Going through a divorce can be an emotionally draining situation. But it also can be a financially draining one. Therefore it’s important to take steps to make sure you walk into it and out of it financially secure. Let’s take a look at your options.
Make a List of All Your Financials
You should probably begin by listing and putting the numbers to all your assets and debts to get a full picture of your finances. Here are some examples:
- banking and saving accounts
- retirement accounts
- brokerage accounts
- credit cards
- mortgage(s)
- loans
Update Banking Accounts
As a married couple, you may have had joint banking accounts and credit cards. You’d need to properly split these.
You also should consider opening a personal checking and savings account to manage your future personal cash-related matters. And that may involve changing direct deposit information and other automatic payment data.
But be sure to shop around for the best accounts. Look for ones with no fees and the highest annual percentage yields (APYs). And start working on your post-divorce budget.
Gather All Your Important Documents
You should consider collecting all types of documents related to finances and debts, including:
- bank account statements
- credit card statements
- investment account statements
- mortgage statements
- life insurance policies
- documents related to all debts
- pension documents
- retirement plan documents
This will give you a good view of the money that involves you and your spouse. And it can help make it clearer to reach a mutual agreement.
Update Beneficiaries
One of the biggest mistakes spouses make when going through a divorce is that they forget to update the beneficiaries on important accounts like retirement plans. This overrides even a will, so it’s important to update beneficiaries especially on accounts with your spouse on it. Here is where you may want to look:
- 401(k)s
- 403(b)s
- IRAs
- Roth IRAs
- annuities
- insurance policies
Update Your Will
Your will is a living document, and a divorce could be a right time to give it another closer look. The divorce would likely impact how you’d want your assets distributed. With that said, it also would be a good time to look over your estate plan.
Consider a Lawyer
If you and your spouse can’t agree on how to split shared assets, you’d need to turn to the courts. In this case, you’d want a qualified lawyer experienced in divorce proceedings to have your back.
Understand Divorce Law
How the courts split assets in a divorce varies depending on the state. Most are equitable distribution states. In this case, the court will divide assets in what it considers it to be a fair manner. But this doesn’t necessarily mean a 50-50 split.
The court would consider factors like each of your incomes, age, health, and debts.
However, nine states are community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In this case, the court would view assets as separate spousal property or community property. What was acquired during the marriage would be classified as community property and would be divided equally.
Understand How Retirement Plans Work in a Divorce
Your retirement plan is perhaps your most valuable asset, and it can come under attack in a divorce. The savings accrued in your 401(k) during marriage are usually treated as marital property, so they’d be split based on a qualified domestic relations order (QDRO). In this scenario, an ex-spouse can take a payment from the other’s 401(k) as a distribution or roll it over into their account such as an IRA. The early withdrawal tax would typically not apply when a QDRO is in place, but the receiving spouse would still owe income taxes on the distribution.
The Bottom Line
Divorce isn’t easy. And it can be a financial roller coaster. This is why it’s important to take stock of all assets and debts and work with your spouse to reach a mutual agreement on distribution of joint property. But if that doesn’t work, a court would need to intervene. These proceedings can be extremely complex. So you should seek the help of a qualified divorce lawyer.
The Epoch Times copyright © 2026. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
