Question: After six years of marriage and one child, I am in the process of leaving my husband for the third – and last – time. I have read every “how to” book on divorce I could find. What are the most important things a person who is about to “fly solo” needs to know?
Answer: Since divorce involves wholesale life changes for husbands, wives, and children, you must first understand that divorce means much more than simply terminating a relationship. Assets will be divided; the amount of money available -- and the amount of your expenses -- will change; you will have more responsibilities; and you will be making decisions alone. Here are some ideas:
1. Establish and focus on both short-term and long-range goals and the effects of divorce because if you don't organize and plan now, important details will slip through the cracks.
2. Separate your emotions from the practical side of “going it alone” because emotions have no place in your decisionmaking process. Be sure you understand your options before you make decisions. To do this, you must be informed.
3. Since decisions made by a divorce court are based on the particular facts of your case, there can be no guarantees. This means you need to know the range of possible results, the strong and weak points of your case, the best and worst result you can anticipate, the probable length of time to complete your case, and the probable cost. Get this information from your lawyer.
4. Think in net figures since your marital estate will be reduced by debts, lawyers' fees, and taxes. The cost of disputes over furniture and personal property may be more expensive than buying new furniture. Be sure you understand your bottom line before you finalize anything. The last thing you need is to find yourself borrowing money to pay taxes or debts you didn't plan for.
5. Before the divorce, check into the status of your credit. Just because both of you use an account does not that mean that both of you have credit ratings and credit histories. Make sure to obtain your own credit history before you divorce. Order your credit report. If there have been credit problems in the past, there are ways in which to reestablish credit, but don't pay exorbitant fees for what you can do yourself.
6. In most states, retirement plans are divisible at divorce. But there are many different kinds of retirement plans and many complex rules. Federal law gives a spouse the right to decide how pension benefits are distributed. Make sure you understand your rights.
7. Make sure you do your health care planning, sign a new will, appoint an agent to handle your financial affairs and make decisions if you become incapacitated or disabled, and change the beneficiaries of insurance policies and IRA’s.
Divorce is much more than terminating a marriage. Whether you are paying or receiving, you will have less assets, less income, and more expenses. With your lawyer, try to predict your financial future today, which is no easy task. Be realistic, be candid, and be prepared.
