Protecting Your Finances While Dealing With Your Finance

Navigating the emotional and financial minefield of divorce is one of the toughest things you’ll ever do.

Here’s a somewhat disheartening and sobering fact: the divorce rate in Canada has doubled from that of the early 70s. While the legalities of getting a divorce may have become somewhat easier in the past 30 years, the financial ramifications remain the most intimidating and potentially devastating aspect of ending a significant life partnership.

But with proper planning and expert help from professionals specializing in financially equitable divorce settlements, you can increase your chances of arriving at a settlement that fully addresses your long-term financial needs.

Developing comprehensive insight of the short-and long-term financial effects of divorce can save valuable time, money and distress, especially if the process is conducted early in the legal proceedings. Many separating couples seek individual legal assistance before assessing their financial situation. While lawyers serve a crucial role as individual legal advocates, they are not necessarily there to explain financial consequences in detail.

Misinformation and misconceptions about the divorce process can be detrimental. Many have false expectations that they will be able to secure a divorce settlement allowing them to continue with their accustomed style of living. Financial divorce analysis helps to ensure a good, stable economic future and prevent long-term regret with financial decisions made during the divorce process.

It’s important to realize that divorce is the breakup of an economic unit, as well as a family unit. The process should be approached as a dissolution of a financial partnership, with each party attempting to remove the emotions from the process in order to develop a workable plan. There are three common emotions that are prevalent in the beginning stages of a divorce: fear, anger and guilt. It can be a role of the CDFA™ to recognize these emotions, determine where they are coming from, and help defuse them.

Here are a few key financial elements to be aware of when going through a divorce:

Gather all financial and property records. Obtain records of all bank, and brokerage accounts, insurance policies, retirement plans, tax returns, and other financial data. Develop a comprehensive list of all your property and assets, including furnishings, art objects, jewelry, and investments. Compiling these records is a good first step in any agreement regarding division of assets.

Think through what the divorce will really cost you in the long run and develop a realistic monthly budget during the financial analysis process. Expenses such as life insurance, health insurance and cost of living increases must be taken into consideration when agreeing on a final financial settlement.

No matter how cash-poor you are you must begin savings. If you don't start, you'll never regain your financial footing. Prepare a budget or cash flow analysis even if you've never done one before. Your new financial circumstances should be analyzed. Prepare or at least review your budget with a financial planner may be a better approach. Independent review is vital to avoid "fooling yourself" with overly optimistic assumptions.

Be aware of all tax liabilities and benefits. The monthly distribution of the financial settlement will change individual tax burdens based on the amount of Spousal Support (taxable income to the recipient and tax deductible to the payor) vs. child support (tax neutral for both payor and recipient).

Act quickly to protect your assets. Alert your, bank, brokerage firm, or mutual fund broker of the situation. They may agree not to make transactions on joint accounts without your approval. Immediately establish credit in your own name if you don’t already have it. Revise your estate plan, power of attorney, and beneficiary designations.

Keep the lid on legal fees. Don’t use your lawyer to get back at your ex. A divorce these days is really an economic issue. Most people cannot afford to pay for vengeance. Understand that the meter is running every time you call your Lawyer. Don’t waste your time venting emotional issues or sharing the latest outrage.

Set a realistic housing budget. Don’t let emotion cloud your judgment about keeping the family home. Set a realistic budget that takes into account your mortgage, property taxes, and maintenance. Divorcing women often pass up their ex’s pension in favor of the house—even though the pension may be worth far more in the future.


About The Author


Eva Sachs is a Certified Divorce Financial Analyst (CDFA™), has her CFP™ designation and is a member of the Institute for Divorce Financial Analysts. She can be reached at esachs@womenindivorce.ca Please visit her informative website at www.womenindivorce.ca.

Written by: Eva Sachs

Finance and Divorce

Life is hard and nothing is more testing and straining than going through a divorce. A divorce can indeed be a stressful time without the added pressures on ones finances. Besides emotional erosion, a divorce is also known to be a costly event in a person's life; however provisions can be made by both parties to ensure that the financial strain incurred through divorce is made to be an equally-shared responsibility.

The best way to ensure that your divorce does not put a strain on your finances is to be realistic. What are the objectives or goals to be reached financially? People often are so used to sharing their finances when they are married that the prospect of divorce leaves them feeling confused as to what they own as an individual.

Initially couples have to embrace the fact that they are individuals and so are their finances. They are individual finances. By calculating what each person is worth or has contributed to the relationship often helps solve the problem.

The thing to do is to get help from a professional finance advisor who can aid you in this. By doing this, you are being realistic about the financial implications of a divorce. Lawyer fees can be more expensive than expected if the divorce drags out endlessly because as a couple you cannot reach an agreement. If you don't want to do this for your partner as a gesture of decency, then at least do it for your own financial future.

The tragic thing about this whole ordeal is that couples are often so bitter that they cannot see through their own disappointment. Instead they opt for a full on war with each other and forget what this war costs them in terms of personal finance. Maybe people should learn to more realistic: once it is over it is over. Pack your bags and move on; save yourself from the bills that will come on after, leaving you in a financial mess that might take too long to sort out.

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Written by: Brad J. Tamitnowson

Divorced And Cheated Out Of The Finance-How Smart Divorce Lawyers Are Ruining Women

Lawyers quite often boast of how there is plenty of money to be made from divorce cases. You can be sure that this is no idle lawyer talk, especially when you consider the fact that more and more lawyers are being drawn into this area of legal practice.

But even more interesting and instructive is where all the big divorce money for the lawyers is coming from?

Yep, you guessed right, its' from our pockets, yours and mine. Basically any cash paid to a lawyer, even by your ex-husband depletes the family finances and assets that may have to be sold to settle legal fees. Money that should have otherwise gone to divorced women to help them rebuild their lives with some decent finances after the devastation that usually comes with divorce. Make no mistake about it; lawyers love nasty divorce settlement cases. The nastier they are, the better for them. Lawyers are usually the only true winners in any divorce action.

When they are not helping your ex-husband to hide or understate assets, they will be busy ensuring that by the time the divorce is finally settled, most of the family assets and cash will have gone to paying for their services, sometimes leaving little or nothing for you and your children to rebuild your lives with.

Yet it does not need to be like that. You definitely deserve better. Fortunately, many women are fighting back these days and with lots of success too. It is amazing how much of a difference, taking a few simple precautions can make. Generally these important steps to secure your future have to be taken long before there is any talk of a divorce. Just the way folks take out insurance for a rainy day. You're still happy if you never need to claim on your insurance, but it helps you sleep better at night and gives you peace of mind because you know that if the rainy day, or disaster comes, you are fully prepared.

It really is a jungle out there and many women have realized that it is not a good idea to place your whole financial future in the hands of someone else other than yourself.


About The Author


© 2004-2005 Cathi Adams.

Cathi Adams is the author of "Divorce Secrets: What Every Women Should Know." This invaluable resource provides steps to ensure financial security to woman faced with the possibility of divorce.

Visit her web site for a FREE report - What You Absolutely Must Know Before You Even THINK About Getting A Divorce: http://www.DivorceDefense.com.

Written by: Cathi Adams