You might ask, “Who would ever plan for a divorce?” While no one plans to divorce, the fact is that the divorce rate in the United States is about 50%, which translates to about 2 million divorces annually. If you are in the midst of a divorce, understanding the process and knowing what to expect can reduce stress and make the process easier. It is important to plan before, during, and after a divorce.
The divorce process consists of three phases: filing the necessary paperwork; discovery (research into the financial background of both you and your spouse); and disposition (possibly through mediation but sometimes through a trial). There are actually many options to settlement that don’t necessarily require a trial. Mediation or collaborative divorce might be an option for you.
Top 10 things to consider before filing for divorce
●• Determine if this is this the right choice for you. Keep in mind that divorce is an expensive, stressful undertaking. Deep soul searching should be done before making the life-changing decision to file for divorce.
●• Make sure to do your research. The laws in each state vary widely. There are different timelines for divorce, as well as the time you need to be separated before you can file for divorce. Also, you should find out how your attorney charges, i.e., by the hour, on a retainer basis, etc.
●• You need to set goals. What are your goals for the future — both personally and financially? It is important to determine your goals before you proceed with the divorce.
●• What makes sense for custody of the children? The best interests of the children should be a primary concern. Does 50/50 or joint custody make sense? Different situations call for different custody arrangements.
●• Get organized. The more organized you are, the less you will pay in attorney and other fees. You should be collecting bank statements, brokerage statements, tax returns, mortgage documents, and retirement account information. It’s also a good idea to make a rough budget of what your income and expenses will be post-divorce.
●• That post-divorce budget will help you make some big decisions. For example, should you stay in the marital home? Does it make sense financially for you to keep it? A good budget will give you a much clearer picture of the long-term implications of such decisions.
●• Joint accounts should be closed. If you have any joint credit card statements, you should close those accounts immediately.
●• Obtain a copy of your credit report from the three credit reporting services.
●• Hire the right team. It makes sense to seek recommendations for divorce attorneys from other professionals. You should interview attorneys to make sure that you are compatible. Also, remember that your attorney is not a therapist, and can only advise you regarding legal aspects of your divorce. Using your attorney as a therapist can be expensive.
●• Take time for you. It’s important that you do what it takes to stay healthy both mentally and physically. Getting divorced is a stressful process.
(Adapted from Institute for Divorce Financial Analysts.)
Mary Ann Ferreira is an adviser and partner at Viridian Advisors. She is a Certified Financial Planner practitioner and a Certified Divorce Financial Analyst with expertise in the financial aspects of the divorce process. Her passion is to create a positive client experience, especially for women and their families in the Pacific Northwest.
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