There’s no doubt about it; when children are involved, divorce gets more complicated. Hopefully both parents will feel the responsibility of making sure their children’s future is secure in every way possible. Once the smoke clears, and you’ve negotiated about things like orthodontics and drama camp, you’ll realize that money is the measuring stick your kid’s financial future will be determined by. So, let’s circumvent that hard lesson and cut to the chase before you even play the divorce card.
Once You’ve Decided
When you’re in the big middle of the negotiations for custody, alimony and child support, and who gets the parakeet, is not the time to waver about financial decisions. The more you have prepared in advance, the easier it will be to give educated and logical reasons to justify the things you are asking for. What is decided at that table in the attorney’s office, court, or at your breakfast nook, will determine the lifestyle you’ll probably all be stuck with, as well as the financial future of your children.
I probably don’t need to tell you that going through a divorce is expensive, time consuming and can suck the life out of you. Have you noticed that divorce affects every part of your existence: job, friends, children, religious associations and maybe even your self-worth? You are bound to feel anger, frustration, grief and fear; and that’s okay. There are things you can do to feel better. Yes, we may be talking chocolate here.
Begin by accepting the fact that everything isn’t going to improve overnight. Pamper yourself a little. Go to that Thai place where your spouse never wanted to eat. Set up your kitchen or den exactly how you want. Maybe get rid of the moose head over the fireplace. Do the things that make you feel good, whether it’s dinner on a tray while you watch the game, or a long soak in a hot bubble bath with aromatic candles flickering. Whatever works for you.
Now that you’re fortified, let’s take a look at some things you may need to know.
Cold, Hard Facts
In the United States, according to the Internal Revenue Service, 29% of recently separated women and 21% of recently divorced women live in poverty. Conversely, 12% of recently separated men live in poverty. Divorced women and their children are more likely to continue living within the poverty levels for a longer period of time. This financial decline makes sense when you think of it. Isn’t it cheaper for two people to live in one house rather than separate living quarters? Share a car? Sometimes divide up childcare responsibilities instead of paying for daycare? And of course there’s the cost of the divorce itself, especially the legal expenses, as well as moving expenses, and setting up an additional household. This all needs to be taken into consideration.
When a couple is married, their combined income, or perhaps just one income, is usually shared jointly. But whoever the major earner is, will probably be unwilling or maybe unable to give 50% of his/her earnings over to the former partner, no matter who has been awarded custody of the children
Now’s the time to get serious
Whether you are the mother or the father, the wage earner, the highest dollar contributor, the most attentive parent, or the one that is the most responsible adult, make a stand for your children’s well-being. Maybe that’ll mean granting custody to your ex spouse, agreeing to joint custody, or claiming custody for yourself. It’s going to be hard enough for your children to see the family they probably thought would always be there, split apart. Whatever a parent can do to make the transition as smooth as possible, yet ensure the children’s financial future, will pay off in the long run.
Here are some of the ways to ready yourself financially to protect the future of your children.
1) Educate yourself. Read Stop Marrying Mistakes and order the comprehensive, informative and detailed CDs: Thriving After Divorce Audio Program, both available at: www.stopmarryingmistakes.com .
2) Find a good attorney who will also stand up for your children. When you are considering a specific lawyer, ask if he or she has had experience focusing on children’s issues, and be sure to ask for references. When parents are unable to agree concerning their children, even if a mediator counsels them, the judge may appoint a guardian ad litem who will investigate the facts and take a position in court on legal custody and placement. The GAL also may become involved in the financial aspect of a case when it affects the children.
3) Establish a plan so that when you go into negotiations you will know what you want for your children in advance. It’s advisable to get a second opinion on your plan before you enter into discussions.
4) Keep as objective as possible. Divorce is a very personal and emotion-provoking process. If you can keep the majority of the negotiating procedure focused on what is best for your children, who knows, your example may rub off.
5) Make copies of all financial accounts, such as checking, savings, brokerage, IRAs, pension plans, and insurance papers involving you and your children. Be sure you have the latest information, including account numbers and addresses. If money mysteriously disappears, you’ll have the paperwork to prove the original amounts were there.
6) If your spouse owns a business, or if you own one jointly, get involved. Find out as much about the financial side as you can. Your spouse could try to make the business look worse than it is, and that could hurt you and your children financially.
7) Make a list of all the joint and individual assets you have, including real estate, jewelry, collectables, furniture, cars, boats etc. It is important to know whether these items were purchased or received during your marriage or before you got hitched.
8) Save, save, save money for a “Rainy Day” fund. Enough cash to cover two months of living expenses is a good rule of thumb. Try to put money aside to use during the divorce as well, and establish a back-up plan in case you run out, such as: borrowing from family members, items you think you can sell etc.
9) Pull out that prenup if you have one. Review it and make sure your attorney examines what it contains because it could make a huge difference in your negotiations.
