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Protecting finances is critical after divorce

Divorce can quickly take not only an emotional toll on a person in New Jersey but also a financial one. Some research studies indicate that couples getting divorced can lose more than 70 percent of the couple's net worth, on average. A couple of tips may help people to protect their financial futures following divorce.

First, it is critical that people change their beneficiary designations. This means updating a will after getting divorced. People would also be wise to file new beneficiary-designation paperwork for their insurance policies and retirement plans. This will help to make sure that their wishes are honored. Otherwise, funds may end up being given to a person's ex-spouse, if that person is still listed as a beneficiary.

It is also essential for people to fully understand their debt obligations following divorce. If a couple has a large amount of debt, a debt relief provider may be able to go over options with the parties before their divorce is finalized. Proper legal guidance is especially important if one spouse thinks the other one will decide to file for bankruptcy following the dissolution of the marriage. An understanding of the law may help the spouse who does not plan to file for bankruptcy to protect his or her interests.

When two people in New Jersey are able to find common ground during divorce proceedings, they may choose to go through divorce negotiations or mediation, for example, rather than divorce litigation. This is because divorce litigation can be a more stressful, costly and public process. However, litigation is inevitable if both parties cannot see eye to eye, in which case a judge will have to make important property- and asset-related decisions for them.

Source: msnewsnow.com, "7 ways to protect yourself financially in a divorce", Andrew Housser, July 18, 2016

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