Preparing for Divorce
By: Maury D.
Beaulier
Nobody marries with the expectation of
failure. Married couples never contemplate
that the person they once loved could later
seem to be a stranger and perhaps even an
enemy. Yet, statistics paint an ugly
picture. Approximately five out of 10
marriages today end in divorce. In divorce
proceedings, women lose financially, their
standard of living may drop as much as
thirty percent in the first year following a
divorce. Men, may not suffer as great
financially, however, they tend to lose
precious time with their children.
One of the greatest contributors to divorce
is the issue of "control" - either financial
or personal. Who controls the bank account?
Who sets the social agenda? When one partner
to a marriage "controls", the other partner
loses their sense of self. A divorce becomes
imminent as they controlled partner tries to
regain their self-esteem.
In a divorce situation, even the most
cooperative of couples may be transformed
into warring parties. It that does occur and
you are not prepared, you can be sure that
you may lose out on contested divorce
issues.
Your goal must be to be prepared and be
ready to present strong arguments as part of
the divorce. This always requires pro-active
planning. Below are several simple and
logical ways to protect yourself financially
if you believe your marriage is in jeopardy:
ONE: Keep Non-Marital Assets Separate
Non-marital assets are not part of the
assets divided in a divorce. Instead, they
are considered the asset of either the
husband or the wife and generally awarded to
that person in a divorce proceeding.
Categories of non-marital assets include:
- property you inherit;
- proceeds from personal injury awards
(e.g.. Worker's compensation or accident
proceeds);
- items owned prior to marriage; and
- gifts to one party rather than the
family.
If non-marital assets are commingled with
assets purchased or improved during
the marriage, it may not be possible to claim
the asset as yours in the event of divorce.
However, some "tracing" of non-marital
assets may be possible. For example, if a
non-marital asset is sold during the
marriage and the proceeds from the sale are
used to purchase another asset, it may be
possible to "trace" a non-marital interest
in the new asset. For example, if a car
owned before a marriage is sold during the
marriage and the proceeds used to purchase a
new vehicle, a party may be able to claim a
non-marital interest in the new vehicle. To
do so, it is very important to retain all
documents demonstrating the sale of the
asset and the use of the proceeds realized
from the sale.
TWO: Establish Your Own Credit
Make sure your name is listed on all
household accounts and investments.
Establish at least one credit card in your
own name. This will help to create an
individual credit history. When you're on
your own, you will have a better chance
qualifying for loans, mortgages and credit
cards. These are all important
considerations after a divorce.
THREE: Review Your Financial Holdings
Regularly
Maintain complete and separate records of
your financial holdings such as bank
accounts, IRA's, 401K, land purchases, and
stocks. This includes assets in your
spouse's name as well. You may wish to
maintain copies of these records at your
place of employment or in a safety deposit
box in your name. Records have a way of
disappearing after a divorce has been
started.
FOUR : Time Your Divorce
The timing of your divorce may carry with it
a significant financial impact. For example,
in a single income family, the non-working
spouse may not have earned enough money to
qualify for Social Security at the age of
retirement. However, if spouses are married
at least 10 years and don't remarry, the
non-earning spouse may qualify for Social
Security benefits based on the ex-spouse's
earnings when both reach the age of 62.
FIVE: Close Joint Accounts
If a divorce is imminent, you should
immediately contact joint-credit-card
companies in writing to freeze or cancel
your joint accounts. You do not want to be
responsible for your spouses' new credit
card charges, particularly when those
charges may include attorney's fees. This
protects your credit. It is important to
remember that, although a creditor may
freeze a joint account, the outstanding
balance must be paid off before the account
can be closed.
You may also wish to close your joint bank
accounts. If any proceeds are removed, keep
a carefully accounting where the money is
placed or how the proceeds are spent. You
will undoubtedly be asked for that
accounting as part of the divorce process.
You can save yourself time and money by
keeping accurate records.
SIX: Video Tape Assets
You should photograph or videotape the
contents of your home including any garages,
sheds or out buildings, to record the assets
and fixtures contained in each. In any
divorce, it is possible that one party may
be required to relocate from the family
residence. Once you relocate, it may be
difficult to recall all of the assets and
furnishings that are contained in the house.
If you forget them, there is a good chance
that they won't be factored into the values
that each party receives in the property
settlement.
SEVEN: Do Not Leave the Marital
Residence.
In a custody case, leaving the marital
residence may impair your ability to
successfully seek custody of the children or
an award of the real estate after the
divorce. By relocating, you create a sort of
status quo that courts are often reluctant
to disturb.
EIGHT: Cancel Joint Credit Cards &
Separate Debt.
If a divorce is imminent, you should
immediately contact joint-credit-card
companies in writing to freeze or cancel
your joint accounts. You do not want to be
responsible for your spouses' new credit
card charges, particularly when those
charges may include attorney's fees. This
protects your credit. It is important to
remember that, although a creditor may
freeze a joint account, the outstanding
balance must be paid off before the account
can be closed.
NINE: Collect Information Related to
Children.
In any case that involves children, custody
disputes are a distinct possibility. As a
result, documents relating to your children
may be critical to support your contention
regarding medical issues, care during the
marriage, or who was the parent providing
their primary care. Some items you may wish
to obtain or retain include:
- Family photographs including those
depicting family vacations or the
children's extracurricular activities;
- Social Security, Student Body, and
State ID cards;
- Medical records and prescription
information including the names and
addresses of any treating physicians or
counselors for the children or the
parties;
- Report cards and school records.
TEN: Hire an Experienced Divorce
Lawyer
It may be very important to hire a good
lawyer early in your divorce planning
process. An experienced attorney can help
you avoid mistakes that could later cost you
in your divorce proceeding. By choosing an
attorney early in the process, there is less
of a chance that you will be caught off
guard and wind up playing catch up on the
issues.
There are many lawyers to choose from so it
is important that you ask important questions
in order to choose one that is knowledgeable
and right for you. Ask about their
experience in family practice and
specifically divorce. Ask the attorney to
explain the legal issues as well as the
legal process in your particular county.
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