Divorce is typically wrought with extreme emotional and financial turbulence.
In particular, the histories that bound couples, families, friends and home life are disrupted. Standards of living are often changed, not just for spouses, but for the children as well. What once appeared to be a clear financial path to the future is now a rocky road.
Here are five steps to help give you an orderly way of approaching divorce.
Step 1: Before you get too emotional to think and act rationally, remember what brought the two of you together in marriage. Commit to work with your spouse towards an amicable settlement that reflects your family’s goals and needs throughout the divorce process.
Step 2: Read up on the different ways to get divorced, including the Collaborative Divorce model. If the latter makes sense to you, compile a list of attorneys to meet with and see who best matches your own needs. In a Collaborative Divorce, each spouse has a separate attorney to facilitate the open exchange of ideas and solutions between them, instead of between the attorneys and a judge in a court of law. When spouses have good communication, and emotional issues are facilitated by a divorce coach, the couple is more likely to develop mutually beneficial solutions. A Collaborative Divorce, instead of the more time-consuming and money-consuming divorce litigation process, can protect your financial and emotional assets – and those of your children.
Step 3: Gather together copies of all financial statements (bank records, investments, etc.), including separate and joint account statements. Include business returns as well. This will help you and your spouse stay ‘financially neutral’ when meeting with a financial neutral/Certified Divorce Financial Analyst.
Step 4: Discuss with your spouse how to handle joint funds for home maintenance, auto repairs, and immediate medical and dental needs – and how these expenses should be paid. You want to ensure communication is open so the Collaborative Divorce process can be effective, and not question the misuse of funds.
Step 5: Review with your spouse your current budget as a family unit and discuss what changes need to be made going forward as two families. Two households cost more to run. If funds are limited, you may need to make lifestyle changes when divorced. You will need to prepare a post-divorce budget for each of you. The Certified Divorce Financial Analyst can assist you with this endeavor.
As divorces go, the best divorce is one that preserves the respect of the children and each other while working under a settlement that the parties have developed together with the help of their attorneys and financial-neutral advisors.
Filed in: Finances and the Financial Neutral