By Daniel Korleski, MBA
Ending a marriage is far more complicated than just ending a romantic relationship. Not only must you grapple with the emotional ramifications of separating from your spouse, but you must also face the logistical challenges of divorce. It can be overwhelming to consider the prospect of finding a lawyer, managing finances, and potentially relocating; however, these steps must be taken to move forward.
Divorce is a legal process that requires much thought and planning, especially for financial reasons. Before you take the big step, our team at Cobalt Private Wealth has come up with the following tips to help you prepare and think through this upcoming transition—and make it as smooth as possible.
Don’t Rush a Divorce
First and foremost, don’t rush the divorce process. There are so many difficult decisions to make: property division, child support, parental responsibilities. Each one of these decisions has a long-term impact on your emotional and financial well-being.
Take a deep breath, and take your time making each decision. I even tell my clients to remove their emotions from the equation and think of each decision as a business transaction. This may sound cold, but emotions are at an all-time high during a divorce. It’s critical to calm these emotions and make decisions as rationally as you can.
Get Organized
Getting organized before a divorce can help minimize stress and reduce the chances of running into problems down the road.
Start by making a list of all your assets, liabilities, and financial accounts, including:
- Bank statements
- Insurance policies
- Investment accounts
- Estate planning documents
- Tax returns for the past few years
- Retirement account statements
- Loan documents
- Real estate deeds and car titles
You’ll need to gather these items and give them to your attorney. It may also be helpful to divide them up into marital property (i.e., assets and debts obtained during the marriage) and non-marital property (i.e., assets and debts obtained before or after marriage).
Know Your Cash Flow
Even if you anticipate having a considerable net worth after divorce, it’s important to know what your cash flow will look like moving forward. You don’t necessarily need to budget and track every expense, but you do need a clear idea of how much money you’ll have coming in each month.
Write down your income, including your salary, alimony, child support, dividend income, and so on. Then write down all of your expenses. (Don’t forget one-off expenses like property taxes and private school tuition that may not show up on your monthly bank statements.)
Seeing these numbers in writing will help you get comfortable with your new cash flow and help you prepare for any unexpected expenses.
Plan Ahead for Post-Divorce Life
Life drastically changes after divorce. Instead of dividing financial tasks between the both of you, you become solely responsible. Now is a good time to start:
- Making a legal name change
- Updating all assets, documents, and liabilities
- Changing beneficiaries and emergency contact information
- Setting up a filing system to keep tax records, investment documents, insurance policies, and legal information organized
Be Gentle With Yourself
No matter how amicable you try to make it, divorce is messy. It’s emotionally, physically, and financially draining.
Go easy on yourself. You may be in a fog right now—and that fog may last for quite some time. Seek therapy or counseling if you need to. Do whatever it takes to protect your mental and physical health.
Find Your Solid Support
A reliable circle of friends and family helping you through difficult times is invaluable, and this is especially true when going through a divorce. Having a strong emotional support system in place through this major life challenge is key—and the same goes for your financial needs as well. To obtain the best possible outcome, you may want to enlist the advice and help of a professional financial advisor to assist you through this transition. They can provide objective advice and guidance, help you identify and address potential issues, and, most importantly, listen to your fears and concerns.
We at Cobalt Private Wealth understand the emotional and financial toll that can come with divorce. We would be honored to join your support system and
provide the financial guidance you need during this time. Our advisors specialize in helping clients navigate divorce-related financial issues and create a plan that allows them to move forward with comfort, clarity, and confidence. If you’re looking for a financial planner who understands your unique needs and will help you feel confident in your decisions, please don’t hesitate to reach out to me at danielkorleski@cobaltprivatewealth.com or 719-332-3863 to schedule a meeting.
About Dan
Daniel Korleski is the President & CEO for Cobalt Private Wealth, where he helps his clients grow, manage, and protect their wealth so they can work toward a stronger financial future. With over 30 years of experience in the financial services industry, Dan has served as the managing director for Investment Trust Company, chief investment officer for the Wealth Management Group at American National Bank in Denver, and regional investment manager for the Greater Colorado Region of the Private Bank at Wells Fargo, where he oversaw the management of over $2 billion. In 2008, he was appointed by the mayor of Colorado Springs to the City’s Investment Advisory Committee. Dan holds an MBA in investment management from Midwestern State University in Wichita Falls, Texas, a Bachelor of Science in Finance from Florida State University, and is a member of both the CFA Society Colorado and The Financial Planning Association.
Dan loves to give of his time to his community and is currently serving as the Board Chair of Catholic Charities of Central Colorado and oversees the Homebound Ministry at St. Paul Catholic Church. He has also served as Chair of the Board of Trustees of Pikes Peak Hospice Foundation, President of the Broadmoor Rotary Club, and Vice President of the Board for the Pikes Peak Chapter of Trout Unlimited. Dan was born and raised in Spain and is fluent in Spanish. When he’s not working, you can find him traveling around the world with his wife of 25 years, Montse, fly fishing, golfing, and hiking with his rescue pup Brandy and Golden Retriever Quique. To learn more about Dan, connect with him on LinkedIn.
