Preparing for Divorce: Finances, Kids, and Protecting Your Interests

There comes a point when you must admit your marriage is over.  You’ve tried everything from marriage counseling, personal therapy, and maybe even living apart.

But before you take the plunge, the best attorneys advise that you will fare much better if you prepare. It may seem heartless, but if you plan on getting divorced, or if you think your spouse may want one from you, there are some matters you should take care of first.  Addressing these issues before your partner even realizes you are ready to get divorced and you will be ahead of the game during the legal negotiations that will occur sooner than you think.

We know that the notion of a pending divorce”“even one not yet broached with your spouse”“can send you into a tailspin. The mere thought of getting divorced can cause a range of emotions, including relief, fear, disappointment, excitement, and dread.  But no matter what you feel, you must push these emotions aside and take some practical and strategic steps before anyone else gets the ball rolling:

1. Hire a lawyer that practices in the Denver Metro area.  Unless you have been married for only a short time, or you have no property or children, hire a lawyer. Even if you and your spouse have “worked everything out,” or have chosen a mediator, your personal family attorney may tell you about rights you did not know you had.  Remember, you do not need an F. Lee Bailey, but you should find someone who has handled divorces before, someone you can afford, and someone with whom you feel comfortable. Word of mouth is usually a good way to locate attorneys, but do not go by recommendations alone. Meet a few lawyers before making up your mind. This will help you learn about the differences in legal style between lawyers and help you find one that is good for you.

2. Learn your spouse’s annual income. Do they have a salaried position, or is paid by the hour, the information should be on a recent pay stub. If you cannot get one, last year’s tax return should help.  If your spouse is self-employed, a tax return may not tell you the full story.  Do a little detective work. Does your spouse have a partner? Are you friendly with the partner’s spouse? They may know about the business and be willing to share what they know about it.  Is someone else in the partnership divorced? That partner’s former spouse might be willing and able to help you.

3. Realistically assess what you can earn. Have you been out of the job market for a while? Perhaps you need some time to get your skills up to speed before taking the plunge. Has business been off lately? Keep a record of that now, so no one later accuses you of deliberately reducing your income to negotiate a more favorable settlement.

4. Learn everything there is to know about your family’s financial assets and liabilities.  You will only be able to share in assets you know about, so you must find out exactly what the two of you have. For most, that’s probably easy. There’s a house (owned by the bank), a car (still owned by the dealer), a pension (not yet vested), and a little bit of savings. But for some, property ownership is more complicated. In some cases, one spouse’s business is a marital asset to be valued, and a judge can distribute its value. The same may go for a ski house or condominium, even if inherited during the marriage.

5. Realistically assess your family’s debt. Often, the allocation of debt is harder to prove or negotiate than the division of assets. What debts do you have? Credit card, personal loans, bank loans, car loans? How much does it cost to pay these debts each month?

6. Make photocopies of every family financial record you can find. Canceled checks, bank statements, tax returns, life insurance polices”“if it is there, copy it.  You may never need this information, but if you do, it is good to have.

7. Make a list of your family’s valuables. Inventory your safety deposit box or family safe and take photographs of the contents. Do the same with jewelry or any furniture, paintings, or other items of value. You needn’t list every worn out piece of furniture, but anything with a value of more than $250, or that has value to you, or your spouse, should be included.

8. Learn how much it costs to run your household now. Whether you plan to stay in the home or leave, unless you know what the monthly costs are, you will not be able to determine how much money you need. If you’re the one who pays the monthly bills, your job is easy. If you are not, look through a checkbook to find the expenses”“how much is the monthly rent or mortgage; utilities, including electricity, heat, and phone; and maintenance costs such as snow removal, yard care, and annual maintenance for the house.  One woman we know, a well-educated profession, who had a full-time career, did not know the first thing about the family’s monthly expenses because her husband’s business secretary made out the checks and paid the bills from the office. She was embarrassed to confess her “ignorance,” but she is not alone.

9. Determine where you will live following separation. If you’re the spouse who plans to move out, decide where you are going to live and figure out how much it will cost you on a month-by-month basis beforehand. This will make your case much more difficult to settle.  Consider what it will cost to move and calculate start-up expenses, including telephone installation and turning on electricity and cable.

10. Save money, if at all possible. One unemployed wife of successful business owner wanted a divorce immediately. Her divorce lawyer, however, convinced her to be patient.  He advised her that it would be better to wait a year before filing for divorce.  During that time, she was instructed to save enough money, hopefully, to move out and pay for her expenses on her own.  It was not easy, but the wife saved enough to move out a year later.  After she was settled in her own apartment, her lawyer then went to court and got the judge to order her husband to pay her monthly rent until the divorce was finalized.  If the wife had not moved out, the judge could not have directed the husband to pay her rent because she wouldn’t have had any rent to pay.  Instead, she might have been stuck in the house, with her husband, until the divorce was final or forced to spend her meager savings on rent; and that could have taken far more than a year. (While most Judges will address the non-working spouse temporary support, you cannot count getting temporary maintenance or the amount of the maintenance.)

11. Build up your own credit. If you don’t have credit cards in your own name, apply for them now. You may be able to get them now, based on your spouse’s income, and you will probably need credit later. Use the cards instead of cash and pay the bill by the due date.

12. Stay involved or increase your involvement with your children. First, this is important for your children because they will need all the support and reassurance they can get during the unsteady and hectic times ahead.   Plus, courts consider the depth and quality of your relationship when making custody and visitation decisions.  Therefore, more involvement now could translate to continued involvement, at a higher level, after the divorce, as well as the custody agreement you want and is best for your children.  Take a look at your own behavior.  Have you been so busy earning a living that you have let your spouse do the majority of work raising your children?  If so, now is the time to reallocate your priorities. If you have school-age children, help them get ready for school in the morning, help them with homework at night, and help get them to bed. Learn who their teachers are, who their doctors are, and their friends. If your children are not yet in school, spend as much time with them as you can before and after work. Even if you do not have much of a chance in getting custody, you will become a better parent and have a better relationship with your children.  Take heed from a much-publicized custody battle involving a famous film director and his former partner.  The father’s case for joint custody was severely weakened when the judge learned he did not know the names of his children’s pets or teachers, or their shoe sizes. Although many parents may not know their child’s shoe size, the Mother’s lawyer made a big deal out of it.

13. Withdrawing money from the bank. If you fear your request for divorce will send your spouse straight to the bank, withdraw half of the money in all your savings accounts first. Place the money in a new account, and keep it there until you and your spouse can work out the distribution of property. Do not spend the money if at all possible. If the money is in a checking account and you know the account is nearly emptied every month to pay bills, do not withdraw any part of that money. You will create financial mayhem if checks bounce.

14. Consider canceling charge cards. If you are the party responsible for paying credit card bills, consider canceling your accounts”“or at least reducing the spending limit.  Often times, the announcement of a divorce causes one party to go on a shopping spree.

If you have additional questions, contact Divorce Matters, and arrange to meet with an experienced denver divorce attorney.  Divorce Matters helps clients throughout the Metro Denver area get the best results possible in their divorce and child custody matters.