Email This Article
Your Name:
Your Email:
Email To:
9 + 3 = ?: (Required) Please type in the correct answer to the math question.

You are sending a link to...
Five Ways to Financially Prepare for Divorce

Financial issues will dominate the discussion of your divorce settlement. Therefore, it makes sense to prepare financially for divorce. You are preparing not only for the actual expenses related to the divorce process, but also for the major financial adjustments that will follow. (For those of you who were looking for ways to hide assets, this is not where you will find it.)

Taking the following financial steps will help you be better prepared, financially, for the divorce process, as well as the outcome. But remember, in spite of all your preparation, there will still be difficult times ahead.

  1. Save money. Forego as many unnecessary expenditures as possible and save funds to pay for your divorce team of professionals:  therapist, financial advisor, and attorney. You will need the assistance of these experts, who help people like you through divorce on a daily basis, just to understand what is happening to you and what to do about it. Divorce is like no other life experience and to try to do without professional help is like trying to take out your own appendix.
  2. Take care of delayed needs. This is going to seem in direct conflict with number 1, and it may be. However, if you have been putting off some non-urgent medical or dental care, I suggest that you get it done before embarking on a process that will likely sap your strength and negatively effect your overall health. In addition, ask yourself why you may have been delaying taking care of yourself. If you have delayed things like home repairs or necessary replacement of a vehicle, better to do it before the divorce while the current household income is fully available. Remember, you and your spouse "wore out" these items during the marriage, so it is appropriate that marital funds are used to restore or replace that value.
  3. Know your finances. However much you think you understand about your household finances, focus on knowing more. You will never know too much. The more you know, the better decisions you will be able to make regarding settlement. Collect all the documents you can:  tax returns, payroll vouchers, bank and investment account statements, retirement plan and account statements, pension information, credit reports, mortgage statements, etc. Think about every dollar that flows into and/or out of your household and get some documentation to substantiate that. This seems ambitious, and it is, but just do the best you can. Your attorney and divorce financial advisor will help you with whatever may be difficult to obtain and/or understand.
  4. Career preparation. Plan on ramping up your career or replacing your current "j.o.b." with a career. Whatever your circumstances, your household income is about to be reduced and you will need to enhance your earning potential. If you require additional education or training, plan on determining the funds needed for that and make it part of your divorce settlement negotiations. Your future financial well-being will depend upon your ability to be financially self-sufficient. A career, with long-term growth potential is clearly different from a job, which may fill a short-term need for limited income.
  5. Pay down debt. Seriously consider paying down any unnecessary credit card debt. If you have the funds in a checking account, or in an easily liquidated reserve, eliminate debt that is considered joint by a creditor because there will be no way to modify the ultimate responsibility for that obligation. It will remain shared in spite of who is assigned responsibility for payment as part of your divorce decree. Know that joint mortgages and vehicle loans will need to be refinanced individually. Determine if it might be easier to pay off the debt completely. In anticipation of closing all jointly held credit cards, prepare by assuring that you have at least two cards in your individual name that will survive the divorce.

Basic preparation for the impact of divorce will ease the financial shock of it all. By following these few simple steps, you will find yourself better able to cope with other unanticipated issues as well as be in a better condition to transition to your new life as a single individual.


Choosing an Attorney

I am often asked for attorney referrals by potential clients embarking on the divorce process. My usual response is that I am better able to make referrals after meeting with you, understanding something about your situation, what you prefer in the way an attorney will represent you, and getting to know you is a limited way. Even after all that, I will provide at least three names of attorneys for you to interview, assess and make your own best decision. An attorney is not a commodity. This is...

Preparing for Divorce

You have decided this divorce needs to happen. Now what do you do? Prepare yourself. The following are some steps to take before you pull the trigger and set things in motion. Take care of deferred needs like dental work, new eye glasses, replace the tires, fix the roof, etc. Money is going to get tight, real soon, so better to know these things are taken care of. On the other hand, you will need to save some cash for the expenses of the divorce process:  hiring professionals like a financial...

Your Financial Advisor's Role in Your Divorce

What assistance can you expect from your current financial planner or advisor during your divorce? The short answer is "None." Your divorce presents a clear ethical dilemma and/or conflict of interest for your current financial professional. They must simply "sit it out," wait for the divorce to be finalized, then resume services, if you wish them to do so.  Whether they realize this, or acknowledge as much, is up to them. However, this message is to help you make more informed decisions regarding...