10) If you haven’t established credit, work to start it and make sure it’s in YOUR name only. This isn’t always easy, but very important. It can be as simple as applying for a credit card from a local department store.
11) Now’s the time to start keeping a diary of your expenses and the receipts that go with them. One of the first things an attorney will ask you is to list your expenses along with your assets, which should include things like houses and boats, as well as refrigerators and washing machines, food processor, tools etc.
12) It’s time to cancel joint credit cards. You know what could happen; your spouse goes shopping and you end up with half the debt. As soon as divorce is a sure thing, notify your creditors.
13) Take out an ad in the Public Notices section of your newspaper stating you are no longer responsible for the future debts of your spouse. This is something to do when you know for certain you are splitting.
14) Make sure your car is in good working order, has had a recent tune-up, is registered and that you are included on the title.
15) If your health benefits are received through your spouse’s employment, get checkups for you and your children and make sure your prescriptions have recently been filled. Then find out how a separation or divorce will affect the insurance plan.
16) Do not move out of your house unless you have talked to your attorney or it is unsafe to stay. It’s always easier to keep something you have than to force your spouse to give it back. If possible, don’t allow your spouse to leave with the children.
17) Although it may sound cold, timing is important. If your spouse is about to take a new job or get a raise, hold off the separation until after this has occurred. The increase in salary will then be calculated when the amount of child support and/or alimony is figured.
18) Are you employed or employable? Unless you’re divorcing Brad Pitt, you may have to earn your own living, so now is the time to get to work on that.
19) If you and your future ex don’t get along, consider mediation. This divorce option can save you money and help things to happen much more smoothly.
20) Get your hands on the important papers related to your children—birth certificates, diplomas, pictures etc. Make copies of what you can. Be sure to document the Social Security numbers of your children. Better yet, you can order duplicate cards so that each parent can have a copy. This can especially come in handy if one of you is required to provide the original Social Security card for your child.
21) If any domestic violence occurs toward you or your children, be sure to call the police and make certain a report is written and filed. Have a doctor examine whomever the abuse was enacted on, and get a copy of the results of the examination. Be sure pictures of any injuries are taken at the doctor’s office, emergency room or police station.
22) Keep your life open to scrutiny. Do nothing illegal or underhanded.
23) This is not the time to rely on drugs or alcohol. Keep a clear head.
24) Sometimes one partner handles the financial matters. If your partner is the one who carries this responsibility, it’s time for you to step up.
25) Open your own bank account.
26) Place a “freeze” on your joint checking and savings accounts.
27) Open your own safe deposit box to store the papers you copied.
28) Be proactive. Look into things like property tax. Don’t forget your Federal taxes. Determine who will claim the children on their income tax yearly. (Some couples have found that dividing the children, by alternating ages, works). Be sure to cover these nasty subjects during your divorce negotiations.
29) Think ahead to college, weddings, long-term health issues, summer camp, vacations, special classes, dental or orthodontic care, chiropractic treatments, therapy and life coach expenses, and whatever is applicable or may become so in your child’s future.
30) Track your children’s expenses for a few months and project what it would take to maintain their financial mode of living into the future.
31) Order your credit reports right away. Go to: www.annualcreditreport.com Check every single thing on these reports. Make sure all information is accurate. Then notify the three credit bureaus: Experian, Transunion and Equifax, that your marital status has changed.
Your attorney will let you know what you should do to prepare for divorce and protect your children financially. The information in this article and on the Stop Marrying Mistakes website is not complete nor should it take the place of hiring an attorney. But it can give you an idea of the type of actions you can take to protect yourself and your children when it comes to money. It doesn’t matter if you will be the custodial parent or not. The steps you take early on will safeguard your position, perhaps enable you to function at a higher level, and give you the comfort of knowing you did your very best for your children.
The subject of protecting your children financially has been divided into two articles in the Stop Marrying Mistakes website. The companion article to this one is Keeping in Step With Financially Safeguarding Your Children After Divorce. Also, check out Stepping Into the World of Child Support for a more thorough study of how to protect your children financially in the years to come. Though most major financial issues are settled once the divorce papers are signed, matters involving money are bound to resurface.
Now that you’ve learned the proactive steps you can take to protect yourself and your children, and prepare for your futures, the ball’s in your court. While working to come to the decision of whether or not to divorce, consider talking to a therapist, life coach, clergy or maybe a good and wise friend. If you feel your marriage is worth saving, make an appointment with a marriage counselor. If you’re thinking, “They’re too expensive,” get real about the bottom-line cost of divorce.
Once you’ve weighed your options and talked your situation over with someone you trust, give it some time. If or when you make up your mind to go through with a divorce, consider working hard to keep your relationship with your soon-to-be ex on a non-hostile footing. After all, you will probably be dealing with this person for years to come. It’s hard enough to raise children alone without carrying around negative energy about sensitive issues that came up during the divorce negotiations. Good luck.