10 Steps to Make the Most of Your Divorce Settlement

The journey to divorce can be a long one. Once you are nearing the finish line, you might feel overwhelmed with the thought of “what next?” The 10 steps below will help you begin the next chapter of your new life:

  1. Get the best settlement you can!

    Don’t let divorce fatigue prevent you from paying attention to important final details. There are often many decisions made at the end of the process as last-minute, edited drafts of your Marital Settlement Agreement (MSA) are emailed back and forth. Work with your attorney to be intentional about when to compromise and when to stand firm. Have your financial advisor review the document before you sign to make sure they understand the nuances around amounts, timing, taxes, separating assets and any support payments. Create a system to ensure important deadlines are met so you can get your case across the finish line.
  2. Take an honest assessment of your feelings and finances.

    Your brain can limit you from fully processing the divorce until it is over, so expect things to be harder initially post-divorce. It’s very common to feel depressed after you become legally single. Take care of yourself, be patient and seek help where needed. Aside from obtaining emotional support from loved ones, it is important to take inventory of your new financial state. This includes understanding your current income, expenses, debts and any immediate financial needs. A good place to start is by reviewing your credit report to ensure all joint accounts are closed. From there, start taking note of cash coming into and going out of your bank accounts regularly. Update your budget to reflect your new financial situation, accounting for your income, alimony, child support and any new expenses.
  3. Build your professional support team.

    This might include a therapist, a financial advisor, a CPA and a trust/estate attorney. Seeking professional advice early and often will help you set yourself up for success in your next chapter. A financial advisor can help you get a handle on the items mentioned above, as well as managing investments and planning for retirement.
  4. Prioritize what decisions need to be made now and later.

    Try to give yourself time and space before major changes such as moving, changing jobs or committing to a new romantic relationship. You’ve just been through a lawsuit with the person who was supposed to love you most, resulting in making a significant number of challenging financial, emotional and relational decisions. Giving yourself a solid year before making any decisions with significant ripple effects will increase the likelihood that when you do make those decisions, you will be happy with the results long-term. It will also give you some time and space to enjoy your new freedom.
  5. Clarify your individual money values.

    You might start by reflecting on what you learned about money growing up and what you learned about money during your marriage. It is common for these values to evolve, and your personal values might differ greatly from what was expressed when you were a married couple. Time is money, so your values might be tied to how you spend your time in addition to your actual cash.
  6. Create and implement a strategy that honors your values and goals.

    Once you understand your values, it is easier to set clear goals. Whether it is saving for retirement, buying a home or funding education, make sure you are intentional about aligning your actions with your goals. Everyone’s strategy will differ, but there are several universally beneficial concepts to consider:
    • Establish an emergency fund: Before investing, ensure you have an emergency fund to cover 3-6 months of living expenses. This provides a financial cushion and reduces the need to liquidate investments in a crisis.
    • Invest wisely: Depending on your age and financial situation, consider investing in a diversified portfolio of stocks, bonds, and real estate to grow your wealth. A financial advisor can provide personalized advice based on your financial situation, goals, and risk tolerance.
    • Think long-term: Focus on long-term investment strategies that have the potential for gradual growth. Avoid high-risk investments unless you know you have the risk tolerance and financial ability to absorb potential losses.
  7. Invest in yourself.

    Aside from making investments into financial assets, you should not feel guilty investing in yourself. This might include educating yourself in a new area or upgrading your skills, which could lead to better job opportunities and increased earnings potential. This also includes delegating or outsourcing tasks that take time and do not help you reach your ultimate goals.
  8. Update your online information and important documents.

    You might initially be shocked at how many places your ex-spouse’s name shows up. Whether it is an emergency contact, an authorized user, or a beneficiary of an account or insurance policy, ensure you replace them with another trusted contact. It is also important to review and update your estate planning documents, including your will, power of attorney and healthcare directives.
  9. Reflect and reassess the strategy annually.

    Regularly review your budget, investments and financial plan to ensure you feel comfortable. Your strategy might change based on fluctuations in the market or your personal circumstances. As your values and goals evolve, your plan should as well. It is also crucial to review and understand what you are required to do, if you have any limitations, and what you are entitled to receive from your Marital Settlement Agreement. Some payments might not occur until after the divorce and you don’t want to miss out on an asset that was assigned to you.
  10. Give yourself grace and permission to splurge periodically.

    The journey post-divorce might feel like two steps forward, one step back, for some time. Make sure to celebrate your accomplishments, both big and small, and try not to sweat the minor things that don’t go according to plan. While saving might be a crucial part of your plan, periodic splurges will likely not derail your long-term plan and can give you something to look forward to when times are tough.

Making the most of your divorce settlement requires strategic planning, financial awareness and disciplined execution. By following the steps above, you can take control of your life and finances and make your next chapter everything you want it to be.


Heather Locus

Heather Locus

Partner, Wealth Advisor

Heather is a Partner, Wealth Advisor in our Itasca, IL, office. Heather founded the Women’s Service Team and leads the Divorce Practice Group. She loves solving complex problems by balancing financial and emotional components with tax and legal issues. Heather educates on transitioning through new phases of life with confidence and clarity. She authored The Next Chapter: A Practical Roadmap for Navigating Through, and Beyond, Divorce, and you can read her latest divorce tips at Forbes.com. Heather joined legacy firm BDF in 1998 and soon became one of the first non-founding Partners of the firm.


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