In most cases divorces turn into messy affairs. The overarching concern of any divorce should be the kids, but coming in a close second is the financial fallout from a divorce.
If you don’t prepare yourself ahead of time you may find that you don’t have enough money or resources to care for the kids or even take care of yourself, especially if you are divorcing a vindictive spouse.
Of course, you have not entered into the decision to get a divorce without careful consideration and, hopefully, you have given your best effort to honor your vows and commitments to your spouse. The sad truth is that sometimes marriages just don’t work out.
It is important that before you make a move to file for divorce that you make careful financial preparation. Some people may feel it is devious if you do not involve your spouse in your plans, but in cases of marriages with unreasonable or abusive spouses your plans for divorce must be done in secret.
It takes time to plan for a successful separation and divorce. If you are married to someone you cannot trust, then it is important to take that time and make plans for your life and the life of your children following a divorce.
Many women and men cannot wait until they announce that they want a divorce or separation, or they may find themselves with inadequate or not resources at all. Often, it is impossible to stay in the same household when a pending separation or divorce has been announced. There is no time, at that point, to get your finances in order.
Once there is nothing that can be done to save a marriage, it is a good idea to spend at least a year getting your finances in order. It is important to remember there are some preparations that are reasonable and others that are completely unacceptable and may come back to bite you when your divorce goes before a judge.
Do open an individual bank account for yourself before divorce or separation.
If your finances are tied together in a joint bank account it is important to begin to establish autonomy for yourself. Quietly open a bank account and have the statement sent to a P.O. Box. The situation will deteriorate quickly if your spouse sees mail at your home from a newly opened bank account.
In some states all assets, regardless of whose name they are in are considered community property. Establishing your own bank account may be of little use in the long run, but chances are if you have worked for and saved the money you amass prior to the divorce a judge will let you keep it. In the worst case scenario everything will be split, so if your spouse gets some of your savings you in turn will get some of theirs.
While it is not a bad idea to pigeon-hole cash, I do not recommend hiding any assets from the court. You will could make your life miserable if a disgruntled spouse finds out about hidden assets. You could also be found in contempt of court.
Do not wipe out family finances before filing for divorce
The best way to build your own funds to fall back on is to skim them from your own paycheck or allowance, if you are unemployed. It is going to take an effort to amass enough money for you to get a fresh start, but if you are determined you can do it. If you do not work outside the home you may find it necessary to get a job. Don’t trust that because you have been a stay-at-home mom that you will receive enough alimony on which to live. More and more judges are trying to split financial and custody issues fairly for men and women. This may leave you with less money than you anticipate. A judge will definitely frown on any move you may have made to wipe out the family account.
Do not run up credit card debt in your spouse’s name prior to a separation or divorce.
This does nothing but create trouble for both parties. In many states running up credit card balances in your spouse’s name is considered fraud. Often, this puts your spouse in the position of determining whether to press charges, risking the incarcerating their ex and the parent of their children, or eating the debt. It creates quite a conundrum and banks are not interested in the problems associated with your divorce or what you feel you needed to charge. They only want their money and many will prosecute to the fullest extent of the law. (This I know for sure, as I was formerly a financial crimes investigator with almost 50% of my cases involving domestic disputes. We required the spouse to press charges or eat the debt.) This is an unfair position in which to place anyone, even someone you can no longer live with, and you can never be sure of their final decision. You may find yourself facing criminal charges.
Do consult a lawyer before beginning divorce procedures.
Most lawyers offer a free consultation for divorce cases. You can learn a lot from this short visit with a lawyer. You may feel that it is in your best interest to go ahead and retain the services of a lawyer to guide you in financial and strategic planning up to the point of your divorce.
Unless the divorce is uncontested in a no-fault state, you will likely require the services of a lawyer before the divorce goes to court.
Do create a financial plan and work it, over time, prior to your divorce.
It is easy to get carried away with emotion and make irrational decisions when a divorce is pending. It is in your best interest to carefully plan for your separation and divorce and coach yourself to avoid overt conflict during your planning and saving time. You will be better off in the long run, and you will not give your spouse a pile of information to present to the judge. If you tend to be irrational you have to get yourself under control and remember you are doing it for your ability to succeed and survive financially in the future.
Personal knowledge and experience with 20+ years of pastoral counseling.
Personal experience as a financial crimes investigator.