Divorce Preplanning Strategies
By Maury D. Beaulier, Esq.
Nobody marries with the
expectation of failure. Married couples never contemplate that the person they
once loved could later seem to be a stranger and perhaps even an enemy. Yet,
statistics paint an ugly picture. Approximately four out of 10 marriages today
end in divorce. In divorce proceedings, women lose financially, their standard
of living may drop as much as thirty percent in the first year following a
divorce. Men, may not suffer as great financially, however, they tend to lose
precious time with their children.
ONE: Keep Non-Marital Assets
One of the greatest contributors to divorce is the issue of "control" - either
financial or personal. Who controls the bank account? Who sets the social
agenda? When one partner to a marriage "controls", the other partner loses their
sense of self. A divorce becomes imminent as they controlled partner tries to
regain their self-esteem.
There are several simple and logical ways to protect yourself financially if you
believe your marriage is in jeopardy:
Non-marital assets are not part of the assets divided in a divorce. Instead,
they are considered the asset of either the husband or the wife and generally
awarded to that person in a divorce proceeding. Categories of non-marital assets
If non-marital assets are commingled with assets purchased or improved
during the marriage, it may not be possible to claim the asset as yours in
the event of divorce. However, some "tracing" of non-marital assets may be
possible. For example, if a non-marital asset is sold during the marriage
and the proceeds from the sale are used to purchase another asset, it may be
possible to "trace" a non-marital interest in the new asset. For example, if
a car owned before a marriage is sold during the marriage and the proceeds
used to purchase a new vehicle, a party may be able to claim a non-marital
interest in the new vehicle. To do so, it is very important to retain all
documents demonstrating the sale of the asset and the use of the proceeds
realized from the sale.
- property you inherit;
- proceeds from personal injury awards (eg. Worker's compensation or
- items owned prior to marriage; and
- gifts to one party rather than the family.
TWO: Establish Your Own Credit
Make sure your name is listed on all household accounts and investments.
Establish at least one credit card in your own name. This will help to
create an individual credit history. When you are on your own, you will have
a better chance qualifying for loans, mortgages and credit cards. These are
all important considerations after a divorce.
THREE: Review Your Financial
Maintain complete and separate records of your financial holdings such as
bank accounts, IRA's, 401K, land purchases, and stocks. This includes assets
in your spouse's name as well. You may wish to maintain copies of these
records at your place of employment or in a safety deposit box in your name.
Records have a way of disappearing after a divorce has been started.
FOUR: Time Your Divorce
The timing of your divorce may carry with it a significant financial impact.
For example, in a single income family, the non-working spouse may not have
earned enough money to qualify for Social Security at the age of retirement.
However, if spouses are married at least 10 years and don't remarry, the
non-earning spouse may qualify for Social Security benefits based on the
ex-spouse's earnings when both reach the age of 62.
FIVE: Close Joint Accounts
If a divorce is imminent, you should immediately contact joint-credit-card
companies in writing to freeze or cancel your joint accounts. You do not
want to be responsible for your spouses' new credit card charges,
particularly when those charges may include attorney's fees. This protects
your credit. It is important to remember that, although a creditor may
freeze a joint account, the outstanding balance must be paid off before the
account can be closed.
You may also wish to close your joint bank accounts. If any proceeds are
removed, keep a carefully accounting where the money is placed or how the
proceeds are spent. You will undoubtedly be asked for that accounting as
part of the divorce process. You can save yourself time and money by keeping
Hire an Experienced
It may be very important to hire a good lawyer early in your divorce
planning process. An experienced attorney can help you avoid mistakes that
could later cost you in your divorce proceeding. There are many lawyers to
choose from so it is important that you ask important questions in order to
choose one that is knowledgeable and right for you. Ask about their
experience in family practice and specifically divorce. Ask the attorney to
explain the legal issues as well as the legal process in your particular
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appropriate professional advice about your particular situation and facts.
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