Financial Planning Around a Divorce

Sep 5, 2013 4:41:24 PM / by Jason Shaw

divorce financial planning

Divorce marks a major change in your life.  This is especially true as it applies to your finances.  As you make this tremendous shift, well-thought-out financial planning is crucial.  Make sure you pay attention to these key areas so you can be as in control of your independent financial life as possible.

Get copies of all financial documents as soon as possible

Make sure you have access to bank, credit, mortgage, and other financial statements as well as complete copies of your tax returns. This may become more difficult, both practically and emotionally, as time goes on.

Take control of your credit

Obtain copies of your current credit reports and clear up any errors.  Continue to monitor your credit for unauthorized charges in your name.  If you and your spouse still hold joint credit, watch your statements carefully to ensure that your soon-to-be ex is not saddling you with debt unfairly.  If you have not established independent credit over the course of your marriage, start now by opening a credit account in your name.  If you have not been the primary earner in your marriage, this will be easier for you to do sooner than later, since spouses may apply for credit based on family income to which they have access.

Open independent bank accounts

Especially if you have held all of your accounts jointly with your spouse, you will need to set up your own as soon as possible.  Bear in mind, however, that closing joint accounts can negatively impact your ability to apply for credit based on family income, so do this after you obtain your own independent credit accounts.  Choose a bank or credit union that is different than the one in which you have joint accounts, and open at least a checking and savings account in your name alone.

Make sure your tax returns are accurate and that you take full advantage of all deductions available to you

If you have been filing a joint return and have not been fully involved in the process, start familiarizing yourself with your returns immediately.  Have a qualified tax professional look over your returns to ensure that they are done correctly and to your best financial advantage.  Even if your spouse has been fully responsible for filing your return, the IRS will most likely hold you liable for any discrepancies or inaccuracies.  In certain cases, you may file for “innocent spouse relief” (find details at, but the IRS rarely grants these exceptions, and they are only available in certain specific circumstances.

Make any necessary changes or additions to your insurance policies

You will want to do a full inventory of the insurance policies you currently carry.  Do you have all the coverage you will need?  Who is listed as insured on your policies?  Do you need to make changes to your designated beneficiaries?  What are your deductibles, limits, and premiums?  Consult with an insurance professional to ensure that policies are designated according to your wishes and that you are minimizing both your risk and the cost of coverage.

Account for child support (or lack of it)

Consult a qualified family law attorney for a full understanding of Iowa’s child support guidelines.  Generally speaking, however, if you and your spouse have children together, one of you is likely to owe the other child support.  If you have been the primary earner in the family, particularly if your spouse stayed home to raise the kids, you can expect this obligation to be a sizeable chunk of your income.  If, on the other hand, you have been the one at home with the kids, you should speak with an attorney to get a realistic picture of the amount of child support you can expect.  Although child support is legally enforceable, bear in mind that the amount ordered can be altered in cases where circumstances significantly change.  Do not assume that the amount you receive at the beginning of your divorce will remain stable until your children reach adulthood.  It is safest to do all you can to secure independent sources of income to cover your expected costs.

If you are anticipating or are in the process of divorce, don’t try to do it all alone. Find a qualified attorney to answer your legal questions (The Iowa State Bar Association provides listings by area of practice on their website), and consult with a qualified financial planner.

As you make this major life shift, the trusted, professional staff in our Des Moines office can provide valuable help with all of your financial planning needs. Check us out at or give us a call at 515-225-1185

Tax and accounting services provided through Boelman Shaw & Company, LLC. Advisory services provided through BSC Capital Partners, LLC a state of Iowa registered investment advisor.

Topics: Financial Planning

Written by Jason Shaw