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Divorce can be a difficult situation for anyone to face, and it can be especially challenging for children, who perhaps do not understand why their parents are getting divorced, or are confused about their own role in their parents' marriage. Talking with children about divorce is an essential step toward helping them accept the situation, but it can be difficult for many parents to do. Oftentimes, parents put off talking to their kids about their divorce because they are unsure how to approach the topic, but this delay can make a divorce even more difficult for a child or children to move past.
When kids are suddenly facing the divorce of their parents, they may feel like the divorce is their fault, or they could become angry and begin acting out. Such a situation can make a divorce even more difficult to process for both spouses, but talking to your kids strategically and effectively might prevent any confusion or anger.
While talking to your children about your divorce may not seem appealing or may seem beyond your capabilities, just remember that a lot of people have to go through this process and there are ways to make it easier on both yourself and your kids. Some strategies for making this process easier include the following:
ñ Talk to your kids with your spouse – present a united front
ñ Carefully explain the reasons for the divorce, as appropriate
ñ Make it clear that the divorce is not the child's fault
ñ Maintain eye contact and a calm voice and demeanor
ñ Avoid blaming your spouse for anything, and stay positive
ñ Allow plenty of time for kids to ask questions
Each of these strategies can make talking with your kids about your divorce easier, not just for your children, but for you as well. While you may not implement all of these strategies, you can decide which will work best for your situation and use them at your discretion. If you feel like you need additional advice for talking to your children, you may want to consider talking to a divorce lawyer, as these professionals have the experience necessary to advise families in a variety of situations. Remember, every family is different, so talking about your divorce with your kids will be a different experience for you than it would be for someone else.
If either you or your spouse may be thinking about a divorce, the first thing you should do is consult with an attorney who handles divorce matters in your area. Too often I meet with people who have talked to friends or family and been given totally wrong information about one or more issues they will face in the event of a divorce. These sources are great to get advice from in many instances but a possible divorce is not one of them. Friends and family are very important for both emotional and possibly financial support but don’t rely on them for divorce advice.
One of the things I enjoy most about my practice is meeting new people and finding out about how I can help them deal with their particular circumstances. Every person’s situation is unique. A divorce lawyer can advise you regarding your specific circumstances and tell you what you should be doing as well as things you should not be doing to put yourself in the best possible position to either get the best settlement or prepare yourself for a potential trial. This is even more important for people who may not be familiar with the particular facts surrounding their finances or how much income they have. There might be things like specific expenses for children or other reasons to cause you to want to go ahead and file, wait to file or not file at all. If you think you might have to deal with a divorce, go see a lawyer and find out what issues are going to be important in your situation as soon as you can. Without a doubt dealing with a potential divorce is stressful enough. Don’t compound your anxiety by not getting real answers to your questions from a lawyer who knows how to answer them.
Compulsive shopping is a serious affliction that has an effect upon thousands and can lead to serious problems including divorce. Someone recently brought an article to my attention on this subject that can be found at a NBC affiliates’ website. The article states the following interesting facts:
“According to a study in 2006, approximately six percent of the population of the U.S. can be classified as “compulsive” shoppers.
According to research, compulsive shoppers average around $9,000 worth of credit card debt.
According to psychologist Dr. April Benson, who specializes in treatment of compulsive shoppers, many people who spend a great deal of time shopping and making compulsive purchases typically feel “really hollow inside.”
Benson says that compulsive buyers will generally attempt to fill the “hollowness” with material things, which can result in severe consequences.
According to studies, women are not the only ones who can become impulsive shoppers, men are just as likely to succumb to uncontrolled spending.”
I recently helped a client in a divorce in Mobile, Alabama where the husband has incurred an incredible about of debt going gambling at the casino boats. That situation is very similar to what they are describing in this article – compulsive, addictive behavior that escalates over time to the point that it interferes with one’s relationship with their spouse and eventually ends in divorce. In either case, it is a sad conclusion for a behavior that may have started out innocently enough.
I recently came across an article in the internet by Samantha Change, the Executive Editor of theimproper.com. The article discussed the financial hardship that women in particular have as a result of divorce. One of the things that Samantha emphasizes is the importance of women being involved with and informed about the financial affairs of the family. In representing women in Mobile and Baldwin County Alabama where I practice, I too have noticed that often the wives do not know a lot about the financial situation of the family. This is not always the case. But, I do see it quite a bit in my divorce practice.
