7 Essential Divorce Considerations to Protect Your Rights
by Tracy Achen, Divorce Coach
If you are thinking about ending your marriage, or are currently in the divorce process, the most important thing you need to do is accept responsibility for the outcome of your divorce. Because a woman's standard of living generally drops at least 30% after a divorce, the decisions that you make now can have a considerable effect on your future.
It is wise to establish a plan of action instead of going into your divorce blindly. Begin by being well informed and organized with the Ultimate Divorce Organizer (#ad), a comprehensive divorce considerations help guide. This resource will enable you to keep track and record everything about your divorce from start to finish in an easy to reference fashion.
If it is inevitable that your marriage will end, utilize the following divorce considerations to protect yourself. Most importantly, if your spouse has initiated proceedings, do not sign anything until you are represented and informed by a lawyer. Also, do not use the same lawyer that is representing your spouse. Retain your own attorney to level the playing field and have fair representation.
Divorce Considerations on Money: Consider consulting a certified financial planner that is skilled in divorce proceedings. They can help prepare you financially before your start your divorce, and point out areas of your settlement that will have repercussions in the future. Keep the following suggestions in mind as you think about divorce:
- Do not make large purchases that will add to community debt. Try to keep all assets liquid.
- Start to stash back money now for emergencies before and after your divorce. Traveler's checks are a fairly safe way to do this.
- Put a freeze on joint credit card accounts.
- Keep working to secure your newly single future.
- If you have your paycheck automatically deposited into a joint account, set up an individual account, and have the deposits made to it.
- Keep all individual assets separate. These include inheritances, workers compensation, personal injury awards, items that you brought into the marriage, and gifts given to you individually.
- Have any necessary mechanical repairs done to your automobile to insure that you have reliable transportation after the divorce.
Divorce Considerations on Support:
- You are eligible for interim maintenance and child support during separation and divorce proceeding.
- Child support is not taxable.
- Your ex's bankruptcy won't affect the child support order.
- Spousal support is taxable.
Divorce Considerations on Insurance: Before you divorce, get any medical or dental check-ups done while you are still covered on your spouse's insurance.
- Your divorce papers can stipulate that your spouse carry insurance on the children.
- You can request that your spouse name you or your children as beneficiaries on his life insurance policy (you may not get it, but it's worth a try).
- You have the opportunity to continue your coverage from your ex's health insurance plan after the divorce by electing COBRA coverage. You will have to pay l04% of the policy cost, but this can provide temporary (up to 36 months) coverage for you. You need to convert the policy within 60 days of your divorce or legal separation.
Divorce Considerations on Retirement and Social Security:
- Pensions are joint assets, and can be divided in a divorce settlement. Your lawyer will need to prepare a Qualified Domestic Relations Order (QDRO) before your divorce is finalized.
- If your marriage lasted for at least 10 years, you are eligible to collect on your ex's spousal portion of their social security pension, provided that you don't qualify to collect based on your own earning. If you qualify, you can collect once your ex-husband turns 62 (whether or not he retires), and the divorce has been finalized for over two years.
- Unmarried children under 18 are entitled to survivor benefits if your ex-husband dies.
- If you were married for at least 10 years, you qualify for the same survivor benefits as a widow.
Divorce Considerations on Property and Assets: Consider the tax implications of any property received in the settlement. Some property and assets are subject to a capital gains tax of up to 40% when sold. Consult a certified financial planner on the division of assets and holdings.
- The marital home is exempt from this tax, but be realistic about whether you can really afford to live there.
- A cash settlement is preferable to installment payments as part of a divorce settlement. Ex-husbands don't always live up to payment agreements. Get the money while you have the chance.
Divorce Considerations on Taxes and Liens:
- Contact federal and state tax departments to see if there are any outstanding taxes owed. Remember that you will be held just as liable as your ex.
- Check at the county court house to see if there are any liens placed on any of your property. Think twice before receiving such property in a settlement, unless your ex can pay off the lien before the divorce is finalized.
Divorce Considerations on Documents and Records: It is important to have copies of all records and accounts, since they have a way of disappearing once proceedings have begun. With copies, you have all the relevant information that you will need in the future.
Certificates of Deposit
Home Equity Loans
Credit Card Accounts
Tax returns - last 5 years
6 months of pay stubs
401 K plan
Wills and Trusts
Safe Deposit Box
Purchase Price of Home
While divorce is a very emotional time, you need to approach it like a business deal and take control of the proceedings. Don't cave in because you feel overwhelmed.
While you may feel shaky right now, taking control of your divorce will make you a stronger person. In the following articles you’ll find guidance on such divorce issues as making sure you have health coverage, how retirement assets are divided, divorce property issues, and more: