Divorce and Starting Over Financially

A Financial Literacy Presentation by

Member Name, CPA

Should You Hire an Attorney?

Legally, you don’t have to hire an attorney when divorcing

Most couples do to protect their interests

Attorney Fees

Hourly rates and up-front retainers

Fees depend on complexity of case, attorney experience and reputation, geography

Attorney Alternatives

Uncontested divorce saves times and money

Divorce mediation – neutral third party If mediation breaks down,

mediator can’t be called as witness for or against either spouse

Determine How to Divide Assets

Community property states like Texas split property accumulated during a marriage equally

Freeze joint accounts – both signatures required for withdrawals

Split balances in joint accountsAdvise stockbroker to require

written approval of both parties for transactions

Avoid Common Tax Traps

Tax differences for alimony versus child support payments

Review tax returns filed jointly or separately by spouseMake sure all taxes paid to

dateInnocent spouse relief

Consult your CPA

Protect Your Credit

Notify credit card issuer in writing of divorce

Freeze accountsApply for credit card in

your name alone, if you don’t already have one

Keep tabs on credit

Pay Your Debts

Make sure the divorce settlement states who’s responsible for paying off debts

Generally, you’re responsible for any debt incurred during marriage

Budgeting: Two Incomes to One

Determine your income from all sources

List all expensesCut back flexible expenses if

needed Increase income with part-

time job, selling property

Review Your Insurance

Be sure ex-spouse is carrying your children’s life insuranceCan require proof of

coverage from companyChange beneficiary on your

life insurance policies and retirement accounts

Revise your will

Save for Retirement

Women more likely to carry credit card debt than men

75 percent of all elderly living in poverty are women

• Social Security Administration

Half of all working women have low-paying jobs with no retirement plan

• According to Women’s Institute for a Secure Retirement

Start an Emergency Fund

Prepare for future financial setbacks

Save to cover living expenses for six months to a year

Get Good Financial Advice

Nonprofit credit counseling services to create repayment plan

CPAs to provide overall financial advice

Dos and Don’ts

Do review the contents of safe-deposit boxes

Do seek emotional support from friends, church group, therapist, etc.

Don’t make large purchases or create additional debt

Don’t quit your job Don’t move out of the house before

consulting an attorney Don’t transfer or give away jointly-owned

assets Don’t sign a blank financial statement

without reviewing it with your attorney

Any Questions?