Before Filing for Divorce, Consider these Five Tips to Improve the Outcome
Just like a coach designs the game plan long before the players ever hit the field, you need to position yourself for the best possible outcome long before you actually file for divorce. If you don’t protect yourself before you make the big announcement, you may lose things you can’t get back in court later.
“I have seen cases where the expensive earrings and the Renoir went missing as soon as a spouse announces they want a divorce,” says Mary Beth Long, a Richmond, Virginia-based family law attorney. Better to make preparations now to protect your interests rather than relying on a partner’s honesty and credibility later — especially during the stage of divorce when emotions typically run high. To make sure your game plan covers all the bases, here are five things to consider before filing for divorce:
1. Follow the money.
Track down every asset and know its true value. Sometimes you will guess the value too low or too high; either scenario can cost you dearly. Now is the time to discover hidden assets as well. The assets your spouse controls — and may not often discuss with you — may not actually be hidden at the moment but they might be shortly after you say you are leaving.
“List all assets and liabilities of each party and gather tax returns for each party and any partnerships/businesses/professional practices that either owns,” advises Long. “A supporting document for each asset/liability and its balance/value is nice, too. Like a year-end brokerage, retirement statement, etc. Before one can divide up the fruit of the partnership, one must know what is there.”
“Your financial documents such as credit card statements, tax returns, bank statements, etc. will be crucial in determining an appropriate settlement,” concurs Brian McFadden-DiNicola, Esq., an attorney with a specialty firm limiting its practice to family law matters based in New Jersey. “You need to have those documents on hand before you go see an attorney.”
“If you have valuable tangibles — such as art, jewelry, furniture, other stuff in your house — consider going ahead and getting an appraisal before anyone has openly talked of divorce,” adds Long. “An appraisal can be used to value items AND inventory them, just in case you need to prove these things later.” However, keep in mind that not all possessions are easily appraised.
“Are there difficult valuation problems with your assets? This will be a determining factor on whether you hire someone who does routine divorces or if you need someone highly specialized that knows and understands what information will be needed,” advises DiNicola.
“If either spouse owns a closely held [business], partnership, [or] professional practice, a forensic CPA may be helpful to determine the value,” continues Long. “The spouse who owns it will usually say it is worth nothing but this is probably not true. Let a CPA who has done such work before have a look.”
“Each state’s laws on property distribution are different. There are, for instance, some states where a 50/50 split of assets is assumed and that is not so in other states, like in Virginia where there is no presumption of a 50/50 split,” says Long. See a lawyer in your state if you or your spouse has assets worth being concerned about. On the flip side, get a credit report on both of you so you can see and track debts, as well as assets, that you may not have known existed.
2. Think about spousal support.
“The tax returns you gather will help with determining if spousal support is an issue. But there are other things to consider as well such as whether your spouse will need to obtain health insurance. For example: is COBRA an option? If so, what will it cost and who will pay for it?” asks Long. You also need a firm understanding of the costs of your current lifestyle.
“If you do not know your monthly finances, that is, what’s coming in and what’s going out, you will have no idea how much a potential alimony obligation will be,” says DiNicola. “Thus, from the start, you will not know what is an acceptable settlement offer and may spend months and months in discovery and legal fees.”
“Since each state’s laws are a bit different here, too, consult an attorney to determine what child support is likely to equal in real dollars. In my state, Virginia, a fairly straight-forward formula is used to calculate child support in typical cases. You can get an idea about it from the Virginia Department of Child Support Enforcement website. Work related daycare costs and health insurance should be included in the calculation,” confides Long.
“Beware, however, that the guidelines for child support DO have exceptions and may not apply in cases with high incomes or very low incomes and in other unusual cases,” she warns.
“Easing the stress on children at the time of the break-up — as opposed to afterward — will protect children from emotional damage and possibly strengthen your case in a custody suit. Think about seeing a counselor to minimize the impact on the children. Get some books on the topic. Use the counselor to help you and your spouse to develop a parenting plan and custody issues,” advises Long.
4. Weigh venue options.
“Each state’s laws about divorce are different and it may behoove you to investigate which set of laws most favor you. I have had clients who have been eligible to file in two different states and they were smart — they consulted lawyers in each and then filed suit in the state that was better for them,” says Long.
5. Consider mediation.
“Look into mediation as an alternative to court as it can be a cheaper and faster route to divorce. Litigation is going to take a long time and cost a lot of money quickly. If you can go to a qualified mediator beforehand, it will save you,” says DiNicola.
“You cannot easily predict a court decision,” agrees Cathy Cowin, an attorney and mediator in Fresno, California. “Court is handing over control to a third party. Try to maintain control of the decision yourself through a negotiated or mediated outcome.”
“Mediation requires good faith effort on both sides of the table. If you and your spouse can be civil and would like to mediate, ask the lawyer about mediation options and for a referral to a good mediator in your town,” suggests Long.
“Stay focused on reaching an amicable split and realize that there is no way to divide assets and come out richer than you started. Try to understand what your soon-to-be-ex-spouse wants in the divorce proceeding. If you can understand what they want, you are in a much better position of tailoring a reasonable settlement,” counsels DiNicola. “Provided, of course, that what they want is rational.”
“Even if you do decide to mediate, you still need a lawyer on hand. If you come to terms, hire the lawyer to draft or at least look at the contract before you sign it,” advises Long. “While mediation is a cheaper and better deal for both sides, it won’t work for everyone. If your spouse is not going to be easy to deal with, go ahead and retain an attorney and prepare for court,” says Long.
