Recently, I interviewed Helene Taylor, Esq. on my Profit Boss Radio podcast. Helene is a divorce attorney, legal strategist, and divorce coach. Helene provided some great insights around the subject of divorce. While her practice centers on the legal aspects of divorce, her approach to her clients strongly mirrors my own, as we’re both absolutely committed to helping clients obtain more personal power and financial freedom in any circumstance.
If you're facing divorce, here are five tips to enable you to forge ahead successfully, and even thrive, after the split.
1. Don’t Procrastinate
Too often, aversion to loss can cause us to ignore clear signals that things aren't right. This can take the form of passivity when a relationship has weakened, but it also can cause us to avoid taking necessary steps because doing so confirms we really are losing something important.
I can't tell you the exact point when you need to take action, but once you know that divorce is a real possibility, you owe it to yourself and anyone who depends on you to act. The first thing to do is collect all your financial documents and make copies. Then, make an inventory of all of your household items. Next, begin to research, interview, and build your professional advisory team. This includes an attorney or mediator, divorce coach if appropriate, financial advisor, and probably your tax preparer (if you’ve been filing jointly you can simply alert that person that divorce is a possibility and ask if there is anything you should do immediately to avoid unnecessary taxes).
2. Take the Time to Understand Your Finances
It's normal in any marriage for one partner to take the lead when it comes to finances. And while women are increasingly the ones controlling the household budget, more often than not they're not as up to speed on investments, retirement planning, saving for college, etc. That's a mistake whether your marriage is on solid or shaky ground.
Gather login information for your family’s retirement assets and savings, including your spouse’s retirement accounts. In most states, those accounts are all community property, or at least will be split evenly in a divorce, so you need to know the balances.
Grab a piece of paper and a pencil — or if you’re fancy, use a spreadsheet — and make a detailed accounting of household overhead. This includes: mortgage, rent, property taxes, gym memberships, insurance costs, auto loan payments, school tuition costs, an average of monthly utilities, Netflix, and anything else that gets deducted or billed automatically. Then, estimate the amount you spend on lifestyle expenses. This includes: gas, groceries, going out to eat, clothing, gifts, travel, and the like. You’ll need to know these numbers for your joint household, and also estimate what it’s going to take for you to live on your own.
If your spouse is self-employed, make sure you have access to the business financials as well. This may be difficult and it may involve getting an attorney or accountant involved earlier than you might have anticipated. But taking what your spouse says at face value can cost you dearly.
3. Educate Thyself
A good place to start is by researching the divorce laws in your state. What are you obligated to do? What are you entitled to? What’s in the gray area? What about child custody?
Divorce is definitely a two-way street and you should have a firm understanding of both your rights and your obligations. The more you educate yourself, the better decisions you'll make. Most states provide for several different divorce options and not all of them involve having to go before a judge.
4. Build Your Team
Most marriages begin with support from family, friends, and professionals. Divorces shouldn't be any different. You need friends with broad shoulders, family who have your back, and a team of professionals with deep experience who won't let you make potentially disastrous mistakes, especially during what's likely to be a very emotional time.
Make sure your team has the expertise and the information you need to make sound decisions. That includes an experienced attorney. It doesn't necessarily mean you need a pit bull lawyer, though. Helene stressed that finding a good negotiator who is committed to the best results for you is what’s important. Hiring someone with a "win at all costs" mentality could result in a long, protracted battle and mounting expenses.
And of course, you should also speak with a financial advisor who can help you understand your current situation and what you want your life to look like after your divorce.
Help your financial advisor and attorney to work together so you can achieve the best possible footing to move ahead with your life.
5. Create a Wealth Plan
One of the biggest mistakes women make is not making profitable plans for cash flow and savings settlements. While we do know that 70 percent of women fire the “family financial advisor” within a year of the split, we also know is that women are more likely than men to let assets sit in cash.
Taking the financial reins can be daunting, but with the guidance of a financial advisor you trust, you will be able to put a plan in place that will support you and your children in the years to come.
Divorce is an unfortunate fact of life. But so many women report that once they’ve got their financial footing, they find divorce can actually open the door to new possibilities and expanded happiness. By being proactive and surrounding yourself with a supportive team of friends and professionals, you can stay sane and solvent as you move forward into the next exciting chapter of your life!
You can listen to my full interview with Helene, including how to find an attorney who will best serve your interests, by clicking this link.
Hilary Hendershott is a member of the DailyWorth Connect program. Read more about that program here.