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A Guide to Financial Planning for Divorcees

  • Parkview Partners Capital Management
  • Sep 5
  • 4 min read

Updated: Sep 30

Going through a divorce is one of life’s most challenging transitions, and finances are often at the center of the upheaval. Gaining control of your money after divorce is not just a necessity — it is the foundation for building an independent financial future.


This guide outlines key financial planning steps for divorcees, offering practical strategies to help establish stability and long-term security.


Important Note: This content is for informational purposes only and does not constitute financial, tax, or legal advice. Always consult with qualified professionals before making decisions.


Building Your New Financial Foundation


The period immediately following a divorce can feel uncertain, but it also offers the chance to reset and take charge. The first step is to get organized by gathering essential documents:


  • Divorce decree (settlement terms)

  • Bank and investment account statements

  • Property deeds

  • Loan agreements


Compiling this paperwork provides a clear view of assets (what you own) and liabilities (what you owe).


Creating a Post-Divorce Budget


Adjusting to a single-income household can be difficult. Creating a post-divorce budget helps align your spending with your new reality and future goals.


Steps to start:


  • List all income sources (salary, alimony, child support, etc.).

  • Track fixed expenses (housing, insurance, utilities).

  • Monitor variable costs (groceries, entertainment, subscriptions).


Key takeaway: A detailed budget replaces guesswork with facts, giving you a roadmap for saving, investing, and planning ahead.




Navigating Asset Division and Debt


Dividing marital property and debt is a critical part of the process. State law governs this through either community property (50/50 split) or equitable distribution (a fair but not always equal division).


Common assets to address:


  • Family home: Decide whether to keep, buy out, or sell and split proceeds.

  • Retirement accounts: May require a Qualified Domestic Relations Order (QDRO) to divide without tax penalties.

  • Investments: Consider cost basis and potential tax liabilities.

  • Joint debts: Credit cards, loans, or mortgages remain a shared responsibility until refinanced or closed.


A clear settlement, supported by legal and financial professionals, can protect long-term financial well-being.


Common Marital Assets and Key Division Considerations

Asset Type

Key Considerations for Division

Family Home

Appraisal value, remaining mortgage, buyout costs vs. selling costs, emotional attachment, and ability to maintain the property on a single income.

Retirement Accounts

A Qualified Domestic Relations Order (QDRO) is often needed to divide 401(k)s and pensions without tax penalties. Consider the long-term growth potential.

Bank Accounts

The date of separation is critical. Funds earned or deposited after this date may be considered separate property.

Investments

Tax basis is a major factor. A $100k account with a $20k basis has a much larger embedded tax liability than one with a $90k basis.

Vehicles

Current market value minus any outstanding loan balance determines the equity to be divided.

Joint Debts

Credit scores are at risk. Create a clear plan for payments and work to close or refinance joint accounts.

Resetting Retirement and Investments


Your retirement plan as a couple may no longer fit your individual goals. Handling transfers correctly is essential:


  • 401(k)s and pensions: Require a QDRO.

  • IRAs: May be divided using a “transfer incident to divorce.”


Once accounts are in your name, review your investment strategy:


  • Nearing retirement? Focus on preservation and income.

  • Younger with time to rebuild? A growth-oriented portfolio may be appropriate.


Align investments with your personal timeline, income, and risk tolerance, not with a past shared plan.


Updating Estate Plans and Insurance


A divorce decree does not automatically update your legal and financial documents. Immediately review and update:


  • Beneficiaries (life insurance, retirement accounts, investment accounts).

  • Estate documents (wills, powers of attorney, healthcare directives).

  • Insurance coverage (health, life, disability).


Revising these ensures your assets go where you intend and that your protection matches your new circumstances.


Assembling Your Professional Support Team


Financial planning after divorce is complex. Building a team of trusted professionals can make the transition smoother:


  • Financial advisor: Models cash flow, settlement outcomes, and investment strategies.

  • Divorce attorney: Negotiates settlement terms and ensures legal compliance.

  • Tax professional (CPA): Identifies tax implications of settlements, asset sales, and account divisions.


Collaboration among these experts can help ensure your settlement is both legally sound and financially sustainable.


Common Post-Divorce Money Questions


How soon should I start financial planning after divorce?


Ideally during the divorce process, but if not, begin immediately afterward. Start with a budget, update paperwork, and meet with a financial advisor within 3–6 months.


How can I protect my credit score during divorce?


  • Pull credit reports from all three bureaus.

  • Close or refinance joint accounts.

  • Open new accounts in your name and use responsibly.


Conclusion


Financial planning for divorcees is about reclaiming control and laying the foundation for a new chapter. By creating a realistic budget, dividing assets wisely, updating estate and insurance documents, and assembling a professional support team, you can move forward with confidence.


Disclosure: Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor. Stratos Wealth Partners, Ltd. and Parkview Partners Capital Management are separate entities. Neither Stratos nor Parkview Partners Capital Management provides legal or tax advice. Please consult legal or tax professionals for specific information regarding your individual situation. Past performance is not indicative of future results. For additional information, including our Form CRS, please visit our website.


 
 
 

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Financial Advisor, Investment Advisor, High Net Worth, Wealth Management, Tax Planning, Risk Management, Financial Coordination, Retirement Planning, Charitable Giving, Columbus Ohio, Parkview Partners Capital Management

291 East Livingston Ave.
Columbus, OH 43215


Phone: (614) 427-2132

Fax: (614) 427-2132

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