also recommends canceling all joint credit cards. Even if the court rules you aren’t responsible for charges made after you separate, the credit card company can hold you liable while financial matters are being sorted out. If you don’t have credit in your name, apply for it immediately.
CONQUER THE PROCESS
Don’t go it alone. At a minimum, you’ll need a topflight attorney, a financial advisor, and a certified divorce planner. The best recommendations may come from friends and family who have been through the divorce process. You can also consult www.divorcemagazine.com or the College for Divorce Specialists (www.cdscollege.net). “Assume everything is fair game, no matter who owns it,” says Mari Adam, a certified financial planner with Adam Financial Associates in Boca Raton, Florida.
“Divorce isn’t fair,” says Wall, a director of Women’s Institute for Financial Education (www.wife.org) and a board member for the GE Center for Financial Learning (www.financiallearning.com). “It’s fought in an arena that you don’t really understand, with money you don’t really have, and you’re fighting for a prize that can’t be enough. Figure out what’s most important and let the rest go.”
Think twice about the house. Women often want the house, which can be a big mistake, says Kay Maxwell, a certified financial planner with Maxwell Financial Services Inc., a Dallas-based registered investment advisor. “You have to ask yourself if you can really afford the house. It’s not just the mortgage, but the maintenance, taxes, and all the hassles,” she says. Furthermore, weigh keeping the house against other assets. You may be better off selling the house and dividing the proceeds.
Be careful about waiving rights. So much is final in the divorce process, with the exception of child support. If you waive your right to alimony—often awarded for marriages of 10 years or more—you’ll never get that option again. But be aware that alimony is considered taxable income. You should consider taking your alimony as a lump sum instead of monthly since 50% of ex-spouses default on alimony payments.
Be thorough when you review other income-producing arrangements. Understand that all child support agreements aren’t ironclad. “Child support can be taken away in the next month,” says Adam. (Child support payments are not taxable income or deductible.) If you’re fortunate enough to get a chunk of your ex-spouse’s retirement account, make sure it’s under your control. “It has to last,” she says. “What matters is that the money should be able to produce income for you.”
MOVE ON
The hard work doesn’t end once your divorce is final. Without question, you’ll need to overhaul your finances. If you’ve never structured a budget, now is the time. You may find that the reduction in income leaves you with less wiggle room, so you must be prepared to do more with less. “You may have to take your children out of private school, choose a cheaper summer camp, or otherwise downsize,” says Adam. “You may find that you need to take a job if you weren’t working before, or take a second job.”
Re-evaluate your