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Finances during and after a divorce

  //business-finance.news-articles.net/content/2025/09/17/finances-during-and-after-a-divorce.html
  Published in Business and Finance on Wednesday, September 17th 2025 at 21:03 GMT by WDIO
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Finances During and After a Divorce: A Practical Roadmap

Divorcing is an emotionally charged process, and for many people the financial fallout can feel just as traumatic. WDIO’s “Finances During and After a Divorce” guide distills a complex maze of legal, tax, and personal‑budgeting issues into a clear, step‑by‑step roadmap. The article, which can be found on the Lift Online platform (a resource for women navigating divorce), is designed to arm readers with the knowledge they need to protect their assets, plan for the future, and move forward on solid footing.

1. Start with a Reality Check

The article opens by stressing that the first thing any couple needs to do is establish a clear, factual picture of the financial landscape. This means pulling together:

• All bank accounts, retirement plans, and investment portfolios
• Monthly incomes, bonuses, and any side‑income streams
• All debts, including mortgages, credit‑card balances, and student loans
• Any existing legal obligations, such as alimony or child‑support arrangements

The writer notes that many people either underestimate or forget to include small, seemingly insignificant items—such as a half‑owned rental property or an over‑funded Roth IRA—when they prepare for a divorce. The article includes a handy downloadable “Divorce Financial Checklist” (linked in the sidebar) that prompts readers to capture every source of income and debt.

2. Separate Finances Before the Court Ruling

The guide argues that once a marriage ends, the default is often a “joint‑ownership” mindset that can lead to confusion and conflict. The author recommends creating a “temporary financial separation plan” by:

1. Transferring joint accounts to individual names – This protects each spouse’s credit and helps them establish independent financial histories.
2. Setting up a separate bank account for expenses directly related to the divorce process (e.g., court filing fees, legal counsel, mediation).
3. Reviewing insurance policies (health, auto, life) to ensure the right person remains covered.

This process is described in detail, with an embedded link to a “Sample Separation Agreement” template that readers can customize.

3. The Tax Implications You Can’t Ignore

Tax season doesn’t pause for divorce. The article dedicates a full section to the most common tax pitfalls:

• Filing status – You’ll likely need to file as “married filing separately” until the divorce decree is finalized.
• Deductions and credits – Some benefits, like the standard deduction and mortgage‑interest deduction, can be reduced if you lose joint ownership.
• Alimony and spousal support – These payments are deductible for the payer and taxable income for the recipient (unless the divorce agreement dates back to 2019, in which case the new rules apply).

The guide points readers to the IRS’s “Divorce and Taxes” FAQ page (via an internal link) for a deeper dive and includes a short quiz to help determine whether you’ll be filing jointly or separately next year.

4. Planning for the Immediate Future

Once the court has ruled on asset division, the article shifts focus to living on one income. It covers:

• Budgeting basics – The author stresses the importance of distinguishing “needs” from “wants.” A recommended budgeting worksheet (linked) uses the 50/30/20 rule: 50 % to essentials, 30 % to discretionary spending, and 20 % to savings or debt repayment.
• Retirement recalibration – If you were previously contributing to a spouse’s 401(k), the article explains how to re‑allocate those contributions to your own accounts.
• Credit score recovery – A quick tutorial on rebuilding a credit score after the divorce, including checking credit reports, disputing errors, and setting up automatic payments.

The article even contains a short “Quick‑Start” video (embedded in the middle of the text) that demonstrates how to input your data into a free budgeting tool.

5. Long‑Term Wealth Building

Beyond the immediate financial challenges, the article encourages readers to think about long‑term wealth creation. The guide outlines three primary strategies:

1. Investing in diversified assets – Even a modest monthly contribution to a low‑cost index fund can grow substantially over time.
2. Homeownership decisions – Whether to keep the family home or buy a new one, the article discusses equity, refinancing options, and the impact of a lower monthly mortgage payment on cash flow.
3. Education and career development – For many women who have put their career on hold to raise children, the article offers a list of reputable online programs (linked) and a breakdown of tax‑advantaged ways to invest in professional development.

6. Helpful Resources and Further Reading

The guide concludes with a curated list of additional tools:

• Alimony Calculator – Allows users to estimate potential payments.
• Child‑Support Worksheet – Helps determine the monthly cost of raising children.
• “Divorce & Credit” Podcast – Features interviews with financial advisors who specialize in post‑divorce planning.
• Legal Resource Center – A compilation of vetted attorneys who offer sliding‑scale fees for low‑income clients.

Each link is accompanied by a short description of what the reader can expect, making it easy to jump straight into the area that matters most.

Bottom Line

WDIO’s “Finances During and After a Divorce” guide is far more than a collection of bullet points. It’s a thoughtfully curated toolkit that walks readers from the very first step—assessing joint finances—to the final stage of building a new, independent financial future. The article’s tone is reassuring and pragmatic, ensuring that even readers who feel overwhelmed by the legal jargon and tax code are left with clear, actionable steps. Whether you’re just starting the divorce process or you’ve already been served with a final decree, this guide offers a roadmap to financial clarity and long‑term stability.