If you are in the midst of a divorce, or if you are contemplating a divorce, you are probably aware that this process means far more than simply the legal dissolution of your marriage. It also means choosing to enter into the complex and often difficult process of untangling two lives that have become intertwined, often over many years. One of the most difficult aspects of doing so, aside, of course from issues involving your children, is determining the best financial path forward for both of you.
The truth of the matter is that divorce can be expensive. It is likely, the process of dividing up all of your property, assets, and debts that both parties will have to compromise to some degree to reach a result that is satisfying to everyone. That’s simply the reality of the situation. The good news though, is that each party can take steps during the divorce process to be financially savvy, and to try to minimize the long-term financial impact of your divorce as much as possible. With that in mind, we offer these helpful tips:
- Be prepared for the unexpected: One thing that often takes people by surprise during a divorce is the fact that it often causes people to act in very unexpected and uncharacteristic ways. You may never expect your spouse to be the kind of person to intentionally destroy or hide important records, and chances are that you’re probably right. Sometimes, however, people surprise one another – sometimes, strong emotions cause people to act in unusual ways. It is not unheard of for one spouse to intentionally seek to harm the other by draining joint back accounts, destroying records, failing to pay bills, or running up credit card accounts, just to name a few possibilities of many. While this will hopefully not be the case in your situation, to be on the safe side, it is wise to place copies of bank and other financial statements, paystubs, tax forms like 1099s, W-2s, credit card statements, titles, deeds, and other important documents in safe place that only you have access to. It is also wise to give copies to your attorney as an extra precaution. Make sure you have access to enough cash in an account or other safe place that your spouse can’t access. Close any joint credit cards with a zero balance that you can, and check your account statements and credit report frequently for any suspicious activity. Certainly, the hope is that none of these worries will become a reality, but it is ultimately always better to be safe than sorry.
- Retain a qualified attorney: One mistake that people often make as they contemplate divorce is to assume that they will save money by going the “do-it-yourself” route. This is an understandable assumption, but it is an incorrect one. Ultimately, the law is far more complex than most people realize. This is the reason why attorneys are required to spend several years in school to obtain a law degree, and then pass a bar exam before being allowed to practice. If you aren’t experienced in the practice of law and professionally trained to do so, you can miss important legal nuances that will make a world of difference in your case. It is highly possible that you may end up spending far more money to fix costly mistakes that you make in your case than you would if you simply hired an attorney in the first place. Don’t make this mistake.
- Envision your long-term goals: During the tumultuous time that is divorce, it can be easy to find yourself so fixated on getting through the short-term that you forget to focus on the long-term as well. Focusing on the long-term is important, however, and should not be overlooked. Take an honest look at your overall financial picture – your budget, your assets, your debts, and your monthly expenditures. It can be helpful to meet with a financial advisor, if possible, to make a long-term plan for your visions and goals, and how to budget and plan accordingly to reach them. In doing so, you will be able to have the peace of mind in knowing that despite the difficulty of divorce, you can still work toward your long-term financial goals, knowing that you have a solid plan in place to do so.
- Retitle your assets and change beneficiaries when possible: Depending upon the laws of your particular state and the requirements of whatever support obligations you agree to or a court determines in your divorce decree, you may or may not be able to remove your spouse as a beneficiary on all of your accounts and investments. It is wise to talk these issues through with your attorney and a financial advisor if necessary to determine what accounts and assets you can retitle. It is also a wise decision to make an appointment to update your estate documents including your power of attorney, health care directives, your will, and any trust documents you may have as well.
- Maintain a realistic outlook: As you consider what matters are important to you and truly worth arguing over during your divorce, it is important be realistic about the likely outcome of those battles. For the most part, courts seek to divide property as fairly and equally as possible between the parties, with some exceptions depending upon circumstances. By and large, however, it is important to realize that it is unlikely that you will receive more than half of the marital assets in your divorce. As a result, it is not a good use of your money or your time to pay an attorney for countless billable hours spent arguing for something that you are ultimately unlikely to receive. The same is true of all other issues in your divorce too – battle over those things that are truly important if you have to, but don’t spend extra money simply to be antagonistic. It doesn’t pay off for anyone in the long run. Spinning your wheels and driving up the costs of your divorce unnecessarily simply isn’t worth it.
- Consider alternatives to traditional litigation: Gone are the days where every divorce was litigated in a traditional way in a courtroom before a judge. Today, there are any number of legal options available to divorcing couples that encourage a more peaceful and more personally involved settlement of your issues. Two excellent examples of this are mediation and collaborative law. Both methods allow couples to work cooperatively toward resolving their issues outside of the courtroom. Attorneys who are experienced in utilizing these strategies can help couples think through their issues, and work toward a settlement agreement that is beneficial and satisfactory to both parties, without having to have a judge make the determination for them. In addition to being less stressful, these methods are often far less costly than traditional litigation. When you choose one of these methods, you may the choice to work cooperatively, instead of antagonistically. Instead of paying for an excessive number of billable hours for your attorney to “battle it out” with your spouse’s attorney in court, you are paying your attorneys to help you and your spouse avoid the stress and cost of endless argument and work together toward a faster and more satisfactory resolution for everyone involved.
No matter what, divorce is difficult – and rarely is it inexpensive. It’s important to be realistic about these truths prior to beginning this process. It’s also important to realize, though, that there are steps you can take to financially protect yourself and plan for your future. Don’t hesitate to take them, and to reach out for the professional help of attorneys and financial advisors when needed. At The Law Office of Dustin McCrary, we would welcome the opportunity to learn your story, and talk about how we might be able to help. Call us today – you’ll be glad you did.