The main thrust of Samantha’s article is for women to be involved and educated about the money and financial issues in the marriage. Some of the other points she makes are summarized below. Here is a link to the entire article.
According to recent statistics, U.S. divorce rates have decreased in recent years after a peak in the 1970s, but still remain fairly high. In addition to being an emotional breakup, divorce can bring about serious financial issues that can have long-term consequences on the economic stability of a woman.
According to recent studies, a woman’s standard of living decreases at least 30 percent after divorce, which means getting a grip on finances both during and after divorce is crucial for surviving intact.
Don’t Bury Your Head in the Sand
All women-especially divorcées-need to overcome their aversion to money issues, educate themselves and set financial goals. Part of the reason why divorce hits women so hard financially is due to most of them being reliant on their husbands to take care of household financials while married and then becoming shell-shocked having to manage their own situation on their own.
Self-sufficiency is crucial, and these tips can help.
Study Your Finances
According to investment advisor Lisa Fox, women often have no idea what they have financially. She says that during an after a divorce, they should be aware of all investments and read each financial statement, investigating anything they are unsure of. Fox also suggests keeping track of finances by copying all important documents.
Knowing what you have puts you in a better position for negotiation during divorce.
Create a Budget
Draw up a post-divorce budget while in negotiations in order to provide yourself with a snapshot of the type of settlement you’ll need, keeping in mind that downsizing may be required for your lifestyle after divorce.
Money: Not Just a Man’s Issue
Because women tend to live longer, earn less money during their lifetimes, and not be prone to investing, they have different financial needs than men. This makes getting a handle on financial issues is important, and should be done so sooner than later.
Divorce is never easy, but through common sense and financial responsibility, making the transition can be made easier.
According to a report from the Pentagon, the rate of divorce among members of the armed forces held steady in 2007, at 3.3 percent. Considering that marriages can be under considerable stress due to wars in Iraq and Afghanistan, this can be somewhat surprising.
Some veterans have questioned if the figures are accurate, but defense officials have cited recent efforts to support couples enduring long separations and hardships due to the wars.
According to the Associated Press, the divorce rate represents over 25,000 failed marriages among approximately 755,000 active duty troops throughout all branches of the military who are married from a period between October 1, 2006 and October 1, 2007.
According to the Defense Department’s data, the Army, which is the branch with the largest number of troops in Iraq and Afghanistan, had a 3.2 percent rate of divorce, which is unchanged from the previous year. That percentage represents 8,748 divorcees among approximately 275,000 married troops.
Army couples had to deal with extended separations due to tours of duty lasting 15 months instead of 12 months. Longer deployments and multiple tours have taken the blame for stresses on military couples.
The biggest exception to the data is the divorce rate among female troops. Over the past several years, women in the military have had twice as many marriages fail as men. The data did not provide firm numbers, but it appears that in 2007, eight percent of women in the service have divorced and 2.6 percent of men have divorced.
There is no system that can compare this rate to the rate among civilians. According to the Centers for Disease Control and Prevention, the general population’s divorce rate was 3.6 per 1,000 people in 2005, which was the most recent statistics available and the lowest rate since 1970.
According to Todd Bowers of Iraq and Afghanistan Veterans of America, there is a crushing effect on military marriages from the war, producing a rising number of breakups. However, he says, these are not being tracked because they are among people who are no longer in the service.
If you are facing divorce this, you need to take care to protect your credit.
Most people don’t know that court decrees assigning payment responsibilities for joint loans are not honored by lenders. This incorrect assumption of being off the hook for financial obligations can result in payments being missed and your credit score being tarnished for years. However, you can limit your exposure to this type of risk this if your credit is safeguarded before filing for divorce.
If you and your spouse have joint accounts, you should do your best to change them to individual accounts so that splitting up your financial responsibilities will be easier. This may or may not require your spouse’s cooperation. It will depend on how the debt is titled and on the requirements of the creditor. However, these steps can save years of credit woes in the future.
You should begin this process with your credit card accounts. Payments on credit card debt are the most often missed, as opposed to home and vehicle loans. Those loans are the second thing you should work on.
However, refinancing your mortgage and car loans will be more difficult, as banks or mortgage companies will likely require additional transaction costs to refinance the loan. Selling the car or house and splitting the money could be an easier method, which would guarantee a vengeful ex-spouse wouldn’t damage your credit.
