You’re Divorcing or Lost Your Spouse: What Do You Do Financially?

Neither situation is easy, and trying to figure out the financial side of things can be especially difficult. Here are some steps to help get finances in order.

A divorcing woman looks thoughtful as she looks at her laptop at her kitchen table.
(Image credit: Getty Images)

The loss and grief following a divorce or a spouse’s sudden death can feel overwhelming. Uncoupling a marriage does not end a relationship. Decisions about money, the division of assets and possibly parenting must be shared between the separating spouses for quite some time. The sudden death of a spouse, on the other hand, often puts the surviving spouse in the unenviable position of finding a way forward alone. It can be challenging to manage the daunting financial repercussions that come from these life changes.

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Differences between divorce and death of a spouse
Header Cell - Column 0 DivorceDeath of spouse
Assets/liabilitiesDivided by negotiation or trial. You can be creative.Pass based on wills, trusts, beneficiary designations or probate.
IncomeChild support, alimony or none.Income ceases unless there is a spousal benefit.
Income taxesYou file single the year you get divorced.You still file married the year your spouse passes away.
Estate taxN/ADepending on the size of your estate, there may be a federal and/or state tax.
InsuranceYou may want to use it to insure certain payments.It will pay based on beneficiary designation and could fund an income shortfall.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Lane Marmon, JD, MBA
Senior Vice President, Financial Adviser, Wealth Enhancement Group

Before joining the financial services industry as a Senior Vice President at Wealth Enhancement Group, Lane worked as a senior associate for the law firm of Rutkin, Oldham & Griffin, LLC, litigating high net worth dissolution and child custody matters. Her work has been widely recognized and she frequently draws on her extensive experience to write articles and speak at events on legal and financial matters.