How to navigate and survive the murky waters of divorce with as little baggage as possible

divorce

The more conscious awareness you can bring to your divorce, the easier and quicker you’ll be able to move on. It’s the emotional baggage that we carry with us that prevents us from having a satisfying new life or relationship.

Most divorces have what I call a Leaver and a Leavee. In some cases, it’s a mutual decision to separate, but this isn’t the norm. The contrasting emotional states of the Leaver and Leavee can cause major problems.

The Leaver will generally be the less emotional one. By the time they ask for a divorce, they’ll have detached emotionally. The Leavee, on the other hand, may have been unaware of what the Leaver was planning or ignored the signs. When faced with a divorce, the more emotional person can lash out due to hurt, fear, and anxiety.

Are you the Leaver or the Leavee?

I’ve experienced both sides. In my first divorce, I was the Leaver and my husband tried to hurt me as much as he possibly could. Even though he loved his children, his pain and anger blinded him to the harm he was doing to them while taking it out on me. This is very common.

The second time around, I was the Leavee. I didn’t want the divorce and wasn’t expecting to have to go through this a second time. I couldn’t prevent it though. The best thing I did was not lash out. The inner work I had done helped me to take the high road – to be kind – and keep it as amicable as possible. As a result, I was able to accept what was happening and move on with very little emotional baggage and a healthy level of self-respect.

I encourage you to take the high road if you possibly can. It will require some inner work but it’s so worth it. You, your children (if you have any) and everyone around you will benefit greatly and the self-respect you’ll have as a result is priceless!

Important: Make sure you take care of the mental, emotional, and practical aspects of your divorce.

  • To take care of your mental and emotional state, I recommend that you work with a coach, counselor, or trusted mentor. Know that even though you may not see it right now, this transition could be a wonderful gift that catapults you to a new, expanded, and happier life.

I didn’t want or expect to get divorced a second time, but it did turn out to be exactly what I needed to help me grow to a level of joy and peace that I never dreamed was possible.

  • If you can avoid it, use a divorce mediator rather than a lawyer. Some lawyers are trained in mediation and could be a good choice. Once two (or more) lawyers are involved, it can become ugly and contentious. Divorce lawyers are notorious for subtly promoting fights so that they can earn more in billable hours. Ask around for referrals. Do as much research as possible.
  • The most important thing you need to do is take care of the practicalities. This should be done as soon as possible. Do not procrastinate – start now!

Here is a comprehensive list of items to take care of:

Planning for divorce

1. Gather and begin organizing your financial documents. Assets have a way of disappearing after divorce proceedings begin. This is the only way to determine your total assets so you can begin planning for future expenses. The list includes:

 Bank and savings account statements

 Credit card bills and agreements

 Retirement and pension plan statements

 Investment account statements

 Life insurance and annuity contracts

 Loan Documents and Applications

 Home title or lease

 Wills and Trusts

 Marriage and Birth certificates

 Federal and State Tax Returns for Past Five Years

 Business Records and Financial Statements

 Social Security records

 Military discharge papers

 Pre- or post-nuptial agreements

 Miscellaneous Income and Assets

2. Retirement, Pension Plans, and Employee Benefits. Obtain a detailed description of the above. Employee benefits could include year-end bonuses, accrued vacation and sick time, health insurance, life insurance, disability insurance, expense accounts, stock options, and more unusual benefits such as Phantom Stock, Stock Appreciation Rights, and Restricted Stock.

3. Miscellaneous assets. Other assets of value that are often overlooked are timeshares, season tickets, club memberships, magazine subscriptions and pre-paid insurance.

4. Make copies of all important documents. Find a safe place to store them.

5. Pay bills. You should pay bills and pay off credit cards from joint accounts before separation so that you don’t get stuck with them later.

6. Check safe deposit boxes. Determine the contents and if possible, secure both keys.

7. Credit report. Get a copy of your credit report.

8. Set money aside. Estimate how much money you will need for the upcoming months by looking at your spending history for the last year. This will also help you to see where you need to cut back.

