The divorce process is full of them.
What am I talking about?
Those “why didn’t I think to ask that earlier?” laments, where you realize you could’ve saved yourself a whole lot of money, heartache, and poor knee-jerk decisions by considering certain questions.
What kinds of questions?
If only there were a list…
Like this one. Print it, use it, share it. You’ll thank yourself immediately. And so will anyone you share it with.
(Can’t answer all of the questions below?
Don’t panic. A qualified professional can help you. That’s what I do.)
The biggest financial mistakes in divorce come from not looking at and considering the impact of these issues:
- Can I afford to help my grown kids financially, and should I put their security before mine?
- Do I have a clear understanding of my current financial situation (how much I have, and how much I need to keep my lifestyle)?
- How can I minimize the cost of divorce, and what fees might surprise me?
- Should I fight to keep the house, and can I even afford to keep it?
- Will I need to care for my aging parents, and what might that cost?
- Which professionals do I need on my divorce team (see below)?
- How will divorce impact my Social Security benefits?
- What will be the tax impact of my divorce?
- How will the bills get paid before the divorce is finalized?
- What happens to our credit cards, loans and other debts?
- What if my husband owns a business?
- How do we figure out a parenting plan for our minor children?
- Who is responsible for the legal fees and other divorce expenses?
- Am I eligible to receive spousal support (alimony), and if so, how much and for how long?
- How does child support work?
- Which assets, savings and investments are subject to division in a divorce?
- Will I need a Qualified Domestic Relations Order (QDRO)?
- If I suspect my husband has been hiding money, how do I find it?
- How long will the money from my divorce settlement last?
- Which assets should I go after in the divorce settlement, and which should I let go?
- What type of divorce (litigation, collaborative, mediation) makes sense for me?
- Should I try to get more assets or more spousal support (alimony) from the divorce?
- How can I evaluate the lifestyle impact of different divorce settlement scenarios?
- What are some often overlooked marital assets that should be considered in my divorce?
- Will I receive part of my husband’s company pension?
Again, no one would expect you to know the answers to all of these. Consider this a handy pocket reference you can take to meet with your professional advisor (You can also take it a step further by using divorce worksheets & checklists). Armed with these questions, you’ll be better prepared than 99.9999% of other women who’ve been in your shoes.
And you’ll be able to afford way nicer shoes, for that matter.
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Need help with the answers?
I can provide you with the expertise and empathy to help you answer each of the questions above and anything else that may be relevant to your personal situation. Learn more about my solutions for women here.
Please contact me to learn how you can make smart financial decisions before, during and after your divorce.
#1 Your Divorce Team
Women going through divorce are faced with what can feel like a never-ending series of questions, decision, and emotions. To make the best decisions in the context of the divorce process, assembling a team of experienced, complimentary professionals is the most assured path to success.
Typically, older divorcing women with a substantial amount of marital assets available for division of assets ($1 million or more in liquid, investable assets) may require the assistance of a number of professionals. The exact combination of a divorce support team varies depending on the complexities of the case.
The most important member of the team is a family law attorney who is experienced in divorce and custody law in the state that the divorce will take place. Other potential divorce team support members include:
- Forensic Accountant: Typically employed in cases where one spouse may be suspected of hiding assets or complex financial issues are at play, a CPA with this certification assists the attorney in understanding and explaining these issues and their role in the equitable division of assets.
- Divorce Financial Planner/Certified Divorce Financial Analyst: Provides an expanded understanding of the woman’s current standard of living and how any division of assets will impact her and her children’s lifestyle. Also places settlement options in context for retirement.
- Mediator/Coach: For couples deciding to employ a collaborative divorce process, the mediator/coach, along with the rest of the collaborative team, supports the couple in making decisions about the division of assets.
- Counselor/Therapist: Divorce is one of the most stressful events in life. By including a counselor or therapist on the team, more emotional support is available to the divorcing woman and her children.
These potential team members complement each other with their skills and experience, providing the divorcing woman with the expertise she needs to make the best decisions for her that will help her determine and meet her lifestyle and financial goals.
#2 Consider a Collaborative Divorce
According to the Holmes Rahe Stress Scale, which ranks 43 life-changing stressful events in order of the amount of stress they impose on people, divorce ranks second. The only event that causes more stress than divorce is the death of a loved one. This is true for men and women of all ages.
No matter how old a woman is or how many years she has been married, or whether or not there are children involved, divorce is emotionally and financially difficult. A new trend encouraged by many courts and divorce lawyers is collaborative divorce. This takes the important decisions out of the hands of the court and puts the parties in charge of coming to a mutual agreement regarding all relevant issues to the divorce process. Attorneys and consultants work with the parties to make the life change with the least amount of animosity possible.
How the collaborative divorce process works
The parties have their own attorneys and all agree to settle their issues without going to court. The divorcing couple and their attorneys sign a participation agreement confirming they will not take the matter to court. Various experts may be called in to assist the parties in coming to an agreement on all matters. Financial experts may meet with the parties to discuss the division of assets, assumption of debt as well as spousal and child support. Child psychologists may be consulted in making child custody decisions.
