUDGET


Not tracking your spending and thinking it will just be okay if you do not think about it. The credit card will eventually stop working. You have to track the spending, whether that sounds fun or not. You can always hire someone to help you.


FEMALES NEED TO PLAN POST DIVORCE


Not having a long term plan financially. This is one that does not need to be taken care of right away post divorce, but within 1 year. You need to come up with a plan that gives you a timeline of where you are and where you want to be. You may not know where you want to be, so having the conversation and mapping it out and understanding where you CAN be in the next 20 years is helpful. You can always change the plan, but having the guided path helps. You may realize that the 5 years of alimony is not the rest of your life. What are you going to do after that? Questions may come up that are best suited to discuss with your financial planner or therapist.


BENEFICIARIES NEED UPDATING FOR ALL WOMEN


Not updating your will, beneficiaries on bank and insurance policies. This is a mistake I see over and over again. You maybe had a Trust or a Will drawn up years ago. You may have unknowingly signed off on a life insurance agreement when the first child was born. Whatever the case may be, you need to redo it all! Not only make sure that the ex is off as beneficiary on any account you got in the settlement, but also make sure the life insurance is updated. That is another conversation in and of itself as you want to make sure you are the owner and you are making the payments. This will protect you in case he stopped making payments and the policy lapsed. Not taking his name off your accounts or name off mortgage.


CREDIT ISSUES FOR DIVORCED FEMALES


Not building or starting to build your own credit. Post divorce it is time to understand what a credit card does for you and how making payments on time for bills helps your credit. There are three bureaus that are reported to; EquiFax, Experian and TransUnion. Right out of the gate, you want to start to build your credit so you can buy the car, the house, the apartment, etc.


KNOWLEDGE AND PENALTIES FOR DIVORCED FEMALES TO LOOK OUT FOR


Taking money from the wrong places; such as the retirement account or personal loan from the bank or getting a cash advance off your credit card. This is a mistake that is often ignorant at first. You just did not know that taking the money from the retirement would come around and bite you back via the IRS penalty. It does not seem fair, that is your deserved money! But you have to follow the rules and not waste your money by giving it away in taxes and penalties to the government. Make sure to take money from tax free accounts first; money market accounts, checking and savings.


DIVORCE FEMALES ARE NOT ALONE


Money matters are hard enough for anyone out there. Why would you do it alone? Reach out to someone that is a CFP or CDFA. Divorce coaches are also a great resource as well as therapists that specialize in divorce.





Written by Olivia Summerhill, CFP®, CDFA® of Summerhill Wealth Management. She is a Divorce Financial Planner helping high net worth women maintain their lifestyle and build wealth during and post divorce.


Schedule a conversation with her and see what she can do for you by clicking here.



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