Divorce can be a time of uncertainty for both parties involved. While some individuals may have questions relating to paying spousal support or whether they can make it on their own, others may worry about the emotional impact divorce will have on their children. The Association of Divorce Financial Planners says that divorce planning can take some of the fear out of the process by clarifying options and helping to establish priorities.
Types of Divorce Planning
Karen Grayson-Rodgers, a divorce attorney based in Fairfield, New Jersey, points out that while there are several different approaches to planning a divorce, the best method depends on the relationship between the parties. Rodgers explains that mediation is the least expensive for couples who are able to work together amicably to come to an agreement on financial issues and a parenting plan. Collaboration is another method of divorce planning that involves parties cooperatively exchanging information, and then negotiating the issues until they reach an agreement. For couples who want to avoid formal litigation but are unable to communicate well, four-way settlement conferences include both parties with their independent lawyers.
First Step
Brette Sember, a former divorce attorney and author of "The Divorce Organizer and Planner," suggests that parties begin planning for divorce by consulting with an attorney who specializes in family law. Many attorneys offer free initial consultations that give spouses the opportunity to get basic information about the divorce laws for that state. Policies can vary depending on the jurisdiction where the divorce action will be pending.
Assessing Finances
Allocating finances requires that couples obtain copies of documents relating to all assets and debts. These include copies of real estate deeds, vehicle titles, tax returns, insurance policies, pay stubs, and recent bank, investment and credit card statements. Parties should also take an inventory of personal property and the contents of the family home. Beth Vogelsang, a board certified marital and family law attorney in Fort Myers, Texas emphasizes that early and full disclosure of financial records is the quickest way to get to the settlement table. Vogelsang explains that liabilities acquired during the marriage are generally considered to be marital debts regardless of who incurred them.
Benefits of Divorce Planning
Patricia Barrett, a certified divorce financial analyst, underscores that while there are a number of benefits to divorce planning, the process can give both parties a better understanding of their current and future financial situations. Spouses have the option of working together to agree on an equitable property settlement. The parties can also resolve issues related to child support and the division of pension benefits and other deferred assets.
Misconceptions
When it comes to divorce, a pension does not necessarily remain the individual property of the person earning it. According to the American Bar Association, pension benefits can be a valuable asset in planning a divorce. In most states, pension benefits are considered to be part of the marital assets to be divided, and therefore, a spouse may be entitled to receive a share of the pension benefits. Although state laws vary regarding how private or government pension benefits are divided in divorce, a portion of the pension benefits earned during a marriage can go to the other spouse.
References
- ADFP: Divorce Financial Planning
- Karen N. Grayson-Rodgers, Esq.; The Salvo Law Firm, P.C.; Fairfield, New Jersey
- Brette McWhorter Sember; Career Press; Franklin Lakes, New Jersey
- Beth T. Vogelsang, J.D.; Henderson Franklin, Attorneys at Law; Fort Myers, Texas
- Lifetime Planning: Your Guide Through the Financial Maze of Divorce
