Women2Women - Summer 2018 - 24

Divorce
is difficult
and is a time of
emotionally charged
upheaval for spouses and
their families. Divorce is not a time
to let the emotions take over. There are
many changes happening quickly and this is
not the time to overlook many important details that
will affect both parties and the family for years ahead.
The financial stakes are high if not planned correctly.
This is the time that you need to meet with your trusted financial
advisor to carefully create a monthly budget, obtain a credit report
and have a full discussion that examines all assets and liabilities.
Many times the emotional aspect of the situation eliminates the
clarity needed to focus on what the new reality will be for the
newly divorced.
An example of planning that may create long-term financial
strife in the years ahead would be the habit of one person that
is laser-focused on keeping the house. This may be an extreme
show of emotional "want" that is not necessarily a healthy financial decision. Most people love their home, the memories and
the neighborhood. The emotional upheaval that is happening
offers that consolation prize of the family home as a large part of
divorce debates. However, that "prize" can prove to be a costly
financial interruption that is dangerous to long-term financial
security. To keep that house one would need to carefully create
a monthly budget as a housing cost estimate. Ongoing costs and
considerations include: mortgage payment (one spouse may "buy
out" the other spouse and need to obtain a mortgage to do so),
home owners insurance, property and school taxes associated with
the home, utilities and ongoing maintenance which all add to the
list very quickly. Once you have a monthly budget based on these
considerations, you should add another 10-20% annually to cover
any larger issues that may require additional costs for property
24 Women2Women Summer 2018

maintenance. This is where you would begin to compare the
cost for the desired property and your actual cash flow situation.
Are you in the position to handle all costs? Be very honest with
yourself about this position. The absolute worst thing one can do
is to have a home that is a continued financial stretch. The term
"house-poor" applies to this situation.
Although your home is an asset, you need to look to the future
and take care to calculate how your financial future may look.
Selling the home and taking your share of proceeds may be best.
Make sure that all debt is reviewed and considered with
both parties .....I repeat, ALL DEBT! Oftentimes a spouse is
surprised with debt that has been applied for in the name of
their soon to be ex-spouse and themselves. This is where many
people have financial mishaps occur. Do not leave your name
on ANY debts. Make sure that all credit cards, personal loans,
automotive loans and all of those wonderful retail credit cards
offered and not paid off, are not inherited by you! Not addressing
these items during the divorce planning creates painful financial
woes. Please be diligent in providing complete information for
divorce planning.
There are stories of couples that have remained together because
they were so in debt that they could not afford to divorce. Have
a plan and be responsible.

Table of Contents for the Digital Edition of Women2Women - Summer 2018