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How To Start Preparing Your Personal Finances for Divorce

posted by admin 3:04 PM
Monday, August 29, 2011

“A journey of a thousand miles begins with a single step.”

When the Chinese philosopher Lao-tzu said that nearly 3,000 years ago, he certainly wasn’t talking specifically about divorce – and yet, his words of wisdom do apply.

Divorce is a journey, of sorts. And, even though the mere thought of divorcing your husband may seem completely overwhelming at first, you do have to engage in the process. You have to take the initiative. You have to begin with that all-important first step.

As a Divorce Financial Strategist(TM), my advice is that you start this “journey” by getting a handle on your personal finances.  With just a few relatively simple steps, you can be on your way to establishing a firm financial foundation, one that will serve you well as you proceed through the divorce and long into the future, too.

For example, in order to start preparing your personal finances for divorce you need to:

1. Take inventory of all financial documents and records. Gather all your financial records, including bank account information, mortgage statements, credit card bills, wills, trusts, etc. (See more details in our Divorce Financial Checklist.) Once you have collected them, don’t keep these records in your home. Make copies, and take them to a trusted friend/family member, or use a safe deposit box that your husband can’t access.

2. Begin securing funds for legal and other professional fees. You’ll need resources to hire a qualified divorce team.   If your husband controls all access to the family funds, he can make this difficult (if not impossible). Choking off the money supply is a common tactic, but there’s no reason you have to fall victim to this kind of financial squeeze. Be proactive instead. Make sure you have funds that are secure and available only to you.

3. Open new accounts in your name. Your divorce attorney may instruct you to withdraw up to half of your joint funds and deposit them in new accounts.  (State laws will dictate what you can and cannot do.) Don’t use the bank where you have your joint accounts. Go to a different bank, and open a new checking and savings account in your name. Moving forward as a single woman will require that you establish good credit, so open a new credit card account in your name, as well. Keep in mind, though, that new federal regulations are making it harder than ever for women with little or no income to establish credit on their own. You’ll have to proceed with caution . . . just make sure you do proceed.

4. Get a copy of your credit report. While gathering your financial records (Step 1), be sure to get a copy of your credit report, too.   Monitor it so you can keep tabs on your credit score. (See my post, How To Protect Your Credit Score During Your Divorce, for more tips.) Plus, if you keep a watchful eye on your credit report, you’ll also be the first to know of any unusual activity. Is your husband charging gifts for his girlfriend on your joint credit cards? Or is he dissipating marital assets in some other way?

5. Open a post office box. You need your mail delivered to a secure, locked box that only you can access. Make sure you use this address to receive correspondence from your divorce team, your new accounts, etc.

6. Change your will, medical directives/living will, etc. Most states won’ t allow you to completely disinherit your husband until after the divorce is final. But, you can take steps to prevent him from making medical decisions on your behalf or inheriting all of your assets should you die before the divorce settlement agreement is signed. Remember, you’ll also want to change beneficiaries on life insurance policies, IRAs, etc.

Once you have completed these initial steps, you will be on your way towards a new and secure financial future. Take it step by step, and you’ll start feeling less overwhelmed, more knowledgeable and better equipped to continue on your journey to a single life.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.


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How to Determine Alimony (also known as Maintenance in some states)

posted by admin 10:02 AM
Tuesday, January 25, 2011

Professional business women who are the primary bread-winners in the home often wonder if they will need to pay alimony to their husband and if so, how much they will be required to pay.

That is a tough question because the laws vary greatly from state to state.  In some states, there are very explicit guidelines that judges must use to determine the amount and duration of alimony.  In others, they simply list “factors” that a judge should take into consideration when determining alimony.  Also, be aware that some states will consider the fault of the party when determining alimony. For example, if the couple is divorcing because one of them has committed adultery, the court may consider that when determining whether alimony should be paid.  That is one very good reason that you need to speak to a good divorce attorney if you plan to have sexual relations with someone other than your spouse before your divorce is finalized (this can possibly affect both alimony and child custody).

Here are some of the factors a judge might use to decide whether your spouse is eligible for alimony:

1.       The standard of living established during the marriage (One of the primary purposes of alimony is to help the receiving spouse maintain a lifestyle after their divorce that is relatively comparable to their lifestyle before their divorce.)

2.       Property awarded to each spouse (Alimony is usually determined after the property division has been decided.)

3.       The duration of the marriage

4.       The income and property of each spouse

5.       The ability of the person to become self-supporting

6.       Present and future earning potential of both spouses

7.       Whether there are children living in the home

8.       If there was lost or reduced earning capacity of the person who is asking for alimony/maintenance that resulted from delaying his or her career during the marriage

9.       Tax consequences

10.   Contributions and services of the spouse who is asking for alimony or maintenance

11.   Whether either spouse has wasted marital assets

12.   Actions taken by a spouse in contemplation of the divorce

13.   Any other factor the Court determines is relevant

There is also something called Rehabilitative Alimony, which is often awarded in short-term marriages.

This type of alimony is usually awarded for only a few years and its purpose is to allow the receiving spouse to go back to school or to get job training so that they will quickly be able to support themselves financially.

It is really not possible to know whether you will be required to pay alimony until you consult with an experienced family law attorney and a qualified divorce financial analyst.  If you are contemplating divorce, please call us at 917-602-6977 for a free, 20-minute, no-obligation consultation with one of our Divorce Financial Strategists™.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.

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If you are a busy career woman who is in the midst of an emotionally-charged divorce you might be dealing with several issues that you had never expected to face.   This is especially difficult for those of you who once had a clear and firm plan for your financial future.  You took the time to work with your spouse to ensure that the both of you and your children would be financially secure.

Now everything’s changed.

No matter whether the divorce was your idea or something thrust upon you, you now are wondering what tomorrow will look like – much less the rest of your financial life.  You might be tempted to accept the first settlement proposal suggested by your divorce attorney or by your spouse’s attorney just to get things over with.  As tempting as this may be, you should take your time with making these critical decisions because, for the most part, they cannot be undone.

Getting through the financial issues is often the toughest part of a divorce.  But it doesn’t have to be this way.  Meeting with a Divorce Financial Strategist™ (a Certified Divorce Financial Analyst [CDFA™] with advanced training in divorce financial planning strategies and asset protection) can ensure your financial protection now and in the future by helping you fully understand the financial and tax implications of your proposed divorce settlement.

Here are some of the ways a Divorce Financial Strategist™ or Certified Divorce Financial Analyst can help you:

  • Planning – A divorce financial analyst can help by developing a short-term and long-term financial plan so that you can make sure that the decisions you make today won’t negatively impact your financial future.
  • Researching – A divorce financial analyst traces and illustrates assets, debts, income and expenses as well as assesses tax consequences and prepares reports showing alternative settlement options.
  • Strategizing – By developing and analyzing multiple financial scenarios, a divorce financial analyst can help you understand the immediate and long-term implications of each proposal.
  • Reviewing – A divorce financial analyst can review settlement proposals, prepare schedules to compare alternative outcomes, and provide an objective second opinion to help you make more informed decision.

If you would like to see how one of our Divorce Financial Strategists™ can help you clarify the financial details of your divorce and get you a better settlement, please call us at (917) 602-6977 or email us at to schedule a free, no-obligation, half-hour consultation.

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