9. Open a post office box or private mailbox.

10. Open a separate bank account in your own name. Also apply for your own credit card and try to obtain check-writing privileges. Use your new mailing address.

11. Repairs and maintenance. Use your joint funds before separation to take care of car and home repairs and maintenance. Get needed medical checkups and dental work done and shop for clothes for yourself and your children.

12. Consult with a Financial Professional. See “How to choose a financial professional”.

13. Finish your education or professional training. If possible, take the time to complete your education or professional training. For the best chance of a positive new life, take your time planning your divorce. Do not rush!

14. Make sure you have a support group. Going through a divorce can be very traumatic and should not be faced alone. Seeing a therapist may be a good idea. Surround yourself with a group of good friends and/or relatives to help you through this phase. People you trust can provide feedback and assistance. They can also accompany you to whatever meetings or financial sessions may be required, based on your particular situation.

15. Discuss divorce calmly with your spouse. Even though emotions can be strong, be realistic and calm when discussing divorce with your spouse. In a calm atmosphere, a spouse is often more willing to make concessions.

16. Find and speak to a family law attorney or mediator. A mediator can help you negotiate a settlement, but before you sign, be sure your final settlement is reviewed by an attorney. In retaining a lawyer, be sure to avoid using the same one as your spouse.

17. Start planning for legal expenses. Once you have spoken to a mediator and/or attorney, you will have some idea of what your legal expenses will be and can plan accordingly.

How to choose a financial professional

You may already have a financial advisor you trust; if so, he or she may be of great help as you begin your single life. However, consider evaluating your advisor’s experience with situations like yours—divorce—before making a final choice. Finding a qualified professional, whether as a replacement or a new advisor, takes some time and research.

Who’s who?

Accountant (CPA)

A Certified Public Accountant can give advice regarding financial statements and is often involved in the planning and preparation of income tax filings. A qualified accountant can make judgments regarding the quality and reliability of a company’s books and records – which can be very helpful in divorce cases involving a family-owned business.

Certified Financial Planner (CFP)

A CFP’s job is to give you an understanding of your financial needs. A CFP can help you with budgeting or assist with tax, estate or retirement planning. He or she will help you organize your financial future by proposing a personalized plan with a time horizon and a solid investment strategy to help you towards financial stability for tomorrow.

Certified Divorce Financial Analyst (CDFA)

A CDFA is a financial professional – often also a CFP or an accountant – who has specialized skills and experience that enable him or her to analyze the long-term financial impact of divorce. Financial professionals who have met specific education and experience requirements have been designated CDFAs by the Institute of Divorce Financial Analysts (IDFA).

CDFAs receive special training in divorce-related financial issues such as tax and property division. CDFAs also receive special software enabling them to produce charts and graphs that will show a client the results of choosing one scenario over another.

A CDFA can take the offer on the table and project 5, 10, 20 years to show you what you’ll have to live on if you sign the agreement. If the projections show that you’re going to run out of money after 18 months, you’ll need to renegotiate your agreement. That’s why it’s so important to meet with a planner before you sign your agreement.

If this advice comes too late for you, meeting with a CDFA will still be worthwhile: he or she can help with short and long-term financial planning.

Begin by getting referrals. Talk to friends, relatives, and professionals such as therapists, lawyers or accountants you trust.

Once you have chosen one or more candidates to be your financial advisor, schedule appointments so you can ask questions and get to know the people you are considering. Pay attention to your basic impressions. The financial advisor you choose should inspire confidence and easy interaction; remember, she or he is supposed to work for you.

During interviews, pose a series of questions to help you gauge the qualifications of the candidates and to determine if you will enjoy working with them. Be sure to ask the following questions:

 Who are your typical clients?

 Do you provide written plans to clients and if so, how extensive are the documents?

 Have you ever been disciplined by a regulatory agency?

 How much are your services going to cost and what are the terms of payment?

Remember that once a fee is agreed upon and a contract is signed, any additional fees should be by prior written agreement only.

Once the process has begun

1. If you have not already done so, get a checking account and credit card in your own name. Be smart. Make the first check “1000” rather than “1.” That way it won’t be so apparent to merchants and others that it’s a brand new account.

