5 Financial Questions You Should Be Asking During Divorce
/Author: Erin Levine, CEO of Hello Divorce
Divorce is the unwinding of the biggest emotional and financial contract most of us will ever enter. It can be exhausting and heartbreaking (even in an amicable divorce) and the stakes are high – if you don’t ask the right questions, file the right paperwork the right way, and ask for help when you need it, you could set yourself up for an outcome you’re less than thrilled about.
I’ve been a divorce lawyer for nearly 15 years, and I’ve learned a thing or two along the way. If you’re thinking about or have already started the divorce process, here are a few questions you should be asking that will help you mind your money along the way.
1. Ask Yourself: What do I really want?
You are not going to get everything you want in a divorce, and it’s better to start the process with that understanding in mind. Divorce isn’t about “winning” or “losing,” it’s about reaching a final agreement that you and your ex can both live with. Remember that you are both going to undergo a financial transition in your lives. You both are going to need to ask yourselves tough questions and to make tough decisions about money, property, and many other things.
Thinking hard about what you need in order to set yourself up for your next chapter will help you stay focused throughout the process.
2. Ask Yourself: Do I have everything I need?
You have a right to know what assets, debts, and income your spouse has. Sure, you might not be entitled to all of it – or even half of it, in certain states – but some of this stuff might be relevant to other issues beyond property, such as spousal support or attorney fees. Besides, how can you possibly negotiate a fair result if you don’t have an accurate financial picture?
If you suspect you don’t have the information you need, or the info you do have is not up-to-date, ask for it. If s/he doesn’t provide, there are legal steps you can take to get the documents you need.
3. Ask a CDFA: How do I set myself up for financial success, post-divorce?
A Certified Divorce Financial Analyst (CDFA) can help you navigate the divorce process and avoid costly financial mistakes that could impact you for years to come to help ensure you land on solid financial footing post-divorce.
I interviewed CDFA Jennifer Taylor for Hello Divorce about how to work with a CDFA, and she provided some really insightful tips. She said that the value of a CDFA is heavily correlated to the financial complexity that exists in a divorce. For example, if you and your ex are in possession of significant non-liquid assets like real estate or retirement plans, have an imbalance of income earning potential that requires a financial strategy, or if you lack a clear understanding regarding what separate vs. marital property is, meeting with a CDFA could provide clarity and sound advice.
Taylor also says it’s important to make sure that your Qualified Domestic Relations Order (QDRO) is prepared and implemented. Many people overlook this step, and it can impact your ability to receive pension income or 401k/IRA withdrawals.
4. Ask Yourself: What debt is in my name, and what still lies in joint accounts with my ex?
Consumer law expert Ian Lyngklip offers this initial advice: “Keep in mind that when you receive your final decree of divorce, where a judge lays out ‘you owe this, you pay that’ – that decree has no effect on the credit card or mortgage companies that have lent you money. Those creditors are not involved in your divorce, and they have no duty to follow the judge’s orders. As far as those companies are concerned, you are still on the hook for every piece of credit that you signed for before you got that divorce, even if the judge assigned responsibility for that debt to your spouse.”
He advises checking your credit at the beginning of your divorce process and monitoring it regularly, closing off all joint accounts with your ex, and advising credit bureaus of your new address, relationship status and any name change involved. Lastly, if your ex isn’t paying off joint debt (even if you both agreed to do this), you should. You don’t want your credit report to suffer just because your ex is refusing to pay.
5. Ask a Lawyer: Have I properly completed all of my spousal/child support paperwork?
I recently had a client who agreed to waive her interest in community property in exchange for more spousal support. She and her ex had been trying to keep divorce costs down and had been working through an online legal platform, which didn’t provide the correct forms for making this spousal support adjustment. Rather than spend time tracking down the proper paperwork, the spouses agreed to move ahead with finalizing the divorce and complete the forms later. They never did complete the forms. More than a year passed and when the husband stopped paying the increased amount of support they originally agreed upon, the wife sought to enforce the “agreement.” But their final divorce judgment said nothing about spousal support; in fact, the wife had unknowingly waived support by not completing the forms.
The moral of this story: unless you are 100 percent sure that you are filing spousal and child support paperwork correctly, it is in your best interest to work with a lawyer to have them review these documents before you submit any paperwork to the court for a final decision..
The takeaway: You got this
This probably feels overwhelming, but take heart in knowing that there are tons of free resources out there that can help you feel informed and empowered throughout this process.
When we feel more informed, we feel more in control, and that helps to reduce stress and anxiety. There may be a few bumps along the way, but you will get through this process and on to the next incredible chapter of your life.
Erin Levine is a Certified Family Law Specialist and the owner and managing attorney of Levine Family Law Group, based in Emeryville, CA. She is also the founder and CEO of Hello Divorce, a “modern break up service” offering on-demand legal help and wellness support. Hello Divorce’s offerings include access to legal coaches who guide clients through the mediation process and a best-in-tech DIY Divorce application that utilizes AI and form generating software to help users complete all the forms required to complete an uncontested divorce in California. Erin’s client-focused and design-centered approach to the delivery of legal services has garnered her acclaim within the industry and beyond. Her work has recently been published in media platforms ranging from Above the Law and LegalSites to Forbes, Entrepreneur, Ozy, Brit + Co, and Mind Body Green. Earlier this year, American Bar Association named Erin to the 2019 “Women in Legal Tech” list. What Erin does best is make the law behind personal relationships more human, affordable and accessible. Follow Erin on Twitter, Instagram and Facebook @hellodivorce.
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