Are you stuck in an awful marriage and just the thought of Valentine’s Day makes you cringe?
If you are, you might want to do something other than play Love Stinks by The J. Geils Band over and over.
For those thinking about getting divorced, here is some advice from my book, He Said: She Said: A Practical Guide to Finance and Money During Divorce:
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1. Know your financials. Do your best to understand what you have in your bank accounts, retirement funds, pensions and other investments. Find out the details on your insurance policies, home mortgage details and amounts paid in federal and state taxes. Understand the ramifications of selling things like investments and property, as such actions can bring added taxes and tax penalties. Know what debts are owed and even get your credit reports so there are fewer opportunities to be surprised. If you do not know about all these types of information, you will be at a disadvantage.
2. Hire the right professionals. Laws are too complicated and it is too easy to get taken advantage of, so bring in the right partners to help. People getting divorced cannot just trust a friend who has gone through it already, as every situation is unique with its own complications. Build what we call a Circle of Support. This may include a divorce lawyer (or mediator), therapist, a Certified Divorce Financial Analyst, a mortgage broker and a forensic accountant.
3. Prepare to have less money going forward. Splitting the income and assets may seem manageable, but many couples do not factor in the realization that expenses will be getting doubled. From added rent or mortgages to additional utilities payments … these costs add up quickly. Plus, the costs of a divorce can be outrageous. In many cases, we advise our clients to sell their homes, because if they keep them they will become “house poor.”
4. Try to set aside emotions. Too often we see couples pay lawyers thousands of dollars to fight over items that are not valuable at all. It is easier said than done, but it is important to be as rational as possible. Do your best to avoid a long, drawn out, nasty battle. Your feelings will heal, but your financial situation might not.
5. Know the estate plan. Have all the information related to beneficiaries, wills, trusts, power of attorneys, health care proxies and more. Would you want your ex-spouse deciding whether you should stay on life support?
6. Put your children first. If you have kids, make every effort to have them feel loved, safe and not abandoned. Don’t share inappropriate details, but make sure the kids know the divorce is not their fault. It can be a very difficult time for them, so consider getting advice from a counselor and hiring a therapist.
We hope you will not need this guidance and your Valentine’s Day is wonderful. But just in case your situation is not right, then hopefully this advice is helpful.
Barbara Shapiro is the President of HMS Financial Group located in Dedham, Mass. She is a CFP®, Certified Divorce Financial Analyst and a member of the Massachusetts FPA. She is also co-author of He Said: She Said: A Practical Guide to Finance and Money During Divorce.
Her firm specializes in comprehensive financial planning with a subspecialty in divorce that assists clients’ transition from marriage to independence with peace of mind and confidence. Learn more at HMS-Financial.com.
HMS is a Registered Investment Advisor. Securities offered through Cadaret Grant. Member FINRA, SIPC.HMS Financial Group and Cadaret, Grant are separate entities.
Securities and Advisory Services offered through Cadaret, Grant & Co., Inc., a Registered Investment Adviser and Member FINRA/SIPC. HMS Financial Group and Cadaret, Grant & Co., Inc. are separate entities.
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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