Warren: Make estate, financial planning first step after divorce

After a marriage breaks up, about the last thing most people want to do is sit down with one more lawyer.

But no matter how old you are or whether you have children, it is important to consult both financial and legal experts to make sure that you have an updated estate and financial plan for your new life once the divorce decree is final.

The weeks immediately after a divorce are a good time to revisit short- and long-term spending and planning goals.

Here's a general road map to that process:

Whether you plan to stay single, remarry or move in with a new partner, it's good to get a baseline look at your finances as early as possible after the divorce is final.

Expenses for the newly single can pile up quickly and unexpectedly, and a financial planning professional can help you review your new current spending and savings needs, compare strategies to achieve long-term goals like college and retirement, and give you critical tools to protect your assets and loved ones if you die suddenly.

Coordinate the activities of a financial planner with an estate planning lawyer who can tailor an overall estate plan to your needs. If you have children, such planning is important if you plan to remarry and if you want to guarantee that specific assets are guaranteed for them when you die.

In some cases where a spouse dies unmarried with minor children, an ex-spouse might automatically gain control of assets that were supposed to be earmarked for the kids.

If you don't want that to happen, you need to plan for that legally.

If your children are minors, make sure you and your ex-spouse have a guardianship plan for their upbringing as well as any assets they may inherit.

If one of your children is disabled and is expected to need lifetime assistance of some kind, then you should consult a qualified lawyer to help you create a special trust. It will help protect your child from having to give up any public or social financial assistance as well as access to special doctors, medical help, special prescriptions or treatments that could be taken away if they were to personally inherit assets that would disqualify them for these programs. When such assets are held in trust, they are not counted as the child's assets.The advantage is that those inherited assets may still be used to support their housing or other personal living needs.

Most people focus on what may happen to their health insurance if they get divorced, but insurance issues like life, property/casualty and disability insurance are sometimes put on the back burner. If you're newly single, you need the best health coverage you can afford for yourself and your kids, but life, property, liability and disability insurance becomes doubly important, particularly if you failed to address those needs during the divorce.

Even if you were advised correctly to change the names on assets you and your spouse were dividing between yourselves, it still makes sense post-divorce to review that the names are indeed correct on those assets and, most importantly, to make sure all beneficiary information is correct.

-

Rebecca Warren is a certified financial planner and certified senior adviser in Mesa. She can be reached at (480) 357-8380 or by e-mail at rebecca@warrenfinancialservices.com.