In order to maintain the integrity of the process, the attorneys who work on the collaborative process commit themselves to doing everything they can to resolve the issues in a satisfactory way. If, as happens only occasionally, the parties cannot agree on issues, the attorneys who worked on the collaboration must bow out of representation. Different attorneys are brought in for litigation. This keeps the attorneys from threatening court proceedings if they do not get their way.
Benefits of collaborative divorce for women
• It is a more peaceful process with less acrimony than a conventional divorce. An atmosphere of cooperation is the norm, not animosity.
• The parties are both considered “team members” instead of adversaries.
• The process focuses on making the best decisions for all parties.
• The experts that are brought in to help work for the team, not for one party or the other. If one person wants a second opinion, for example to place a value on a business, the team will hire someone to give the second opinion who still works on behalf of the team.
• It saves money. Experts estimate that a collaborative divorce costs half of much as a traditional divorce that requires litigation and going to court.
• It is faster and generally can be completed in as few as four months as opposed to a year or more to settle contested issues with litigation.
• The parties agree in writing to be honest with each and provide full disclosure of all relevant information.
• If there are children, the process allows a parenting plan to be developed that will maintain amicable relationships and ease future communications.
• The parties can make any agreements that are acceptable to both of them. They are the decision makers, not a disinterested court.
• There will always be emotional pain associated with divorce; however, those women who have gone through the collaborative divorce process express less bitterness than those who have experienced a traditional divorce.
#3 Difference Between Legal Separation And Divorce
The dissolution of a marriage can be a difficult and time-consuming process. There are many legal and ethical considerations that must be handled. Legally speaking, there are two options when a married couple decides that they can no longer live together – a legal separation or a divorce.
When you’re talking to most people, they use the terms “separated” and “divorced” interchangeably, but these two things are not the same. In fact, they are pretty different and it’s important that you understand the distinctions between them.
There are several key differences between the two options. Before you decide on any course of action it is important that you check the laws in your state or residence as family law varies from state to state. Some states do not even allow for a legal separation, although the two spouses can still draw up a legally binding separation agreement on their own, while other states require a legal separation of at least one year before a divorce can be filed for.
A legal separation is a contract drawn up by the courts that allow both parties in a marriage to live separately while still maintaining the rights and responsibilities of marriage. Often it is considered a trial separation, allowing both spouses some room to step away from the anger and fighting of the relationship and cool down before deciding whether they want to remain married or not.
The details of a separation may vary, but here are the basics:
- Spouses agree to live separately but remain married.
- A court order is drawn up defining each parties’ rights and responsibilities, including child custody and if relevant, child and/or spousal support.
- May keep joint property and bank accounts and each spouse may claim a legal right to assets acquired after the separation unless expressly forbidden in court documents.
- The parties are still legally married so they may keep health and other benefits coverage.
- They are still considered next of kin – can still make medical or financial decisions for each other.
- Each spouse still has a legal right to the property or benefits upon the death of the other.
- Each may still be held responsible for the debt of the other.
- They can not remarry.
With a legal separation, this can give you time away from each other without having to go through the whole divorce process. If you and your spouse are going through a very difficult time, this separation can give you some space and a cooling down period. There have been countless marriages that have been fixed, just by taking a time of separation.
Another advantage of separation versus divorce is that you will be able to receive the benefits of your spouse. If you are a stay-at-home mom, and you don’t have a health insurance plan, and you receive your coverage through your spouse’s work, then you would lose that coverage if you were to be divorced. If you’re worried about losing those insurance benefits, then a separation might be a better option for you.
Divorce is the final step in the dissolution of a marriage, whether or not you first had a legal separation. Once the divorce papers have been signed by both parties and delivered to the court the marriage no longer exists.The parties no longer have any legal rights or responsibilities to each other except those expressly set in the divorce decree.
- The marriage is dissolved.
- The former spouses are not responsible for, or to, each other in any way except those agreed upon and filed with the courts.
- The divorce decree is a legal document in all states and all details as far as children and support must be adhered to.
- All joint assets are divided and spouses have no legal right to any property or assets acquired by their former spouse after the divorce.
- In most cases, the former spouses may no longer provide health coverage for the other.
- They are no longer considered next of kin – they have no legal right to make medical or financial decisions for each other.
- They are not responsible for any debt acquired by the other after the divorce.
- They can legally remarry.
Keep in mind that the main difference between a legal separation and a divorce is that a divorce can not be undone. If you are considering leaving your husband, seek the counsel of a family law attorney that is familiar with the domestic laws of your state. Once you know the details, you can make an informed decision about whether a divorce or a legal separation is the right choice for you.
I know that going through the divorce process or the separation process can be confusing and difficult. There are dozens of different factors that you will need to consider and it’s an emotional time that will make everything much more difficult. It’s important that you look at all of your options to decide which one is going to be best for you and your family.
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