5 Critical Actions During a Divorce

By Ashley Bleckner, CFP®, MA

Going through a divorce can be one of the most difficult times in a person’s life. While experiencing the emotional and psychological impact that often accompanies a divorce, there are critical financial actions that need to take place during this relatively short time frame. Here is a list of specific steps to take when going through a divorce. By doing these five things, you can avoid costly mistakes.

Gather and organize information – This is the most important first step. I’ll warn you, it’s not fun, but gathering all the “facts” is imperative before making all the decisions that must be made.

-While going through a divorce, you will need to prove your financial position through documentation. These types of documents include: tax returns, statements, trusts, prenups, liabilities, insurance policies, and property information.

-How are things owned? What was owned before marriage and after marriage? What was inherited? Make note of this for all your assets.

Understand both your pre-divorce and your post-divorce cash flows.

-Look at how your budget has/will change after the divorce; specifically, your income (all money coming in) and your expenses (all money going out). No matter what your income and expense situation was during the marriage, it surely has changed after a divorce. Getting a precise understanding of what your income is and what your new expenses are is important.

*According to Dr. Richard Peterson’s research, ex-wives typically endure a 27% reduction in their standard of living, while ex-husbands enjoy a 10% increase in their standard of living.[1]

Find a trusted team of professionals

  1. Attorney – You have several different options when it comes to your attorney. Ultimately, ask good questions to decide if they are a good match for you. You will be spending a lot of time with them during the process, so it’s important to find one you trust. You also need to decide if mediation or litigation is best for your situation.
  2. CPA – If you do not have a good CPA, now is the time to find one. CPAs can help ensure the division of assets is equal considering tax implications. There has been a lot of tax changes and a good CPA can account for these ahead of time, so there are no surprises later.
  3. Financial Advisor – A good financial advisor acts as the catalyst to your team. She/he will not only optimize your personal financial situation by collaborating with your trusted advisors to find the best solutions for you, but they can also work with you on a personal level to understand your goals and how you can achieve them. During this time of change, a good financial advisor will highlight how alimony, child support and other financial decisions can impact those goals and account for them moving forward.
  4. Emotional Support – Some divorces are amicable and are the best decision for both individuals. Others can take longer than expected and become a pricey endeavor. Regardless, all parties in a divorce (at one point or another) often have feelings of being overwhelmed due to the emotional toll it takes. A very private relationship involving money and family is now a public affair. This level of emotion can make us act in ways we normally would not or never have in the past. Taking care of yourself is priority #1.

Update information – Things have changed, and people live in separate homes now.

-Update addresses on needed documents.

-Separate your accounts and memberships. This often means opening your own checking account and credit card.

Keep your focus – It’s OK to feel overwhelmed and frustrated. It is not OK to give up! The goal is to push forward and make a little progress every day while ensuring you avoid the big mistakes, like big purchases or sales. If you’re thinking of making one, wait a couple days and revisit it. Also, check with your team of trusted advisors to help you navigate these decisions. It’s important to be aware that you are at a heightened emotional state.

Every divorce is different, but after years of seeing couples struggle through this difficult time, these basic checklist items are a great place to get started. Please let me know if you have any questions or would like to talk through a marital change in your life. We are here to help!


[1] Peterson, R.R., 1996. A Re-Evaluation of the Economic Consequences of Divorce. Am. Sociol. Rev. 61, 528–536.