While navigating the divorce process, the couple must work through numerous meetings and negotiations centered on custody, a parenting plan, support and property division. While these factors are crucial, they often overshadow other financial matters that the divorcing couple must address.
During property division, it is wise to factor in the various types of insurance directly tied to the physical assets, such as:
- Homeowners insurance: When determining the distribution of the marital home, the couple must also remember to factor in insurance premiums. It is not uncommon for these to be set up as auto-pay and linked to vehicle insurance. As such, the divorced couple might forget them – with the former owner still responsible for insurance payments.
- HOA fees: One factor that couples miss during property division is HOA fee responsibility. Depending on the neighborhood and its features, monthly or quarterly homeowner’s association fees can represent a substantial sum.
- Vehicle insurance: Like the marital home, the property division process will split the owner’s vehicles. This can be cars, trucks, motorcycles or boats. Whatever the final decision, it is important that the correct owners are listed on and are paying for that particular vehicle’s insurance.
Even though several intangible finances such as retirement funds, a stock portfolio or deferred compensation will likely be addressed during the property division phase of the divorce process, many others might be missed, including:
- Life insurance: Whether it is a life insurance policy covered through the workplace or a private organization, couples must address these financial obligations. If nothing else, the ex-spouse who continues carrying the life insurance should update the beneficiary to reflect his or her new reality.
- Medical insurance: It is not uncommon for one spouse to shoulder the financial burden of health insurance, dental insurance and vision insurance for the entire family. When divorce becomes a reality, it is necessary that the couple discusses these obligations and factors the payments into the overall financial picture.
It is important to remember these financial obligations when determining the overall property division. These considerations can have a direct impact on either party’s post-divorce finances.
Even if it is the best solution for your future, divorcing couples might find the process challenging. These negotiations can be emotionally turbulent, leading to heated debates and bruised egos. It is critical that both parties work together to reach an equitable distribution of finances, physical assets and digital assets.