Planning for Divorce

Preparing for Divorce

Nobody marries with the expectation of failure. Married couples never contemplate that the person they once loved could later seem to be a stranger and perhaps even an enemy. Yet, statistics paint an ugly picture. Approximately five out of 10 marriages today end in divorce. In divorce proceedings, women lose financially, their standard of living may drop as much as thirty percent in the first year following a divorce. Men, may not suffer as great financially, however, they tend to lose precious time with their children.

One of the greatest contributors to divorce is the issue of "control" - either financial or personal. Who controls the bank account? Who sets the social agenda? When one partner to a marriage "controls", the other partner loses their sense of self. A divorce becomes imminent as they controlled partner tries to regain their self-esteem.

In a divorce situation, even the most cooperative of couples may be transformed into warring parties. It that does occur and you are not prepared, you can be sure that you may lose out on contested divorce issues.

Your goal must be to be prepared and be ready to present strong arguments as part of the divorce. This always requires pro-active planning. Below are several simple and logical ways to protect yourself financially if you believe your marriage is in jeopardy:

ONE: Keep Non-Marital Assets Separate

Non-marital assets are not part of the assets divided in a divorce. Instead, they are considered the asset of either the husband or the wife and generally awarded to that person in a divorce proceeding. Categories of non-marital assets include:

property you inherit;
proceeds from personal injury awards (eg. Worker's compensation or accident proceeds);
items owned prior to marriage; and
gifts to one party rather than the family.

If non-marital assets are commingled with assets purchased or improved during the marriage, it may not be possible to claim the asset as yours in the event of divorce. However, some "tracing" of non-marital assets may be possible. For example, if a non-marital asset is sold during the marriage and the proceeds from the sale are used to purchase another asset, it may be possible to "trace" a non-marital interest in the new asset. For example, if a car owned before a marriage is sold during the marriage and the proceeds used to purchase a new vehicle, a party may be able to claim a non-marital interest in the new vehicle. To do so, it is very important to retain all documents demonstrating the sale of the asset and the use of the proceeds realized from the sale.

TWO: Establish Your Own Credit

Make sure your name is listed on all household accounts and investments. Establish at least one credit card in your own name. This will help to create an individual credit history. When you are on your own, you will have a better chance qualifying for loans, mortgages and credit cards. These are all important considerations after a divorce.

THREE: Review Your Financial Holdings Regularly

Maintain complete and separate records of your financial holdings such as bank accounts, IRA's, 401K, land purchases, and stocks. This includes assets in your spouse's name as well. You may wish to maintain copies of these records at your place of employment or in a safety deposit box in your name. Records have a way of disappearing after a divorce has been started.

FOUR : Time Your Divorce

The timing of your divorce may carry with it a significant financial impact. For example, in a single income family, the non-working spouse may not have earned enough money to qualify for Social Security at the age of retirement. However, if spouses are married at least 10 years and don't remarry, the non-earning spouse may qualify for Social Security benefits based on the ex-spouse's earnings when both reach the age of 62.

FIVE: Close Joint Accounts

If a divorce is imminent, you should immediately contact joint-credit-card companies in writing to freeze or cancel your joint accounts. You do not want to be responsible for your spouses' new credit card charges, particularly when those charges may include attorney's fees. This protects your credit. It is important to remember that, although a creditor may freeze a joint account, the outstanding balance must be paid off before the account can be closed.

You may also wish to close your joint bank accounts. If any proceeds are removed, keep a carefully accounting where the money is placed or how the proceeds are spent. You will undoubtedly be asked for that accounting as part of the divorce process. You can save yourself time and money by keeping accurate records.

SIX: Video Tape Assets

You should photograph of videotape the contents of your home including any garages, sheds or out buildings, to record the assets and fixtures contained in each. In any divorce, it is possible that one party may be required to relocate from the family residence. Once you relocate, it may be difficult to recall all of the assets and furnishings that are contained in the house. If you forget them, there is a good chance that they won't be factored into the values that each party receives in the property settlement.

SEVEN: Do Not Leave the Marital Residence.

In a custody case, leaving the marital residence may impair your ability to successfully seek custody of the children or an award of the real estate after the divorce. By relocating, you create a sort of status quo that courts are often reluctant to disturb.

EIGHT: Cancel Joint Credit Cards & Separate Debt.

NINE: Collect Information Related to Children.

In any case that involves children, custody disputes are a distinct possibility. As a result, documents relating to your children may be critical to support your contention regarding medical issues, care during the marriage, or who was the parent providing their primary care. Some items you may wish to obtain or retain include:

Family photographs including those depicting family vacations or the children's extracurricular activities;
Social Security, Student Body, and State ID cards;
Medical records and prescription information including the names and addresses of any treating physicians or counselors for the children or the parties;
Report cards and school records.

TEN: Hire an Experienced Divorce Lawyer

It may be very important to hire a good lawyer early in your divorce planning process. An experienced attorney can help you avoid mistakes that could later cost you in your divorce proceeding. By choosing an attorney early in the process, there is less of a chance that you will be caught off guard and wind up playing catch up on the issues.

There are many lawyers to choose from so it is important that you ask important questions in order to choose one that is knowledgeable and right for you. Ask about their experience in family practice and specifically divorce. Ask the attorney to explain the legal issues as well as the legal process in your particular county

Divorce Articles

Dr. Rena Sommer Divorce Therapist.
Articles on Divorce and Divorce Issues

Before Divorce

Lawyers & Legal Fees

Divorce Process & Laws

Divorce Discovery

Custody & Parenting Issues

Property & Debt Division

Support Issues

Legal Fees

Awarding Legal Fees

HOME