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Coping With Divorce: Financial Tips for Women

Part two of Glenview Patch's series offers ideas from a financial planning specialist for women getting divorced.

 

The following advice was provided by Robert A. Goshen, CFP and CIMA, of Morgan Stanley Smith Barney. Read part one of our series on divorce.

 

Contemplating or beginning the divorce process is an overwhelming time, so its important to get organized. There are many tasks that you can complete that will help alleviate some of the complexities of the process. Here are just 5 tips to help you get started.

1. Take time to gather detailed documentation of all your financial information; brokerage account statements, bank statements, insurance policies, trust documents,etc. Make copies of this information for your records.

2. Research the various methods for the divorce process. Interview several divorce attorneys and mediators to determine what is right for your situation. Then hire an attorney.

3. Separate joint bank accounts and open accounts in your name only. Be careful as you move money into your name, taking only enough cash to last for a few months. This will allow you to maintain financial independence as you begin the process. This should be done in consultation with your attorney.

4. Open credit cards in your name only so that you have access to credit. Close joint credit cards and place a fraud alert to protect yourself against future charges. Be aware of outstanding or future bills.

5. Track your income and expenses and create a budget for current and future expenses.

Read Part 1: Coping With Divorce: Workshop Offers Empowerment for Women

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Related Topics: Bank Accounts, Credit Cards, Divorce, Financial Planning, Morgan Stanley Smith Barney, divorce attornies, joint bank accounts, mediators, and separate bank accounts
What are some other financial resources you've used when getting divorced? Tell us in the comments.

G Straight

4:41 pm on Wednesday, February 15, 2012

Do NOT give up your ownership in anything that is paid off in your marriage. If you do, claim the name can come off the TITLE after the alimony has been paid in full.
Be sure you realize the opposing side can requests up to 10 years back on your personal information. Fingerprinting for Federal and State records in each place you have lived (which gets expensive to retrieve!) , computer records and all your whole hardrives, health, legal consultations, doctor visits and prescriptions, diary entries, work history, degrees, who you talked about your marriage to and what you shared. All I have written is from my own experience. It costs me $28,000. We were middle class. I now have no job and live in a basement studio apartment, in the middle of nowhere. Be very careful and do your homework.

Reply

G Straight

4:43 pm on Wednesday, February 15, 2012

If you open a separate bank account, make sure spouse can’t request it be frozen until
The Distribution of Goods is agreed. This happen to me and I was thankful I had CASH.
It took 9 months before we got the agreement in writing.
Do your best to have all the credit cards paid off before you go. Otherwise, in many states you owe half.
Be very careful of attorneys who claim to charge a Flat Fee for divorce. They will nickel and dime you for all the printing cost, and other outrageous little incidentals that cost more than an attorney by the hour.
Do NOT tell the attorney in the first interview how much money/assets you both have. I went to 5 attorneys and found they seemed to change their rates on how much they feel you have. NOT FAIR.

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G Straight

4:43 pm on Wednesday, February 15, 2012

Be VERY careful doing emails and phone calls with attorney. They claim in the interview to do things but in truth, the 5 that I hired, would just let me keep writing, and writing again since they ignored my emails only to find they charged to read EACH one. The rate varied between 10 min. and 15 min. of their time PER email because they claimed they had to stop what they were doing, read the email, and think about it. Sometimes, rarely, did they reply. Thousands of dollars went here. INSTEAD, make
A list of your questions and take with you to your next meeting. Lots cheaper!
Get referrals from people on which lawyers to hire. Can’t stress enough.

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G Straight

4:44 pm on Wednesday, February 15, 2012

Do Internet searches on divorce attorneys in your state and see what ‘free’ advice they offer in their blogs and columns BEFORE you leave. This can save you tons of heartache and money. Timing is everything. Before you go. Best situation is not to be the one who leaves without already having a lawyer in place. Otherwise, they could claim abandonment.

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G Straight

4:44 pm on Wednesday, February 15, 2012

Call your State Bar Assoc. and ask what the average mediator charges. Get a list. Call and ask them what they charge. Which lawyers they usually work with.
Make SURE if you get alimony that it has written in the agreement that you will not have to pay Taxes. It can be worded differently. Otherwise, expect to pay 25% more or less each April. Also, if you get a QDRO from spouse’s 401K, make sure to up the amount because of taxes you will have to pay if you withdrawal it early.
Do NOT give up your ownership in anything that is paid off in your marriage. If you do, claim the name can come off the TITLE after the alimony has been paid in full.
Be sure you realize the opposing side can requests up to 10 years back on your personal information. Fingerprinting for Federal and State records in each place you have lived (which gets expensive to retrieve!) , computer records and all your whole hardrives, health, legal consultations, doctor visits and prescriptions, diary entries, work history, degrees, who you talked about your marriage to and what you shared. All I have written is from my own experience. It costs me $28,000. We were middle class. I now have no job and live in a basement studio apartment, in the middle of nowhere. Be very careful and do your homework.

Reply

MJM

8:16 am on Thursday, February 16, 2012

Why would you not pay taxes on alimony? It's income, isn't it? Seems like that'd be difficult to get around -- as they say, there are two certainties in this world: death & taxes!

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Dylan Hecklau

11:21 am on Tuesday, February 28, 2012

If you have specific questions about your financial situation following a divorce, ask the experts on BrightScope: http://www.brightscope.com/financial-planning/advice/

For no cost, you can ask top financial advisors your financial questions. A great resource for anyone going through a divorce, or otherwise.

Best of luck!

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