Even if you are not quite ready to get divorced, you need to be informed and financially prepared.
A wonderful stable marriage is usually the stepping stone to creating family wealth. Divorce, on the other hand, is the opposite. It’s often expensive. There is a division of assets, property and possessions acquired during the marriage. Many spouses may need an increase in income to maintain their standard of living established during the marriage.
Deciding to divorce is a complex process. Knowing how easy or difficult the divorce process will be financially depends on you and how your spouse prepare.
Women generally suffer more financially then men when divorce occurs, although in recent years this has changed. But preparation is key for anybody’s movement towards divorce.
Divorce can affect children financially too. The financial burdens of divorce can affect the amount of time a parent gets to spend with a child (they may need to work longer hours), there may be a change in education opportunity like going to college or not (due to divorce the family can’t afford to pay for college), and fewer extracurricular activities, like dance class or going to camp.
So with all these financial considerations, the better prepared you are financially will in part dictate how smooth or turbulent the financial outcome of divorce will be on you and your family.
So for the best financial and emotional outcome as a divorce attorney/mediator with over 35 years experience, I recommend the following:
Consult With an Attorney and a Mediator or an Attorney Who Is Also a mediator
It's a good idea to consult with an attorney, especially if you have children or assets. Choose the right person for you – someone who represents who you are and your divorce style. If you don’t have easy access to the family funds, start putting some money aside so you can afford to pay an upfront retainer, which is almost always required. It is best not to navigate a divorce on your own.
Ask lots of questions. Choose the attorney or mediator who will listen and pay attention to your wants and needs. Speak with someone before you are ready to do anything so you don’t make some common mistakes. Remember, for money saving purposes consider mediation. This highly successful process can save you money, time and unnecessary pain!
Make Copies
Photocopy every important, relevant financial document you can get your hands on. I would say go back and make copies of documents for the last three years of your marriage. This should include tax returns, bank account statements, pension, stock, portfolio statements, credit card statements and pay stubs to supply your lawyer or mediator.
Avoid Damaging Credit Problems
If you are using a joint credit card, you are still responsible for any charges made by your spouse. If charges are not paid, those defaults can end up on your credit report. Establish credit cards and accounts in your own name to build and protect your credit.
Make Sure You Have Medical Coverage
Medical insurance coverage usually ends at divorce. If you are on your spouse's insurance plan, you should be able to continue coverage for up to 18 or 36 months under COBRA. Under this plan someone has to pay the premiums. These premiums can be very expensive so you may want to consider shopping around for different coverage. Today there are insurance carriers with lower premiums than offered by COBRA.
Take Home and Asset Inventory
Know what you have! Write down your assets, debts, and what is in your home. It's helpful to compile lists. The more information you have, the better. Your attorney or mediator will thank you. You may want to consider taking photos or videos of your home contents. This may help in the division of personal property. You may want to make copies of family photos and CDs. You would be surprised how the division of these items can sometimes cause arguments and stress.
Divorce Has Tax Consequences
There are important tax ramifications with real estate, deferred compensation, retirement plans and other assets. In fairly dividing the assets, you must consider the tax consequences before the division. Consult with your accountant to discuss the tax ramifications of your possible asset allocation.
Fully Understand the Assets You Choose
When you are choosing which assets you want, choose carefully. If you want the house, educate yourself about the fair market value. Keep in mind you have to make mortgage payments, pay taxes, interest, insurance, utilities etc. Will you be able to afford this once the divorce takes place? Pensions are usually taxable when you take out the funds. Fully understand your financial picture! Choose your assets wisely!
Stay in Your Home
Don’t move out of your home before or during your divorce! Unless you fear physical or emotional harm, don’t move out of your home. Talk to your lawyer or mediator before you make your move. Leaving the marital residence can have major ramifications.
Consider Different Professionals to Help You
In some cases you will need experts such as an accountant, financial advisor, appraiser, or therapist. As a seasoned divorce attorney/mediator, I have developed an extraordinary team of professionals who work with my clients so they are informed and protected throughout their divorce journey.
Divorce can take its toll on you emotionally, financially and legally. Being prepared will give you the tools and the strength to make better decisions.
With over 35 years of legal experience and my medical training, I can uniquely guide you towards a happier and financially healthier life. Even if you are not quite ready or afraid to take this step towards divorce, call me. I will answer all your questions and help you to take your first step!
All our FREE 1 HOUR CONSULTATIONS are still available virtually.
I look forward to speaking with you!
Warm regards,
Lois
Let New York Divorce Lawyer Lois Brenner answer all your financial questions if thinking about divorce.
To help ease your financial concerns Lois Brenner is offering a FREE 1 hour consultation.
Call now to schedule your appointment.
212.734.1551.