Opting out of receiving pre-screened offers for credit or insurance is also advisable, as a former spouse could be tempted to apply for a loan in your name in order to ruin your credit.
Of course, this information is not specific legal advice for your own situation. Rather, it is general information. Before taking any action, you should discuss these issues with your lawyer.
World of Warcraft is a best-selling online role-playing game. It boasts over ten million subscribers; however it has apparently also left an increasing number of real life casualties in its wake, including a woman named Jocelyn.
Though she is not a player, the 28-year-old California native has divorced her husband of six years due to his development of what she describes as a “crippling addiction” to the game.
She claimed that shortly after he would come home from work at 6:00 p.m., he would begin playing until 3:00 a.m. She said that he was even worse on the weekends, when he would play from the morning until the middle of the night.
“I ceased to exist in his life,” she said.
Jocelyn and her ex-husband Peter had been friends since age 13. However, nine months was all it took for the marriage to fall apart.
She said she purchased the game as a Christmas present for him in 2004, when it first came out. They had their first serious discussion about the direction of the marriage in May of 2005. She moved out of the house by September 2005.
She also said her ex-husband failed to perform his domestic duties as well. She says that he was no longer paying his bills, nor doing his part of the housework.
She doesn’t hesitate to say that the game was the main reason the divorce took place and is still emotional about the impact it had on the marriage. She was upset that her husband would ruin his life and his marriage for “a fantasy land.”
This story was originally told at Yahoo Games and can be found at this link. Though it only includes one side of the story, if true, it is sad that a video game could cause the break up of a marriage. It reminds me of the title of a good book, Amusing Ourselves to Death. Or, in this case Amusing Ourselves to Divorce.
In your divorce case, you may hear your lawyer talk about the “discovery process.” Discovery is essentially the legal process by which lawyers can obtain information necessary for your case (such as assets, debts, income, and other factual information). This often will involve written requests to your spouse to produce certain documents, a request for them to file written answers to the lawyer’s written questions (called interrogatories), subpoenas for documents from banks, credit card companies, etc.
Often lawyers will use multiple methods of discovery in an effort to obtain complete information. I have had clients ask me not to pursue discovery for fear of the costs that would be incurred. This is often short sighted. An example from a recent case I had is instructive.
I was representing a wife in a divorce case. The husband had complete control of all of the finances and the wife was not even aware of all of the assets. Through the discovery we sent to the husband he produced a spreadsheet that he claimed were the assets. The wife was surprised at the amount of assets that were disclosed. They were much more than she thought they had. But, the husband showed what he claimed to be the fair market value and the loans owed on them. In all, he showed a net equity of less than $500,000. It was more than the wife suspected, but something told me it was less than it should be. So, we subpoenaed his bank records.
The bank produced documents to us that included the husband’s loan application and the net worth statement that he provided to the bank. And, you’ve probably guessed the punch line – the net worth statement he provided to the bank included assets that he had not disclosed on the financial statement he provided to us, and the values were higher. In all, the difference was that he showed a net worth on the financial statement provided to the bank that was nearly $2.5 million dollars – increasing the marital estate for the divorce judge to divide by about $2 million!
My client now understands it was to her benefit to make sure we did a thorough job of discovery. Obviously this example (though completely true) is not what usually happens – at least not to this degree. But, the lesson is a good one – make sure that your lawyer does a thorough job of discovery. And, make sure that you let him.
I recently came across this article from the USA Today which set out Five Common Financial Mistakes Made in Divorce.
Here is a summary of their points:
1. Trying to keep the house no matter the costs. Many couples scrambling to obtain a divorce settlement wish to keep the house at any cost. However, financial experts say that more attention should be given to who can afford to maintain the property, pay the mortgage, and manage the taxes. While it is possible to ask for spousal support to help make the mortgage payments, unexpected maintenance costs may pop up, and make home ownership more of a liability than a luxury.
2. Failing to get a clean financial break from your former spouse. Clean separation of assets and debts is another difficult task, but one that Howard Dvorkin, the founder of Consolidated Credit Counseling Services says is absolutely necessary, or the consequences can be devastating. Although the task may seem insurmountable, “the alternative is much worse,” says Dvorkin. “Having a spouse drive up your debt when you’re not married anymore” can seriously affect one’s credit score.
