In my experience, many people consider divorce for a lengthy period of time before taking that huge life-altering step. It is not unusual for me to meet with a potential client to discuss the divorce process and then not hear from the person for months – or even years – that the client is now ready to retain my services and file. Whenever I am able to do so, I like to provide a person contemplating divorce with some guidelines to assist in preparing themselves. There are many steps a person can take to prepare for divorce. Happily, none of these steps will sabotage efforts to improve the marriage and ultimately make the happy decision that a divorce is unnecessary after all. Many of these planning tips are based on common sense, but many appear counter-intuitive to the potential client. Here are a few pre-divorce planning tips that may help smooth the transition should you decide that you must end your marriage. All of my tips are based on the premise that the income that has supported one home must support two homes post-divorce. That means that each party will have less resources to meet financial obligations after the divorce is finalized.
- One of the most important things you can do is avoid large purchases, particularly those that involve taking on debt, or borrowing against otherwise available equity in the marriage (such as the net value of your home or your retirement accounts). Some people believe that if they want to buy something major, they had better do it before filing, but this is wrong thinking. The general rule in a divorce is “you take the property, you take the debt attached to that property.” If you are not going to be able to afford that debt, don’t buy the item on credit and then file for divorce. You are likely to be disappointed in the outcome and burdened with debt that will drain your resources. Pre-divorce it the wrong time to buy a new car or that boat you always wanted!
- Familiarize yourself with all the expenses and all the assets in your household. It is not uncommon for me to see clients who have either total control of this information or who have been kept in the dark while the other spouse controls the purse strings. Pre-divorce is the time to do your snooping. Make copies of all the bills; go through the household financial papers and make copies of bank and investment statements. Know how much it costs to support your family and what assets you own or may have an interest in as part of your divorce settlement. It bears noting that the more information you bring your divorce attorney, the less work the attorney must do to discover the information, which makes for a less expensive divorce process.
- If you have been married for almost, but not quite ten years, hold on! At ten years you will have a vested interest in your spouse’s social security retirement and if you are the secondary (lesser) wage-earner, this is important for you.
- Do not devote substantial resources to paying off debt that is attached to property purchased by your spouse or for your spouse, especially if the debt is in your spouse’s name alone. The likelihood is your spouse will be awarded that property in a divorce and the debt will then be his/hers to pay. Try to keep those monthly payments to a minimum.
- Familiarize yourself, to the best of your ability, with all of your spouse’s employment benefits, including details concerning salary, bonuses, pension plans, life insurance, health insurance, etc. Pay attention to when bonuses are paid. No doubt your spouse who earns more money or on whom you may be entirely dependent, will seek to defer bonuses until after a divorce in an effort to minimize child support, spousal support or even the amount of property to which you will be entitled.
- Begin to inventory personal property and household furniture, furnishings and appliances. Make sure your inventory is thorough and note which property was purchased by whom before the marriage. Create a “wish list” of which property you might like to take in the divorce, and as to any item you believe you will be challenged, consider what you would say to a judge or mediator about why that particular piece of property should go to you. In doing so, remember that Michigan is an equitable property state, which means that the final division of property should be fair and reasonable to both parties. It is generally not realistic to expect you will be awarded everything or get first choice as to everything.
- You may need to have some property appraised, such as jewelry or art work you know to be of significant value and which may be contested in the divorce.
- If you have been a stay-at-home spouse and/or parent and intend, after the divorce, to return to college or to the job market, investigate and begin designing a plan for implementing this goal. Try to determine what school will cost, or how much money you can realistically expect to earn out of the starting gate. This will help you plan with your divorce attorney for how much alimony you will require and for how long to help you get on your feet.
- If your spouse brings you financial or legal documents to sign, do not do so until (a) you have a thorough explanation as to what the document is and why you are expected to sign and (b) have the opportunity to consult with an attorney. Chances are good that if you are contemplating divorce, so is your spouse. Signing documents that obligate you legally or financially when a divorce is on the horizon is generally not a smart idea.
- Stay in the marital home, especially if there are children to consider. You may not move the children out of the home without a custody order from the court, and if you leave them, it will certainly reflect badly on you in an ensuing custody battle.
These are just a handful of tips to help you with pre-divorce planning. There are many more, but the most important is do not delay in meeting with a family law attorney. S/he will help you plan for your divorce and help you prepare based on the specific facts and circumstances in which you find yourself.