Divorce often brings a whirlwind of emotions and challenges, and for many, it can significantly alter financial circumstances. Through years of advising dual citizen olim, I’ve witnessed firsthand the financial challenges divorce brings. It’s not merely about having (or losing) money; it’s about navigating the division of assets in a fair way, which is not always 50/50. Despite the potential for financial strain, it’s sometimes possible to organize the resources acquired through divorce to secure one’s future. 

Reinventing Financial Strategies Post-Split 

Divorce necessitates a shift in mindset from joint decision making to independent financial management since you, and only you, are responsible for your finances. Financial success can no longer be blamed on your spouse’s financial decisions; your spending, saving, and investing determines your financial future. 

As part of the divorce settlement, you may receive a substantial sum and the instinct might be to make immediate financial moves. However, the sage advice is to pause and plan. Parking your funds in a secure, short-term deposit buys you time to strategize without the risk of hasty decisions. This period is crucial for contemplating your future needs, potential income sources, and the lifestyle you aspire to maintain. 

Diversification: The Golden Rule 

Diversification stands as the cornerstone of risk management in any investment portfolio. Post-divorce, assessing and adjusting the investment mix is vital. If your investment portfolio was divided in half, consider changing the investments to align with your single risk tolerance and goals.  

Navigating Taxes and Retirement Plans 

Divorce’s tax implications go beyond filing separate returns. A comprehensive review of potential capital gains, and how to manage them, is essential, before agreeing to any division of assets.  Also, many people don’t realize that a divorce after 10 years of marriage may make you eligible for spousal American Social Security.  

The Path Forward 

As a Certified Financial Planner™ practitioner, I focus on creating a sustainable income stream for my clients for life. If you’re navigating the complexities of managing your post-divorce finances, especially with cross-border elements like managing U.S. portfolios from Israel, professional advice can be invaluable. 

If managing cross-border investments feels overwhelming, we’re here to help. For assistance with your U.S. portfolio from Israel, reach out (02) 624-2788. Together, we can chart a course towards a financially secure future. 

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Published March 28, 2024.

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