3. Depending on your former spouse to comply with financial arrangements. This is also a huge mistake, according to the USA Today article. Although both parties in a divorce are beholden to a court-ordered divorce agreement, creditors do not fall under that arrangement. If your ex spouse is supposed to pay the mortgage, but doesn’t, “the lender is going to sue both of you,” remarks Melissa Avery, an Indianapolis family law attorney. This holds true in Alabama divorces as well; if your ex fails to pay the mortgage, you may be hurt when applying for future loans.
4. Not reviewing your estate plan after a divorce. Wills and trusts can also be seriously impacted by divorce proceedings. If divorced spouses wait unnecessarily long to change a beneficiary on a will, for example, the money may go to the wrong person-your new spouse may get nothing, while your ex spouse inherits the amount provided for in your will.
5. Not understanding the different tax treatment of alimony vs. child support. Finally, never forget which amount of money in your divorce settlement is alimony, and which amount is child support. Whereas child support payments are not taxable to the recipient, alimony payments are. Furthermore, there are limits to how long a person can receive such payments-child support payments can no longer be received once the child turns 18 or is done with college, while spousal support generally ends once the recipient remarries.
Whenever you are going through divorce, it is important to maintain secure lines of communication with your lawyer. This is especially important in the early stages of representation, when you may not want to tip your hand to your spouse that the divorce is imminent.
Houston divorce lawyer, Shannon Cavers, recently posted an informative article on this subject here. Like Shannon, at the initial consultation we ask our clients for a spouse safe e-mail and mailing address. It is so simple to open a yahoo or hotmail e-mail account for free, that you should consider opening one for this purpose. In doing so, make sure that you use a password that they will not guess and that is unique to this account.
I recently found this article at the Georgia Family Law Blog. Its an insightful look at divorce from the perspective of a seasoned divorce lawyer. Here it is in its entirety:
1. What behavior of clients still surprises you?
That couples who did not get along during their marriage expect a divorce judge to suddenly make them cooperate with each other.
2. What determines how fast a divorce can be obtained?
The psychological point the parties are at. Some are ready to end it, get on with their life. Others use the process as a catharsis to re-live their entire marriage, vent their frustration and assert blame.
3. What is the best advice to give to a non-custodial parent?
Be polite and kind to the custodial parent. They control access to your children. Regardless of your visitation, the custodial parent has tremendous control. You may be rude behind their back but never to their face. It’s a game you need to learn to play well or you could lose something greater than your pride.
4. What is the best advice to give a custodial parent?
Let your ex have the children as much as they will take them. You need a break. They are the perfect babysitter. You know they will take care of them and if they are around the children alot, they will be more sensitive to their needs.
5. Does joint custody work?
It can. Some people are naturals at it; others need a little help. A child psychologist can help those who don’t realize they have damaging behavior. Putting the child in the middle and parental alienation are classic problems in joint custody.
6. What is the worst fear of most women?
That their spouse will fight them for custody.
7. Do most men fight for custody?
There are two categories of those who do: Men who honestly want custody. Men who want to scare their wives into accepting less child support provided they later relinquish the fight.
8. How can you tell the difference?
From the obvious. Those who never spend any time with their children prior to the divorce being filed; those who travel and are never home; those who have girlfriends. These guys don’t want custody.
9. Any way to control those who are insincere?
For the ones who are just using custody as a fear factor, you should call their bluff. Offer them custody and watch them run.
10. Does guilt play a part in the outcome of a divorce?
Yes. Usually the party that seeks the divorce is willing to take less. Men who want the divorce and have children are willing to pay more support and often give up the house to the wife and children.
11. Does mediation work?
If you have an experienced mediator, you can usually resolve some of the issues. The mediator’s experience should match the sophistication of the parties.
12. As an attorney, what do you learn from the mediation even if the divorce doesn’t settle?
It’s a great way to evaluate opposing counsel and their client. Most clients and attorneys reveal the strength of their case at mediation because they are trying to influence the mediator. It’s a great way to find out everything that is going to be presented against you at trial. It is also a good way to find out what the opposing counsel knows about your client.
13. As an attorney, can you influence a mediator?
Usually, but you should do this when you are alone with your client and the mediator. You can ask the mediator to present issues a certain way. They will hold any information confidential that you ask them to. You can explore all types of settlement offers to find the give and take.
