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.