In our introductory article in this two-part series, we talked about the importance of both spouses having a handle on your family’s finances. Not because one of you isn’t equipped to handle it, but because life is unpredictable. Should something unplanned take place, like disability, death or divorce, perhaps you won’t have to pay an attorney to figure out your financial situation. And with all of the other expenses that Oakland County families face these days, that’s a good thing!
If you remember, we talked about the fact that you need to make a complete list of all your assets. Thus far, you have all of your financial accounts, including all pensions, retirement savings, IRAs and 401ks, and also your physical assets, like your home and cars. But what else is important for you to make note of?
Next, put your insurance policies on the list!
Also, take note of where the policy is held, and whether or not the premium has been paid. You should also note who the beneficiaries are, as this could make a big difference for you. Forgetting to update your life insurance policy and beneficiary is a mistake that many newlyweds make. Unfortunately, not updating the beneficiary on your life insurance policy after marriage could have devastating results in the event of an untimely or unexpected death!
The same applies after a divorce. All of the beneficiary and address information should be updated on a life insurance policy after you get divorced. Nothing would be more frustrating to your new spouse if your life insurance policy paid out after your death – to the wrong spouse! We’ve seen that happen right here in Oakland County.
Make sure your list is kept in a safe place!
Once you and your spouse have made up your list, we recommend that you make several copies, and keep them in a secure location. Actually, put a date and signature on the list and have multiple copies. This way, they won’t get lost or misplaced over time. In addition, because you put a date on the list, only the very latest version will be used. Also, in the event of a divorce, each one of you will have a copy of your assets list that you made up together, signed and dated. This will make the entire process much easier.
We know this is a hard but important topic. But by opening the dialogue about your family’s financial position, you pave the way for all those important topics that people should talk about, but don’t. Subjects like how each partner may want their assets managed in the event of death, or how certain assets should be divided in the case of divorce. The simple act of making an assets list and talking about what you own, will help you to start work on a “disaster plan”.
Crisis is hard to plan for, but you CAN be prepared!
A divorce, or the unexpected death or disability of a partner, can leave people feeling like the rug has been pulled out from under their feet. Having a plan in place for your financial future in all possible eventualities greatly reduces stress during difficult times. In addition, decisions made when you’re calm, and can think through your options, will be more helpful than choices made in an emotionally charged situation. Often times these plans are made with the help of lawyers, accountants, tax preparers and trusted family members.
If, however, you are in a situation where you’re trying to sort out your family’s assets, and you need help, we are here for you. The attorneys at the Kronzek Firm have decades of experience helping divorcing couples in Oakland County to divide their assets for fair distribution. We can help you too. Call (248) 479-6200 at any time to discuss your situation with a skilled family law attorney.