We all know that money makes our world possible and creates opportunities, but it can also create some sticky situations, especially in times of divorce, death, and other life-changing events. I’ve seen this recently firsthand and it really can become disgusting and really inappropriate at times. It can break relationships and cause unnecessary stress. What can happen and how can I prevent it? Let’s sprinkle some wisdom into this sensitive topic. Grab your favorite cuppa and let's dive into the nitty-gritty.
When Love Turns Sour: Divorce Drama
A romance that once bloomed like a rose garden now feels more like a thorny bush. The big "D" word - it can turn even the sweetest people into ferocious tigers. How do you deal with this and make sure you keep emotions clear so you can make the best decisions and keep the peace?
Open Lines of Communication: This should be true both during the marriage and while separating legally. Having open and honest conversations about money while married makes it so there are no nasty surprises during divorce. Everything is on the table and there will be less he said, she said.
Seek Professional Help: While some decide to get a divorce attorney or go through mediation, remember, your representation sets the tone. You want someone strong but someone who isn’t going to create chaos when you are trying to stay at peace. Also, make sure to talk to your financial advisor during this time. We can work with the attorneys to help separate the assets and discuss planning in the future with you each individually. Financial advisors are built to stay neutral, discreet, and confidant. Talking to your advisor openly can help create a fair deal for both parties.
The Prenup Paradox: No one wants to talk about a prenuptial agreement, however, it's like an insurance policy for your assets you have before marriage. If you are getting married later in life or if you are a business owner, you need to protect what you have built. We don’t want to have the talk with our soon to be spouse but if you can be open and kind, this can set a great tone in your marriage about talking about money actively and thoughtfully.
Saying Goodbye: Handling Money Matters After Death
Grieving the loss of a loved one is never easy, and the last thing you want to deal with is a financial disaster or angry relatives. With some wise planning, you can ease the burden for your family and friends.
Create a Will & maybe a Trust: Think of your will as a love letter to your family, telling them where you want your assets to go. The will can be challenged though if there isn’t a beneficiary attached to the asset, like your home. In this case, you can put a trust in place to direct the assets to the parties you want them to go to. Keep it updated as life evolves. Estate planning will leave a lasting legacy of love.
Life Insurance, can be the Guardian Angel: Having a life insurance policy can be a lifesaver for your loved ones. It provides financial support when they need it most. It often times is a much faster process than waiting for the trust to be distributed. It can be much less cumbersome than having your loved ones surf through all of your belongings to get the house on the market. It can give them space to grieve. Plus, it is a tax free event so your beneficiaries won’t have to worry about taxes in most cases. Make sure you keep an eye on your policies though because there can be some events that your policy can become taxable so watching your policy is a must. Don’t just set it and forget it.
Organize Your Finances: Leave no financial stone unturned. Keep a record of your accounts, passwords, and financial documents in a safe and accessible place. We’ve all seen that loved one with a Facebook account still opened years after they’ve passed. If you don’t want that, keep things available so your family can shut everything down properly. Your family will thank you later, trust me! Also, keep beneficiaries current and look at them least once a year.
Preventing Nastiness in Other Instances
It's not just divorce and death that can make money matters messy. Life is unpredictable, and having a financial safety net can save you from chaos in various situations.
Emergency Fund Magic: Building an emergency fund is like waving a magic wand over your financial security. Aim for at least three to six months' worth of living expenses in a savings account, and you'll can avoid a lot of life’s hiccups that can snowball into financial turmoil. You will never have to borrow from Uncle Tim again. Also, understand the liquidity and accessibility of every account you have. When you are in a pinch, you need to know where you can get cash fast and what the repercussions are.
Insurance Sorcery: Protect yourself with various types of insurance, from health and disability to home and car insurance. It's like putting a shield around your assets, ensuring they're safe from unexpected blows. Also, make sure you keep on top of them that they are covering your current life and not your life from 5 years ago.
Financial Plan Wizardry: Make your money work for you and you are putting the right things in place for you now and in the future by having an official plan. As always, keep them up to date. A financial professional can concoct a spellbinding plan with lots of scenarios and discussion.
Money is just a tool to build the life you desire. By planning ahead, you can breeze through life's challenging moments without letting money turn you or others into a cruel beast. Stay financially empowered!
We at One Vision Retirement are happy to have a no obligation call to go discuss your situation and questions.
Feel free to schedule a call today: https://calendly.com/onevisionretire/gettingtoknowyou
Have a question for us that you want answered in our newsletter? Email your question to firstname.lastname@example.org
Investment advice offered through Integrated Financial Partners, doing business as One Vision Retirement, a registered investment advisor. The information in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. Integrated Financial Partners does not provide legal/tax advice or services. Please consult a qualified legal/tax advisor regarding your specific situation.