Joan Coullahan is the co author of “Financial Custody: You, Your Money, and Divorce.” The book is organized to take the reader from the start of the divorce process, through settlement negotiations and into their new life, building on the assets received in their settlement agreement. Readers are guided through the financial elements of the process, taught the most effective ways to prepare for negotiations, and how to avoid serious problems that can occur.

Financial Custody is available in Borders Bookstores and online at www.amazon.com.

Joan has authored numerous articles for national and regional publications . Her column, titled “Dollars and Common Sense of Divorce: The Seven Dangerous Mistakes to Avoid”, is printed below.

When a man and woman marry, they plan for many future events such as buying a new house and raising children. Divorce isn’t usually an event that people plan for – it just happens. Therefore, when the marriage is no longer working, a couple is suddenly confronted with countless issues and decisions – issues and decisions they are not prepared to handle. Making educated decisions removes much of the negative emotion from the divorce process. Knowing your legal rights, current and projected financial situations, and how a divorce settlement will affect you five, ten, or twenty years from now, will help you make better decisions now and build a more secure future.

If you, or someone you care about, are going through the divorce process, knowing what NOT to do can be a big help. Throughout my years as a Certified Divorce Financial Analyst, I have worked with many clients. And, the least expensive and emotionally painful divorces were the ones in both people used common sense and avoided the following seven dangerous mistakes.

1. Making legal and financial mistakes based on emotion. Sure, you definitely have a right to be in pain right now, whether you are the one who asked for the divorce or not. A divorce is a major life event, and ranks almost equally with the death of a parent or child. That’s because divorce is a death .. the death of dreams and hopes that started your marriage. Consulting a therapist, counselor or pastor can help you cope with your emotional pain, so you can focus on the legal and financial issues that must be negotiated. Although you have a right to be in emotional pain, it can not be allowed to influence your decisions.

2. Negotiating without all the important information and documents. Divorce causes every personal detail of your life to be laid bare. This means proving your monthly needs through a budget, disclosing the balances you owe on your credit cards, how much or little you have saved in retirement accounts, your mortgage balance, and more. Sometimes one spouse will intentionally withhold vital financial information. When one spouse won’t cooperate, it’s usually a tactic, and a foolish one, as attorneys can force an uncooperative spouse into disclosing information through the discovery process. It is lengthy, expensive, and unpleasant. If you settle without knowing the complete picture, it may result in a poor future relationship with your ex spouse and you may have sold yourself short, financially.

3. Thinking that the divorce process must be adversarial. Divorce can be a “win win” situation. Many people have heard the horror stories of other divorces – the stories where the woman got everything and the man was left with the shirt on his back, or vice versa. The true horror stories are the ones where the husband, wife, or both spent their own child’s college fund paying their attorneys. These cases rarely have a happy ending as people leave the marriage emotionally and financially devastated.

4. Thinking that divorce has to be expensive. There is a real misconception that divorce must cost $10,000 or more per person. This doesn’t have to be the case. When spouses cooperate, they can do much of the basic legwork themselves. This includes listing and agreeing on the division of assets and debts and, agreeing on child custody and support. This keeps costs at a minimum. Attorneys can advise each of you, and then one attorney can prepare a Property Settlement Agreement and the Final Decree of Divorce. Divorce becomes expensive when the spouses can’t work together but most times working together is possible. Sometimes further legal work is required.

5. Not getting professional help. There are many things in life that you can do for yourself, but divorce is not one of them. Just as you wouldn’t perform surgery on yourself, you shouldn’t attempt to learn and perform all of the functions of the divorce process. It just makes good, common sense to seek the knowledge and experience of professionals. It isn’t expensive and can save you from making big mistakes.

6. Not knowing the real value of your assets. Some assets such as checking and savings accounts you can take at face value. However, when valuing assets such as government, military and teachers pensions and, rental property it is much different. Defined benefit pensions are usually worth many times more than just the contributions and earnings. Rental property is often worth less than fair market value because of potential capital gain taxes. It pays to dig deep and find the true values.

7. Not controlling the process. If you haven’t been through the divorce process before, it can be a very complicated and frightening experience. You should become educated and take action in order to help yourself and all professionals who assist you in the process. Make copies of all financial documents, list your assets and debts, read books, scan internet sites, and attend seminars. Persons who take this proactive approach make better decisions and negotiate settlement agreements that are more fair to all involved.

What you have learned in these few paragraphs is invaluable. Not only will this information help you to avoid potential pitfalls but should empower you and assist to lessen the emotional and financial pain of divorce. I can assure you that there is definitely life after divorce and the actions you take now will be the foundation for the future.

top