14. Is it advisable for the attorney to be aggressive at mediation?
I think you should save your best arguments and evidence for the Judge. Their opinions are the only ones that matter. If the opposing side hears damaging evidence prior to the trial, you can bet they will have a good prepared response when they hear it at trial.
15. Does the personality of the parties influence the Judge?
Yes. I like to find out what question I need to ask to make their spouse mad and that is the first one I ask.
16. How do you prepare your client for trial?
I prepare and go over their questions and answers in advance. That way they know at least 50% of what is going to happen.
17. What is the best advice you can give your client in the courtroom?
The judge determines everything. Although the judge doesn’t ask the questions, you should look at the judge when you answer. It is his courtroom. Get him involved. Read the situation. If he looks bored or disinterested, make your answers short. Be respectful. Don’t argue with the opposing attorney and never, never argue with the judge.
18. What practical considerations should a party consider when testifying?
The judge makes a decision based on a very limited view of the situation. In doing so, perception becomes reality. If one witness is better organized, more articulate, the judge can understand their testimony. For someone to make a decision, they have to be able to understand the facts. Unorganized testimony is difficult to follow. Also. perception gives credibility. Witnesses who are neat and clean and speak in an even tone without anger or bitterness are received as more truthful. Arrogance is a certain loser. Create advantages. If no one believes you, your evidence and testimony loses its importance.
19. Can you tell us if there are any tactics opposing counsel use that in your opinion have been unnecessary?
When they refuse to concede they are wrong and force the issue before the judge. These include filing a petition in the wrong county; asking for the non-custodial parent to pay for college when the law does not provide that they have to; denying their client had an affair when the client has had a child with their girlfriend/boyfriend; asking for support which exceeds the non-custodial parent’s income; demanding personal property for their client which was the pre-marital property of the opposing party; asking for half of spouse’s retirement when 75% was accumulated prior to the marriage; demanding visitation with their spouse’s children by a prior relationship. The list can be endless.
CLOSING THOUGHTS: I am assisting people at a very difficult time in their life when they are called upon to make major decisions when they are not emotionally prepared to make them. I try to give them a sense of control over a situation that appears out of control. I try and give them feedback on how their behavior will be perceived to the Court and suggest directions which reflects more favorably on them. I strive to narrow the issues to the best settlement possible so they can determine if it’s a settlement they can live with or whether they would rather take their chances with the decision of the Judge. Often times, a Judge will be more fair than the person you have been married to.
ORIGINAL SOURCE: DivorceNet
The Oklahoma Family Law Blog recently wrote an article in honor of father’s day that contained some Must Read Books for Divorced Dads. With a tip of the hat to Dan Nunley, the author of the article, here they are:
Following are four recommended books for fathers dealing with the difficult issues of divorce. Whether you’re in the initial stages of divorce, dealing with the immediate aftermath or well past one, these books will provide down-to-earth ideas and strategies you can use to remain an integral of your children’s lives.
Always Dad: Being a Great Father During & After Divorce by Paul Mandelstein, a divorced father of three and founder of the Father Resource Network.
More and more, divorced fathers are finding out that, rather than being one half of a “broken” home, they can continue to play a crucial role in their children’s lives. You can, too. Turn to Always Dad and discover how to work with your ex to create a fulfilling extended family, one that can help ensure that your kids grow up in an enriching, loving environment.
Live-Away Dads: Staying a Part of Your Children’s Lives When They Aren’t a Part of Your Home by William C. Klatte, a psychotherapist, social worker, and divorced father of two grown daughters who lived with their mother. Klatte begins by advising fathers to take care of themselves, including dealing with anger and depression, good advice for anyone coping with a major life change. He stresses the importance of staying involved with your children despite personal difficulties or the challenges of working with their mother. Later sections deal with cooperation, using the court system, developing parenting skills, and finding support groups.
The Divorced Dad’s Survival Book: How to Stay Connected With Your Kids by David Knox, a divorced father of two. With hands-on “get you through it” plans to help fathers remain positive, involved parents, and personal stories from a variety of home fronts, this invaluable guide illustrates how men can best develop their fathering skills, stay involved with their children, and honestly evaluate their own capabilities as fathers and ex-spouses.
I’ve just discovered Stephen Worrall’s Georgia Family Law Blog. Its a very good blog with a lot of great content, and its not all specific to the state of Georgia, so check it out.
