Divorce Done Differently by Denise French
Thinking about divorce? If you are, kudos to you for being here and reading this article. Careful preplanning can save you time, money, and emotional turmoil.
This is already an emotional and stressful time. If you are like me and many of the people we guide through divorce, this also be a time when your thinking is the cloudiest. It is typical to have trouble understanding simple concepts or even wrapping your head around everyday problems. That is normal! Relax, take a deep breath, and know you can do this. We can help. Here are 5 simple things which can help you prepare financially for a divorce.
1. Have access to money – liquid cash or credit.
This is vital!! You deserve to have access to funds for your basic living needs as well as professional support throughout your divorce. This can mean a credit card in your name only, a separate bank account in your name, or even a stash of cash in a shoebox or safety deposit box.
Many couples function well working from joint accounts during their divorce, but we have also seen vindictive spouses empty joint accounts as soon as divorce is mentioned. You do not want to be left without access to funds to pay for divorce professionals or for basic living needs. Be smart and take the necessary precautions before you discuss divorce with your spouse.
We do NOT mean hide money – we are simply suggesting you have access to funds which cannot be taken from you by an angry spouse without your approval. You can open a credit card in YOUR NAME only while still using the marital income to qualify for a larger amount of credit. There is nothing wrong with doing this prior to filing for divorce. Be sure to do it before temporary orders are in place (aka when you file for divorce.) If you have already filed for divorce, check with your attorney on what you can, and cannot do, under the laws in your county.
2. Gather all the financial documents you can find.
Financial statements provide a road map to your estate. They are the building blocks to a marital inventory and proof of ownership or debt. I am referring to bank statements, retirement and investment account statements, mortgage statements, paystubs, tax returns, insurance policies, credit card statements, and anything else that seems important. Having copies of all this not only helps you stay informed about your financial situation but will save you money when you meet with a divorce professional and already have an organized file of your financial life.
Another reason to gather all the documents you can is to search for hidden assets. We have had many women come into our office over the years with a box (or boxes) of documents. One woman was told over and over by her husband they were “dead broke”. He would not even purchase new bed mattresses – he only bought them used. By going through old tax records, we found $100,000 plus in CD’s and two rent houses she did not know they owned!
Information is power – gather all of it that you can, prior to beginning your divorce.
3. Take some time to thank about what you want in your future.
It can be easy to get so wrapped up in the details of the present you forget about what is next. Do not make that mistake! Stop and take some time to think about your life after your divorce. In particular – the financial side. Where do you want to live? What are your expenses going to be like? I recommend you put together a budget outlining all your expected living expenses. This will give you some clarity about what you will need moving forward and can lessen some of the anxiety about the future.
It may also make sense to work with a divorce financial advisor prior to filing so you can have an idea of what life after divorce will look like.
4. Find a Divorce Financial Coach or Therapist.
This may not seem like it is a financial step, but it is. A professional on your team that will help you make sound decisions can make a big financial impact on your future. Emotions run high during the divorce process and as we said earlier, your thinking will be cloudy. A divorce coach can help you work through those emotions to free your mind up for the business of divorce so you can objectively focus on the financial outcome. A therapist can help you unbundle why you are in fear or why you feel the way you do and help you overcome obstacles entangling you emotionally.
When I went through divorce I had an amazing therapist guiding me and helping me untangle the feelings I had. To be able to negotiate from a place of power, I had to get my emotions behind me and look at the situation like a business negotiation. I worked with that therapist for 2 years after the divorce to help me not pick the same type of person and I didn’t. I am now remarried for nearly 12 years as of this writing and with a wonderful man who is very good to me and my daughter from my prior marriage.
5. Finally, think about how you would like to divorce.
If you think it is going to be a battle for every asset and advantage, then adversarial litigation attorneys will be involved, and the cost will be $20,000 – $50,000 or more. If you envision a more amicable process, then perhaps mediation is in your future. It will allow the two of you to talk through the issues and agree between yourselves what works best, saving a lot of money in the process. In either case you may want a financial professional, like a Certified Divorce Financial Analyst®, to be part of your team. The CDFA® can help remove any confusion about your financial situation, present options for the division of your assets, and provide a picture of how a given settlement will impact your financial future today and in the future.
A divorce is probably the largest financial transaction most people will undertake during their lifetime so make sure you are fully informed. These 5 simple things will get you started on the right track and help make the difficult process of a divorce go more smoothly.
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