“I’m cashing out of this marriage!” is a phrase often shouted during divorce proceedings. It’s a sentiment that is used to quell the emotional turmoil of one spouse, while attempting to frighten the other. Finances are often the root of most issues that arise during the divorce process. The battle grounds are waged over child support, spousal support, and of course, the legal fees. In today’s economy, where joint resources have already been depleted due to extended periods of unemployment, returning grown children to the household, and depressed housing and stock markets, the thought of losing the remainder of your financial resources to a litigated divorce is difficult to swallow. So, how can you part ways with your spouse without parting ways with your money?
- Identify areas of agreement. Make a list of the things you can and cannot agree upon, and address only those disputed items during your divorce.
- Can you both agree that you want the children to spend time with both parents equally? If so, time-sharing/custody may not longer be an issue over which time and money should be spent disputing.
- Can you both agree that paying legal fees to two separate law firms out of the same pool of resources is not in your best financial interests? If so, perhaps hiring a single collaborative-minded attorney will decrease your legal fee by 50% of more.
- Can you both agree that mediation will cost less than litigation? If so, then perhaps you want to investigate the benefits of mediation.
- Surround yourself with professionals. Divorce is a multifaceted process, which requires the expertise of a number of different professionals, including but not limited to attorneys and/or mediators, therapists, financial planners, and accountants. Assure yourself that you are receiving sound advice by seeking the opinions from people who are experts in their respective fields.
- Full Disclosure and Transparency. Too many divorcing couples try to play games in an effort to cheat the other financially. They try to hide bank accounts, lie about income, create unnecessary debt, etc. etc. In the end, there will simply be less of a total asset to divide because so much of your resources will be spent in discovery litigating over equitable distribution. Approaching the division of your marital estate with full transparency will keep more of the assets in your pocket and less wasted in the courtroom.
- Evaluate your marital assets and marital debts. Though it may be extremely difficult, try to work together (or through a family law mediator) to assess your total worth. Take the time to think about how you will divide your assets (will you need to sell the marital home or can one of you continue to reside there?) and how to tackle any outstanding debt obligations (are they easily divisible?) Remember that filing for bankruptcy won’t eliminate your obligation to pay child or spousal support.
Be mindful as you approach the divorce process that you can maintain control if you stay on a directed path towards your goal. Remind yourself (and your spouse) that deviated from the path will only result in squandered assets and emotional and financial devastation. Is it really worth it?