Here is a post he recently made where he found a nice Divorce Checklist which contains a general list of issues that should be considered in resolving a divorce. The list includes:
1. Custodial arrangements for the children
2. Visitation/parenting time
3. Child support
4. Medical, dental, hospital, pharmaceutical, and psychological expenses for the children
5. COBRA or medical insurance for a former spouse for up to 3 years from the entry of the divorce judgement where applicable
6. Income tax exemptions regarding the children — who will claim them
7. Alimony/spousal support
8. Property division
9. Division of real estate, transfers, and deeds
10. Making sure that all investments are covered including limited partnerships, stocks, bonds, and savings
11. The handling of debts
12. Pensions, IRA accounts, 401K transfers, Qualified Domestic Relations Orders
13. Personal property including furniture, furnishings, art, and collectibles
14. Motor vehicles, including trailers and boats
15. Income taxes whether there can be joint filings and liabilities for payment of taxes
16. Bankruptcy issues, protection in case one spouse does go bankrupt
17. Proper security and protection regarding property division
18. Clauses to hold the other spouse harmless and indemnification in case someone fails to live up to his or her obligations
19. How to handle the discovery of hidden assets
20. Spouse abuse and restraining orders
21. Restoration of a prior maiden name
22. Life insurance policies as protection for child support payments, alimony/spousal support payments, and/or property payments in the event of death
23. Attorney fees and/or mediator, accountant, and other expert fees and payment of same
24. College education for children and/or spouse
25. Provisions for review in certain circumstances such as with regard to child support and/or spousal support.
26. Clauses such as payment for summer camps and/or religious training and/or upbringing or other special situations involving children
Today we will deviate from our normal protocol of posting practical divorce and family law information and instead report on a news story related to a recent divorce in Chicago.
The rather crass title of this post is the actual bumper sticker of a local divorce lawyer. But, in this story, the husband’s divorce wasn’t twenty grand – it was $184 million! It is reportedly the highest divorce award in history.
It reminds me of a New Yorker cartoon I once saw. In it a lawyer sits across from his female divorce client and tells her, “Some people say you can’t put a price on a wife’s 27 years of loyalty and devotion. They are wrong.” In this case, it was a high price indeed.
This post will be the first in a series that addresses the steps to take when it becomes apparent that a divorce may be imminent. Understand that I am not encouraging divorce. I am, however, encouraging you to protect your interests and make prudent preparations if a divorce is going to take place.
Step 1: Find a Wise Guide
An experienced divorce lawyer I know is fond of telling his clients that you don’t need a lawyer to get a divorce, but you need them for the consequences of your divorce. He is right. You can likely get a divorce by finding some forms on the internet or hiring a lawyer that advertises for cheap uncontested divorces. If you have no children, a marriage of only a year or two in duration, no assets or debts have been accumulated during the marriage, and you and your spouse agree on everything, then you probably don’t need a divorce specialist.
Look for a lawyer that has at least 5-10 years experience practicing primarily divorce and family law. Find out the lawyer’s philosophy regarding litigating cases versus settling them. My personal opinion is that you should want a lawyer who makes it a priority to attempt to acheive a fair settlement for you, but who is capable and willing to litigate the case before a judge.
Step 2: Make an accounting of the family finances
The next thing you will want to do is to gather as much information as you can in order to get a clear picture of your family’s financial situation. You may already have a firm handle on this, if you are the one that takes care of the finances in your home. On the other hand, you may have no idea what you and your spouse own or owe.
One of the primary functions of the divorce process is to make a division of the assets and debts of the marriage. In order to get a fair division, you must know what there is to divide.
This is a three step process:
A. Determine what you own.
B. Determine what you owe.
C. Determine income (both yours and your spouses).
I will cover each of these in more detail in subsequent, separate posts.
Step 2A – Determine what you own
We are on Step 2 in our series regarding preparing for divorce. Step 2 involves making an accounting of the family finances. This includes determining what you own.
For some, that may be easy. If you have a good handle on the family finances, then you are a step ahead. If not, then it is time to do your homework.
Many of the assets of the marriage will be obvious – the home in which you reside, financial accounts, vehicles, recreational vehicles, etc. Others may not be so obvious – these include things like artwork, bearer bonds, a spouses deferred compensation, proceeds from a pending lawsuit, etc.
Then there is the possibility that your spouse is hiding assets (this is more likely if they are the ones initiating the divorce or if divorce has been discussed previously).
