Planning For A New Beginning & Your Path To Financial Independence After Divorce

-By Andrew Schneider, Financial Advisor

Major relationship transitions can be overwhelming, both personally and practically. Dealing with the impact of divorce on your financial life can make an emotionally difficult time even more challenging. Although divorce is seldom easy, you can prepare for it—and being prepared will help you feel more in control and better equipped to make informed, confident decisions about your financial future.

Assembling a Team of Trusted Advisors

Going through a divorce can be lonely, which is all the more reason to surround yourself with an experienced team of advisors who can provide critical guidance and caring support. To help you through the process, consider building a team that includes:

• An attorney who safeguards your best interests and can deal objectively with the many complex, often emotional, issues that may arise.
• An accountant who can advise you on changes to your tax status.
• A personal counselor, such as a therapist or a clergyperson, who can help you cope with private, personal issues you may not feel comfortable discussing with a legal or Financial Advisor.
• A Financial Advisor who focuses solely on you—and your needs and wishes—and who can help you create and implement strategies for helping you achieve your goals.

Understanding Who Gets What

Divorce involves not only an emotional separation, but also a financial one. Determining which assets you will own, and which will be owned by your former spouse, is part of the process. While the specifics vary from state to state, you should be aware of some important concepts:

• Marital property includes virtually all property you and your spouse acquired during the marriage. This includes real estate, investments, bank accounts, art collections and other physical property.
• Individual property includes property that was given to or inherited by you, acquired before marriage or acquired using property that was a gift, inheritance or already owned before marriage. It also includes any property that was excluded by a premarital or other agreement.

How marital property is divided depends on where you live. Most states rely on the concept of equitable distribution, where the goal is to achieve a division that is fair based on contribution of each spouse, length of the marriage, child custody needs and each spouse’s financial needs, circumstances and prospects. Some states, such as Nevada, adopt a community property approach, where marital property is divided evenly between the spouses.

Taking Control of Your Financial Life

As you prepare for the next chapter of your journey, you will need to consider the following key aspects of your financial life:

• Your credit. Good credit translates into financial flexibility, so check your credit report and protect your credit rating by closing joint credit cards and other joint accounts.
• Your health and retirement. Make sure you understand your options for healthcare coverage and how much it will cost. You will also want to know whether you and your former spouse have a beneficiary interest in each other’s retirement plans.
• Your estate. If you have a trust, find out what happens if your former spouse remarries. Don’t forget to review your life insurance policy, if you have one, and consider designating a new beneficiary. It is also wise to review your estate planning documents—your will, healthcare directive, power of attorney and retirement accounts—and explore your options for changing fiduciary or beneficiary designations.
• Your children. You may need to prepare for child support, as well as the costs of tuition. extracurricular activities and healthcare.

Your change in circumstances is an opportunity to revisit and reset your priorities and start fresh. Regardless of how complex your situation may be, a Financial Advisor with experience coaching people through life transitions can help you identify your specific financial needs and goals, and then bring together the right resources to help you move forward in your new life with confidence.

Article by Morgan Stanley and provided courtesy of Morgan Stanley Financial Advisor.

Andrew Schneider is a Financial Advisor in Las Vegas at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). He can be reached by email at or by telephone at (702) 792-2060. His California Insurance License # is 0M31624. His website is

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

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