• Athena Financial Group

Divorce, Let's Talk About It

Divorce - an ugly thought but with more than half of marriages ending in it, we should talk about it. The fact is, divorce has a huge impact on people financially, especially women. In some studies, a women’s standard of living drops considerably after a divorce. Many women have taken time off to raise children, or take care of aging parents and their earning power has been diminished I generally urge people to consider carefully before getting a divorce and to make sure that it is truly the right direction. Sometimes, it is the stress of everyday life that is weighing down a relationship and some counseling can help you re-discover your marriage. Of course, if there is any form of abuse, emotional or physical, you should seek professional help immediately and remove yourself from danger.

Once you feel that you are going down the path of divorce, it is important to do some planning. Even before going to see a lawyer, make a list of all the assets and who owns them. Are they owned by you or your spouse? Jointly? Was the asset acquired before the marriage? Was it an inheritance? As a side note, if you do inherit money you may want to always keep it in a separate account so that is not comingled with joint assets. It becomes very difficult to claim it was your inherited asset if it is owned jointly. Also, make sure to check all the credit cards and debt and see who owes what. Running your free credit report on www.freecreditreport.com is a good idea. Sometimes people run up a lot of debt before and during a divorce. It is a good idea to keep an eye on it.

Make sure to get the retirement accounts as well. Old pension plans, 401k plans, and IRA’s are all included in the divorce. Do not think an asset is too small. Every dime counts, and can make a huge difference in retirement.

Next, think about living expenses. Where will you live and can you afford it? Many women fight tooth and nail to keep the marital home, for the sake of the children, only to find out later they cannot afford it and end up selling it. This is generally not a good financial strategy. Make sure you can afford to live and maintain the home before the divorce proceedings. Don’t forget the lawn needs to be mowed, or the driveway shoveled. These little expenses can add up. Really do a deep dive into your budget so you fully understand how much you are going to need after the divorce. Go over your checking account statements and credit card statements for the past six months to get a true picture of your expenditures.

Also, the days of alimony (Spousal Support) are dimming. Many women do get some support, especially if they were non-working spouses, but it is generally limited to a few years. It is also based on how long the marriage lasted. Keep in mind that it can go both ways - wives have to pay alimony too! With many women earning more than their husbands, they are having to pay spousal support now.

Some divorces can be easy - no children, few assets. Using an arbitrator can be very cost effective. However, if there are children, businesses, significant assets, or the sense that the spouse was hiding assets, hiring an attorney is advised. Use an attorney that specializes in family law.

This will be a very difficult time. You and your spouse may say and do some dumb things during this process. Use professionals to guide you, put a plan together, and get counseling. Then pick yourself up, dust off and move forward!

Financial planning and advisory services offered through Athena Advisory Services, Inc.

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