When You’re Better Off Apart

Don't allow your financial security to become a casualty of divorce

Karen Saunders-Kildare wanted to take care of someone. while her husband attended college, she took on the role of primary household earner and handled all of the couple’s finances. When her spouse completed his studies and landed a job, he also took an interest in another woman. Three years of marriage ended in a devastating divorce that left Saunders-Kildare heartbroken and just plain broke. “Divorce was the worst thing that happened to me financially,” says Saunders-Kildare, 42, whose second marriage to a man 10 years her junior ended in 2000.

Saunders-Kildare says her husband stuck around long enough to get his college degree and charge several thousand dollars to her credit card. He didn’t make a single mortgage payment, yet he left the marriage with furnishings and half of the equity in the home her parents helped them purchase. “I was done. I was robbed blind,” says the Lincoln, Nebraska, teacher.

Now, she’s starting to recover. Saunders-Kildare refinanced the mortgage so she could buy out her husband’s share of the house (valued at $106,000) and pay off $5,000 in credit card debt and legal fees. She says she’s no longer bitter and admits that she rushed into marriage because she was pregnant with their son, who is now 5 years old. (She also has a 15-year-old daughter from her first marriage.)

Saunders-Kildare faces some rather daunting challenges as she attempts to rebuild her financial life. She earns $32,000, so she has a small amount of savings for future goals such as her retirement and her daughter’s college education. “I’m a fighter,” says Saunders-Kildare. “I wake up and say, ‘Wow, I’m still standing. I have a job; life goes on.’”

DEALING WITH DIVORCE
There is life after divorce. It is a dramatic shift, however, from life as a couple. Statistics reveal that half of all marriages end in divorce, and when a woman’s income significantly declines, so does her standard of living. Flying solo presents myriad challenges. “[Approximately] 5% of divorce is about child-sharing issues and the other 95% is about money. The problem is that there isn’t enough to go around,” says Ginita Wall, a San Diego CPA and certified financial planner who specializes in divorce issues. “Divorce is the biggest financial transaction in your life.”

DON’T BE TAKEN BY SURPRISE
Divorce usually doesn’t happen overnight. In fact, you may be the one to initiate the proceedings. Either way, the decision to split should not be a hasty one. “You don’t want to operate without a game plan in the heat of the moment,” says Kathleen Williams, president of Oklahoma City-based Williams Financial Services Group Inc.

First, gain an accurate financial picture so that you know the best way to divide your assets. You’ll need records to determine the amount of income that must be set aside for alimony or child support and who will be responsible for those financial obligations. You can build your case by rounding up documents such as tax returns, deeds, contracts, insurance policies, bank and brokerage statements, and outstanding credit card bills.

Wall

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