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Top 10 Actions to Take In Preparing For Divorce

By Lynette Musgrave Noll, CDFA

You are thinking of getting a divorce but don't know where to start. You are not alone. Nearly 2.8 million men and women go through the trauma of divorce every year, and most are not prepared for the emotional and financial costs. There are several action steps you can take now to minimize the toll of divorce on your psychological and financial well being.

  1. Stash your cash. Divorce is expensive. Legal fees, therapist bills, court costs, new household expenses and a need for an occasional break from it all adds up to a significant amount of money. Before you file for the divorce, examine the costs and begin to gather the funds necessary to get through this without going into debt or tapping into other savings accounts.

  2. Collect records. Document, document, document. Gather copies of all financial records before you begin the divorce process. It is much easier to get this information when you have access to it than after you have moved out. Though there are laws that require full disclosure of all financial information, you will save time and money if you begin the divorce process with verification of the claims you are making.

  3. Strategically plan. Do not just pack your bags and leave. There are several important time frames to consider. Have you been married just under fifteen years and waiting a few months or a year would qualify you for a portion of your ex's Social Security benefits? Are you in a long-term marriage where spousal support might be affected? Is your spouse due to get a bonus that could be considered community property if you wait a few more months? Consult with legal and financial professionals before you make a move that will have long-term financial impact.

  4. Form your support team. You will need help in getting through this process. Chose your attorney or mediator. If you do not already have one, find a therapist for the emotional support you will need. Talk with your professional financial advisor. Inform your closest friends of what you are going through so that they can be available to help.

  5. Assess your strengths. What are your financial assets? Be clear about all that you have. Don't overlook anything. Safe deposit box, your spouse's hobby income, retirement plans, insurance policies...all must be disclosed and most are subject to negotiation in the division of assets.

  6. Micromanage the process. This is a time when you do not want to overlook anything. Ask questions until you are confident of the answers. When in doubt, keep asking. Listen to the answers your professionals give but take charge of the process.

  7. Keep your eye on the goal. When considering the division of property and determining support amounts, consider your short-term and long-term financial goals and needs. Should you keep the house? Would it be better to hold on to a part of the retirement accounts? What are the tax consequences of your decisions? Financial professionals can project short and long-term outcomes to settlement proposals and make suggested changes that may better suit your needs.

  8. Protect yourself. Close joint credit card accounts as soon as possible. Be clear about your health insurance plan. If receiving support, does your spouse have adequate disability insurance to cover support payments? If domestic violence has been an issue, know the laws and how to protect yourself.

  9. Be prepared. Divorce is a difficult process for all parties involved. Have plans in place for the unexpected challenging times. Who will help the children get through the emotional challenges? What will you do if the divorce lasts for several years? What will you do if you or one of the children gets sick? It would be nice if all other areas of life went smoothly while going through divorce but that is rarely the case. Discuss preparedness plans for times of crises.

  10. Move toward the future. Examine your career or start one. Will it accommodate your goals and dreams? Write out your dreams. Explore and develop your hobbies. Exercise to get or stay in shape. Reconnect with old friends. There is life after divorce. Prepare yourself for a fulfilling and joyful future.