2. Inform banks and other custodians of your jointly held accounts, in writing to prevent your soon-to-be ex-spouse from moving money. State that no money can be withdrawn or stocks sold without the approval of both spouses.

3. Learn about the laws of your state and your own finances. Understanding your assets and liabilities will provide a foundation for a discussion of your requirements. Learning about laws on alimony, child support, and division of property will help you determine how to best divide joint accounts and possessions to ensure that you and your children are ready to move ahead.

4. When discussing final settlement agreements, view money as a survival issue. You are entitled to half of everything you acquired during the marriage. Choose two or three priority issues, and then be willing to make concessions on those issues that are less important to you.

5. Since the money you brought into the marriage, as well as gifts and inheritances, are yours (in most states), save all the documents that could help you prove your separate property.

6. To raise cash, sell unwanted items after making sure that you both agree and that there’s nothing barring you from doing it.

7. Before the divorce is final, make sure to get the necessary records such as; copies of past tax returns, property you are receiving or tax basis of investments you receive.

8. Change beneficiaries on retirement plans and insurance contracts. Execute a new will and revoke family trusts.

9. The following items need to be taken care of. Ask your financial professional and attorney about these:

 Life and disability insurance. Your child support and alimony will end when your ex-spouse dies or is unable to work.

 Transfer of retirement assets. You should begin the transfer of your portion of your spouse’s IRA as soon as possible. All other retirement plans require a Qualified Domestic Relations Order to make the transfer which is best drafted by a skilled attorney. Get the paperwork done as soon as you can because the death of the employee spouse can have a very undesirable result.

 Taxes that need to be taken into account when dividing property.

 Taxes on support. Since alimony is taxable, you should set aside a portion of the money you receive each month.

 Joint debt. Terminate joint credit card accounts and refinance mortgages so that only the spouse responsible for the payments is liable for the debt.

 Retitling of property.

 Borrowing money. Consider borrowing from a line of credit or home equity loan.

Divorce is just like a business transaction. Think of it as a partnership that didn’t work out. Try to work things out and separate on good terms, especially if you have children together as your lives will forever be intertwined.

After the divorce

Below are some very common tasks that need to be addressed after being divorced. As you move on after your divorce, there are a host of steps you may want to take. No single person will need to do all of them, but you may find one or two items you haven’t thought about.

 Start with changing your name as part of your divorce decree. It’s free when you do it at this stage and will cost you money if you do it later. Change your name with social security.

 Change your driver’s license. The requirements of this will change from state to state, but you’ll usually need to change your name with social security before you change it on the driver’s license.

 Make sure you have several copies of your Judgment or Decree and Marital Settlement Agreement because you may need them for any transfer of property, accounts, debts, etc.

 Make sure you have filed your “Certificate of Divorce or Dissolution of Marriage” with the Clerk’s Office.

 Make sure you have everything filed with the child support enforcement office.

 Make sure that if there’s supposed to be a Qualified Domestic Relations Order done that it actually gets done. It’s easy to overlook this.

 Make sure all joint accounts are closed and distributed accordingly.

 If you have joint bank accounts to be closed, make sure there are not any outstanding checks.

 If you made any arrangements with any company for automatic withdrawals or charges, be sure you contact them prior to closing accounts.

 Make sure all property is distributed properly. If arrangements need to be made for pick-ups or drop-offs, do it as soon as possible, so you do not forget anything.

 If your divorce decree calls for a quitclaim deed or statutory warranty deed, make sure that actually gets done too.

 If there were automobiles to be transferred, be sure to take care of the title, registration, and license plates.

 Make sure your auto insurance got changed over okay.

 If there was real estate involved in the Marital Settlement Agreement, be sure to take care of the deed work.

 Make sure that health, home, and life insurance is addressed and reviewed.

 Ask for the proof from your ex that he has purchased required life insurance.

 Make sure all wills are modified or changed.

 Take care of all name change notifications.

 Keep a journal of all visitation and support payments.

 If your spouse files for bankruptcy contact a lawyer as soon as possible.

I wish you the best as you navigate your life transition.

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