Look out for these financial pitfalls in divorce

On Behalf of | Jul 14, 2022 | Divorce |

Divorce can significantly change a New Jersey family’s dynamic. In the midst of an extremely emotional time, you’ll also need to follow up on important issues to make sure you avoid additional financial challenges. Here are a few important factors to consider.

Dividing your assets

Getting a divorce often means untangling assets and other financial matters you and your spouse have shared for years or even decades.

The largest asset you may have to divide in your divorce is your home. Determine who will receive profits from the home if you sell your residence and check mortgage documents to see which spouse is responsible for the mortgage loan. It is also important for the spouse who is granted the home to verify whether they can qualify for the mortgage on their own.

Examine your insurance policies

Insurance policies that cover casualty and property may only have one spouse’s name attached since these products are normally issued with homeowners insurance. If you are granted property in your divorce, you should ensure that the policy is under your name in case you need to file a claim.

Keep in mind that your auto insurance rates could go up after your divorce is finalized. Married couples often receive a discount from insurers since marriage is a sign of stability to insurance companies. It’s also a good idea to get rid of stacked coverage if you and your spouse had several vehicles when you lived together. Doing away with stacked coverage can lower your premiums so you’re not paying for more coverage than you need.

In terms of life insurance, you can leave your policy intact if you want your ex-spouse to receive the proceeds upon your death. If you only want your children to receive the life insurance funds, you may want to consider creating a trust for their benefit, with appropriate protections and safeguards if they are minors at the time of your death.