Gather Documents and Financial Information
It is very important to properly gather the documents and the financial information before you start any conversation. This will help you to clarify your situation and to present a united and accurate front to your lawyer.
The information you will need to gather from your spouse will include:
- Assets and property
- Employment status
Hire Appropriate Professional Help
Alimony and Child Support
If either spouse earns a lot more than the other, this topic is important. Many courts award temporary alimony to the lower-earning spouse until child custody is settled. In the final divorce decree, the judge may order that both alimony and child support end at a specific time.
But not every court requires it. Properly calculating child and spousal support is a complex matter beyond the scope of this article. If the judge is allowing one or both types of support, be sure you understand any court order.
Retirement Plans and Social Security
The timing of retirement accounts and Social Security can be driven by your age at the time of divorce. If you are not yet receiving Social Security benefits and you were born in 1952 or later, the year you reach your full retirement age (67 for most married couples) is also the year when you can take distributions from traditional IRA accounts.
However, if you take money out of your traditional IRA before the year you reach full retirement age, you’ll pay a 10 percent penalty of the amount distributed as an early withdrawal.
The same penalty applies if you take funds out of a qualified retirement plan after you retire.
Get Your Individual Financial House in Order
Any divorce is a negotiation, and finances are one of the the things that will be negotiated. So your starting point will be to have your own finances in order prior to getting divorced.
One of the best ways to make sure you are in a good position to negotiate is to restructure your finances to the point where you can truly live off one income (or even part of one income). Changing your spending now will help you to negotiate a settlement with less risk of going into debt later.
Also, be sure to take a good, hard look at your expenses. If your expenses are not saving you any money in the future (like a car payment), then its probably worth considering getting rid of it.
If children are involved, here is a great cost savings calculator for divorce with minor children.
Have a Plan
So you are one of the estimated 42% of married couples who peak at 50% in the ever-increasing rate of divorce in Western culture. You will be the new divorce expert of your social circle (and will receive great sympathy if you are a man). But, hey, you can turn this to your advantage by doing some studying on the subject and become the person to go to for guidance.
Because getting a divorce is never easy and it affects you financially. That’s why you will need to have a plan that you can stand by.