Don’t be blind-sided by support payments going away

Your divorce settlement is finalized, you know what your support payments are, you’ve settled into your living arrangements and set your budget, time goes by and suddenly you receive notice that your former spouse intends to renegotiate support payments.   Failure to recognize that support payments don’t typically go on forever and not doing anything to prepare for the day they may change or go away, can leave you in a precarious financial position.

To protect yourself from changing support payments, Divorce Financial Planning expert, and co-author of the book “When Harry Left Sally”, Eva Sachs suggests doing these 3 things:

  1. Negotiate Smart – work with your lawyer to ensure a period of certainty for your spousal support payments. Having a period where support cannot be renegotiated gives you better confidence in making financial decisions and commitments, allowing you time to get settled, into a routine and financially ready should the day come you receive notice your former spouse intends to renegotiate.
  2. Save – while it may be difficult initially, manage your income and spending to get to the point where you can save at least a portion of your support payments. If over time you can adjust your budget and build savings, these savings can be used either for your retirement or other goals as well as protecting yourself in the event support payments change or go away entirely.
  3. Protect Your Payments – work with your lawyer and a financial professional to determine a level of life insurance that must be maintained by the support payer with you (and/or children for child support) as beneficiary. Life insurance should be adequate to replace the support income you would have been receiving in the event the payer passes away. The premature death of the support payor is not the biggest risk – the possibility of disability is larger. While life insurance is often part of settlement terms, disability insurance isn’t.  If you are negotiating a divorce, it may be an idea to at least speak with your lawyer and financial professionals about whether or not it may make sense to add it. One of the main reasons support payments can be successfully renegotiated is a result of financial impact due to health issues.  By requiring the payer to maintain adequate disability insurance, you are protecting yourself in the event your former spouse suffers a disability. With insurance, they will still have an income and a better ability to maintain those support payments.

As expert, Eva Sachs, says “You want to have a good understanding of what your financial future will look like.  Spousal support is part of making sure that you can continue to meet reasonable lifestyle goals “

As special thank you to Eva Sachs for sharing her expertise.   As a pioneer in divorce financial consulting, Eva has shown countless clients how the combination of income, property division and support come together with post-divorce budgets.   She deals with divorce money matters supporting couples/individuals working with traditional lawyers, mediation and collaborative practice alike. Eva is a Certified Divorce Financial Analyst and a Chartered Financial Divorce Specialist. She is a member of the Institute of Divorce Financial Analysts, and Collaborative Practice Toronto.  For more information, visit www.evasachs.com

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