Review all possible assets. Attempt to gather documentation regardign each one including present value, where possible. Especially look for any recent appraisals of real estate.
If your lawyer is charging you hourly, then any of this information that you are able to gather should save you a lot of money. If there are documents you are not able to obtain, your lawyer may have to get them through the discovery process.
Step 2B – Determine what you owe
We are still on Step 2 of Preparing for a Divorce. Step 2 is “make an accounting of the family finances.” We’ve discussed determining what you own. This step requires you to determine what you owe.
You will need to make a determination of all of the debts of the marriage without respect to the name in which it was incurred.The Judgment of Divorce will need to address who is responsible for the debt whether it is in your name, your spouse’s name, or joint names.
I recommend that each of my clients obtain a copy of their credit report. This allows you to make sure that you know of all of the debt that is in your name. It is not unusual for a spouse to have incurred debt in the other spouse’s name without their knowledge. If that has happened, you need to know it before the divorce is final, not after.
There are many ways to obtain a copy of your credit report. You can request a free copy once per year at www.annualcreditreport.com.
Once you see what all debt exists, obtain copies of the statements on these accounts to determine the balances. You may also need the statements if your spouse has made large or inappropriate purchases on the cards.
If you cannot find credit card statements on each of the accounts, contact the credit card company directly and request they send them to you. You may want to check their websites as you might be able to make the request online. I normally want my clients to get a minimum of 12 months worth. Check with your lawyer to see what he recommends.
Step 2C – Determine Income (yours and your spouses)
Your lawyer will need documentation showing your income (if you work outside the home) and the income of your spouse. This is important for a number of reasons, but primarily for child and spousal support.
If your spouse is a salaried employee then your job is easy. Obtain a copy of the most recent pay stub and the most recent Income Tax Return. If you do not have access to either of these, you can obtain a copy of the Income Tax Return by requesting it from the IRS.
Complete Form 4506, Request for Copy of Tax Return and mail it to the IRS address in the instructions along with a $39 fee for each tax year requested. Copies are generally available for returns filed in the current and past 6 years. You can download the form at www.irs.gov.
If your spouse is self employed, then the job of determining their income becomes much more difficult. This is why discretion about your divorce plans is important. You may want to discreetly question your spouse (or if he has one, his business partner or his partner’s spouse) about income. You can attempt to get copies of bank account statements and financial statements of the business.
Another good way to prove income and assets of a self employed spouse is to obtain a copy of a loan application or net worth statement that they may have submitted to a bank or other lending institution for a loan.
Sometimes it is difficult to prove the actual income of a self employed spouse. At this point, gather the information you can. In the case of a self employed spouse, your lawyer will likely have to help you by using the discovery process to obtain and analyze additional information.
Preparing for Divorce: Step 3 – Make photocopies of all the financial records
Continuing our series on practical steps to take when it becomes obvious that divorce is imminent, we are now on to step 3. Step 3 is simple, but important.
Step 3 is to make photocopies of all of the pertinent financial documents.
As you gather the important financial documents, you should make two copies of each of them. One is for you and one if for your lawyer. Keep your copy in your divorce notebook or file folder. It is important to keep a list of what documents you have, what documents you still need, and which of them you have given to your lawyer.
Each case and each lawyer may require a unique set of documents. But, some of the common ones will include at least the following basic ones:
Preparing for Divorce: Step 4 – Prepare a budget (or two)
The next step in preparing for divorce is to make two budgets (one that shows the situation in the house before the divorce filing, and one that is your estimated budget for after the divorce).
Most folks don’t like to prepare one monthly budget, so I know I’m asking a lot to suggest that it is helpful two prepare two of them. There is a method to the madness though. It is important to know what it costs to run your household currently. Equally important is to have an understanding of what your costs of living will be after the divorce. Let’s take each in turn.
A. Know your current monthly budget
Knowing the monthly budget is important for the following:
B. Make an estimated budget of post-divorce expenses.
This is important for your personal planning and will likley influence your objectives in the divorce negotiations. You need to know what you will need financially in order to evaluate your settlement options or what you will ask the judge for in a trial.
This will undoubtedly take some estimating on your part. But, that is why it is called an estimated budget. It will be a work in progress. The point is to give some forethought to what your living expenses will be as you start the new chapter in your life.
