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Smart Money: 8 tips to rebuild your finances after divorce. For richer, for poorer…… no one says those vows and enters a marriage thinking they will get divorced. Going through a divorce will mean overcoming many challenges and complicated family and financial issues for which professional legal and financial advice should be sought.

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Once the settlement agreement is reached, you will probably want a break from paperwork, solicitors, advisors, or even thinking about your finances. That’s a normal reaction but there’s a few things you should consider when rebuilding your finances after divorce, to ensure you are protected and your finances are on the right track going forward. Today's top videos. Supporting two households – take stock of your finances The reality of every divorce is that the same money that used to support one household now must support two. This will mean that you will need to re-look at your household budget. This is an exercise you most probably already carried out during the divorce process to help calculate any maintenance payments or if one of you is taking over the mortgage going forward. But even if you receive maintenance payments from your ex, while you are adjusting to being single, and especially if you have children, budgeting on a lower household income is probably going to be a necessity at the beginning. The Break-Up. Pic: Facebook. If you have joint bank accounts, you will need to agree whether you will close your joint account, or whether one of you will keep the account. If you are going to keep the account open, contact your bank in writing asking them to change the account into one name. Likewise, if you have joint credit cards, ensure they are paid off and no longer in joint names. Create an emergency fund. Now that you are single, it’s more important than ever to have a cash safety net for any unexpected expenses such as boiler breaking down or car repairs, or if you need to take time out of work unexpectedly or lose your job. Try to have three to six months of living expenses in an easily accessible bank or credit union account. Whilst you can’t dictate how your ex-spouse structures their finances, it would be wise for them to also have an emergency account built up if they support you through maintenance payments. If they need to take unpaid leave or lose their job, it will be difficult for them to continue paying maintenance if there is no emergency reserve in place. Once your emergency fund is in place, you can start considering short- and long-term savings as your new budget will allow. Scarlett Johansson as Nicole, Azhy Robertson as Henry Barber and Adam Driver as Charlie, 'Marriage Story' Film - 2019. Pic: REX. Ensure your ex has sufficient insurances to cover maintenance payments. If there is an agreement for maintenance payments to support you and / or your children, it is very important that life cover is put in place to secure these payments in the event of their premature death. However, this is an area that you should seek advice on, as it is important that the policies are set up correctly to eliminate any Capital Acquisitions Tax (CAT) liability that may be due in the event of a claim. When you are married, there is no CAT liability for money or assets passing between spouses, but that will no longer be the case post-divorce. If you are the recipient of maintenance payments, it is also important to ensure your ex-spouse has adequate income protection cover should they be unable to work because of illness or injury. Your maintenance payments are most probably reliant on their income, so if that were to stop due to accident, illness or premature death, the relevant insurances will mean the maintenance can continue. Kevin Bacon, John Carroll Lynch, Ryan Gosling, Steve Carell, Crazy Stupid Love - 2011. Pic: REX. Review your insurances. You will need to review your own insurances post-divorce also. If you have children who are financially dependent on you, life cover will be a necessity so they would be supported in the event of your premature death. Even if your ex is paying you maintenance and earns enough to support the children, they may have to incur additional expenses, such as childcare, in the event of your death. So, life cover will need to be considered for that reason also. However, it is important again to seek financial advice so that any policies are set up correctly to eliminate any Capital Acquisitions Tax (CAT) liability that could be due in the event of a claim. YOU MIGHT ALSO LIKE. Separately, if you are working, and whether you have children or not, income protection should be a priority. Now that your salary may be funding the bulk of the household bills it should be protected. If you were unable to work due to accident or sickness and your salary stopped, it would have a big impact on the household finances. If you previously had policies such as life cover or specified illness cover jointly with your ex, don’t forget to review these with an advisor and find out what your options are for having your own covers individually. Try to ensure that you retain any health insurance cover for you and your children, as lapses in cover can lead to increased cost or reduced coverage down the road. Ryan Gosling, Emma Stone, 'La La Land' Film - 2016. Pic: REX. Taxes. If you are in receipt of, or if you pay legally enforceable maintenance payments made under a court order and it is for the benefit of a child, it is ignored for tax purposes. If it is for the benefit of the ex-spouse, then it is taxable income. The person paying the maintenance can claim a deduction against their income for both tax and Universal Social Charge (USC). Voluntary maintenance payments (which are not legally enforceable) are not considered when calculating either spouse’s tax liability - the spouse who makes the payments is not entitled to a tax deduction for them and the spouse who receives the payments is not taxed on them. It is important to let Revenue know of your change in status so that the correct adjustment to your tax position can be made.

Marriage advice from divorced woman

Marriage advice from a divorced woman

Relationship advice for divorced women