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You have made the difficult decision to start the divorce, or as I like to call it, the “marital transition” process. Suddenly everyone you know is giving you their opinion and advice on what to do next. You feel overwhelmed with emotion and are filled with fear of the unknown, and the dread of making a financial mistake that can affect your future. But you need to realize that you are not alone, and these thoughts are normal and, more importantly, manageable. When I went through my own divorce more than 13 years ago, I was not sure where to begin. Over the years and with a combination of personal, professional and client-based experiences, I have developed the following Top Ten Tips to help people not just survive, but thrive, throughout the divorce process. 

 

If you have children, it does not matter what age they are – 4 or 24 – they will be affected by their parents’ divorce. While a 4 year old may not remember what it was like to be together as a family, a 10, 14 or 24 year old may feel like they have to pick sides, or take care of one or the other parent. Kids deserve a home where they can feel safe, and where they have the love and support of their parent, not the other way around. Getting caught in the middle of divorcing parents’ fights, having to pass angry messages back and forth, or being told they are “the man of the house now” is stressful and frankly, not your kid’s job. The more amicable you and your spouse are, and the better you communicate without involving the kids, the more you lead by example. Let them know both of their parents love them.

Every divorce is unique, and it is so important for you to be your biggest advocate because there is no “right” cookie cutter approach to take. Know your specific state laws. Every state is different. Some have residency requirements, some states will consider assets prior to the marriage as separate property, while other states are community property states. The internet is a valuable and free tool for this state-specific research, and most court systems have local, free public libraries with staff to assist with research as well.

In addition to knowing the basic laws at play, it’s important to know your options regarding the various methods to proceed with the divorce process. They include divorce mediation, taking a collaborative approach, or litigation (which means starting the processing via the court system). If you and your spouse are amicable and want to try and work together to settle your financial affairs, then mediation or a collaborative group approach may work well for your situation. If you choose to enter the court system, the court will oversee the process, schedule hearings and conference dates, and may require that each party retain a lawyer. So know your options, and weigh them carefully to find the best fit for your situation.

You need a clear understanding of your income, expenses, assets and liabilities. First, gather all your statements that determine your annual income from wages (W2’s), business or investments. Second, collect monthly and quarterly statements for your checking, saving, 401k, retirement accounts and don’t forget annual pension statements and 429 plans held for the benefit of the children. Do you have a secondary home, timeshares, extra cars, boats or antiques? Know your monthly payments for cars, credit card, mortgage and annual expenses for auto, life and home insurance. You should have documentation to support the last 3 years of income tax returns.

You have all your statements, now take a hard look at your accounts. What credits and charges are being automatically deposited and deducted? Review every line item for several months. Are there any unnecessary monthly expenses that you can cancel, such as subscription services or memberships that you do not use? Don’t forget about annual expenses like taxes, home/auto/life insurance, sports team costs, and allowances for gifts, holidays, children’s birthday parties and vacations.

What is a budget? A budget is an estimation of income and expenses over a specified future period of time. Determine the minimum amount of money that is necessary to meet your basic needs for food, shelter and transportation. Once you have your basic needs outlined, determine what other activities are important to your lifestyle. Some examples are gym memberships, activities for your children and annual trips to see family members. It is easy to live within your means when you are monitoring your income and expenses.

Will you need a new place to live? Thinking of moving to the city, or the lake? Are you tempted to buy the sports car your spouse never approved of? Freedom from having to check in with a disagreeable spouse can be intoxicating, but it is important not to make any large purchases while in the marital transition process. Make sure that you have a true picture of your finances as a single person or the head of a household before you make any big financial decisions that will have repercussions for years to come.

What is my first priority? Do I need to stay in the marital house or just stay in the same school district for the children? What can I afford for my living expenses? If the children are out of the home, do I want the responsibilities of a large house? If you are near retirement age, will you want the freedom to travel? Or are you considering a career change? What are some big expenses still looming in the near future (college tuition, professional degrees for you or your children)? Make a list of your priorities, then set it aside and review it in a few weeks. When you revisit the list, make sure your priorities still align with your budget and your goals. Allow yourself the flexibility to change your priorities, but always work within your budget.

Once you start talking about marital transition, suddenly everyone will have an opinion on how you should approach things, what you should receive in the divorce settlement, and so on. You will hear stories about family members how their divorce ended, both good and bad. Aunt Sally was married for 25 years and got maintenance for life; my sister Sue just wanted out of her marriage so she left, then had to file bankruptcy two years later; Cindy had to give up everything while Bob still belonged to the Country Club, or Bob lost everything and lives in a rundown pre-furnished apartment while his ex-wife took the kids to another state and remarried a wealthy man. There are laws in place to protect both parties, no two divorces are the same, and remember, there are no cookie-cutter one-size-fits-all solutions to the division of marital assets. (This is where the education from Tip #2, above, fits in.) People usually mean well, but their advice may not be appropriate for your situation or the state you live in, and taking in the opinions of too many other people can cloud your own judgment when making important decisions.

Yes, it’s a roller coaster ride, especially if infidelity is involved. Taking extreme positions, however, like seeking revenge through your financial demands or walking away with nothing because you feel so hurt or helpless, will not be the best for you in the long haul. Dealing with the end of a relationship is always difficult and it takes time to process all of the emotions you are feeling. Allow yourself time to process the loss. It is okay to grieve for a failed relationship. But make smart decisions and be aware of the impact any actions or agreements will have on your future. Education, not emotion, should be your guide.

There is no shortage of professionally trained, highly skilled people who can help you survive during, and thrive after, the divorce process. From counselors and therapists to attorneys to accountants and certified divorce financial analysts, you need to surround yourself with people you feel comfortable opening up to and who have your best interest at heart, and the means by which to secure it for you. Yes, you need a village. It’s important that your team aligns with your needs and values. Make sure that you interview and meet with the professional prior to hiring them to make sure they are a good fit for your situation. Your divorce team could consist of a mental health therapist, a divorce support group, a personal trainer, divorce coach, lawyer and CDFA® to help you reach all of your personal and financial goals