C. How to make your monthly budgets.
If you already maintain your checking account records on a software program like Quicken then the process is easy. You can simply print out a monthly budget report. If you don’t then you will need to sit down and look through your check register and/or your spouse’s check register for the past three months. This will reveal the expenses you may monthly and quarterly (divide the quarterly expenses by three and enter them in the budget as a monthly expense).
You will then want to think about any annual or semi-annual expenses you may have such as for life insurance, homeowner’s insurance, etc. and convert those to a monthly figure and enter it on the budgets also.
In setting out your budget, try to be as realistic as possible. You should be conservative in your budget (meaning don’t understate the expenses and end up stating a budget that doesn’t realistically meet your needs) without grossly overstating the budget (which a judge would frown on should the case go to court). It is admittedly a fine line. The best advice is to base it on as real numbers as possible.
Divorce Preparation: Step 5 – Document & Safeguard Personal Property
The fifth step in our series on preparing for divorce: Document and Safeguard Personal Property.
Inventory and photograph your household furniture, art, jewelry and other items of value. Inventory and photograph the contents of any safe deposit box or family safe your family may own. Also, photocopy any important documents in the safe or safe deposit box (if you did not already do so when collecting the financial records).
It is unfortunate, but often these documents and property will “disappear” once the divorce process starts so get your proof in place now.
Additionally, you may want to consider safeguarding any items of particular value (either monetary or sentimental) which are small in size. I am referring primarily to things like the jewelry your mother passed down to you, your father’s fountain pen, your high school year book, your childhood photo albums, etc. Your spouse may not share your desire to divorce with dignity. Better to safeguard those items that are particularly difficult to replace.
Note that I am not suggesting you empty the house of its contents. That is a sure way to escalate the divorce and guarantee that you will not have a civilized divorce. Things like dvd players, camcorders and laptops can be replaced. Just document those on your inventory and photograph them for proof in the event it is ever needed.
Divorce Preparation: Step 6 – Establish your own credit
We are now on to the sixth step in our series on preparing for divorce. The sixth step is: Make sure you have your own credit established.
If you do not have your own credit history, you should begin the process of establishing it now. Obtain a gas card and a credit card. You will need to have your own credit established after the divorce. And, the sooner you begin the process the better. So, don’t wait until after the divorce. You can start this immediately.
Once you’ve obtained the accounts, you can imrpove your credit by using the cards and then paying them off each month. At this point, it is important that you use these cards only to the degree that you can pay them off each month. Your goal is to establish a favorable credit history, not to run up a bunch of debt.
Divorce Preparation: Step 7 – Assess the Financial Accounts
We continue with our series on steps to take when divorce is imminent. We are on to Step 7 which is Assess the Financial Accounts.
If you’ve completed the prior steps in this series, then you already know what accounts exist and what the balances are. You need to make a decision about what to do with them.
It is an unfortunate reality that one of the first things that some spouses do when they learn/decide a divorce is imminent is to raid the accounts. This is typically done after receiving particularly bad advice from an adversarial lawyer or a well meaning, but poorly informed friend.
In a perfect world neither party would touch the financial accounts except to pay normal household bills until after the divorce is over. However, if this was a perfect world, you would not be reading this blog, and I would be in another line of work because divorce lawyers would be unnecessary.
That being said I do not recommend that you clean out the accounts. Doing so immediately escalates the conflict and stress of divorce. It also will not be well received by the divorce judge.
So, you don’t want to clean out the accounts, but you want to be protected from your spouse cleaning them out. If you have a reasonable fear that your spouse will raid the accounts, the only reasonable solution that I know is to remove one half of the funds from the accounts and put them in a new account in your own name. Do not hide, dispose, or waste the money. Document carefully where every penny is spent because you will likely need to make an accounting of it later in negotiations or at trial. Additionally, you should not do this for the regular checking account out of which the household expenses are paid unless there is a substantial balance in the account over and above the amount needed for paying the current month’s bills. You do not want to take action that would cause checks to bounce.
I don’t make this as a blanket suggestion. If the money can be kept there and neither party remove it, that is preferred. Another option for certain types of accounts is to put a freeze on the account. Obviously that is only practical for accounts that are not regularly needed to pay bills and regular expenses.
Before you decide how to handle your financial accounts, consult with your lawyer. If they are suggesting you go take all of the money out without a good reason, I would seriously reevaluate the whether that lawyer shares your desire for a civilized divorce.