September Book Club Part 2
September Must Reads Part 2:
Divorce Think Financially Not Emotionally
y Jeffrey Landers, CDFA™
f you are going through a divorce or are recently divorced, Jeffrey Landers has written a very practical and easy to follow financial book for you. Divorce Think Financially, Not Emotionally, is a good place to start when you are contemplating divorce and its repercussions for you and your money. He is a Certified Divorced Financial Analyst, like me, and he gives you the nitty-gritty on how to prep your finances for divorce.
I love that Jeff goes over why you shouldn’t listen to your friends and families about divorce advice. Every divorce is different, and they only know what they’ve seen from their divorce experience or their friend’s divorce. It will only get your expectations out of sorts and far from reality. Instead meet with a divorce attorney or financial advisor who specializes in divorce. They know all the ins and outs, and focus their career on this kind of work. So why get advice from someone who only knows what happened to them or to their friend? I wouldn’t ask my friend to fix my leaking sink (unless she’s a plumber which would be very handy!), so why would I ask her how much alimony I should get?
To get you started I’ve identified some key pieces of the book. I would still recommend reading the entire book, this blog would be too long if I covered everything, like two bottles of wine long. Jeff explains six steps to start the process with, which I’ve outlined for you here:
- Get your financial documents and accounts in order,
- Check your credit report, make sure your ex-spouse isn’t on a spending spree with your credit card,
- Research divorce professionals, such as lawyers, financial advisors, therapists (your emotions will need some preparation too), and accountants,
- Open accounts in your name, get a personal credit history started if you haven’t already,
- Establish private communication by creating a new email if your spouse or children have access to yours. You may want to get a PO Box address so your children won’t open any divorce related letters. This is something I never thought of, but think it is so critical to keep the children out of the divorce as much as possible. And
- Stay vigilant with your spouse, and double check all of their expenses.
If you aren’t sure which divorce route to take, he explains your four options and the pros and cons to each. You can do it yourself, litigate it with attorneys (which mean more money and a judge to decide your fate), mediate it, or try the new collaborative divorce process. If you or someone you know would like more information about the different options, please email me at Jessica.Weaver@raymondjames.com. To make yourself more comfortable with the process, you can create a divorce team or roster of professionals to help with the finances, house appraisals, your state laws, and the emotional and mental side of it. Think of it like your group of friends; you have the friend you go to for advice, the one, who you vent to, and my favorite, the enraged comrade, who is just as furious as you are. They all serve a very critical role and are all are very different in what they have to offer.
What is marital property and what is separate property? Is the wedding China your property or his? What about his new sports car? These questions always come up when you start thinking about separating. Here is a list of what constitutes as separate property:
- Any asset you had prior to the wedding is separate property,
- Any inheritance or gift you received prior to or during the marriage,
- Property already designated with a pre-nuptial agreement, if you are lucky enough to have one, and
- Any payment received from a personal injury judgment.
Now the key is to keep all this property separate during the marriage. If you own a house before you get married, but put your spouse’s name on it, then it is marital property. Or in the same scenario, you and your spouse start paying the mortgage payments together, then it will probably be considered marital property.
The book is very extensive, and covers many other vital points, such as retirement plans, keeping the marital home or not, life insurance, alimony, and child support. Jeff does a terrific job of identifying areas to stay watchful of when dealing with your soon to be ex. He doesn’t just educate you on the pre-divorce factors; he also introduces some notions on what to do post-divorce to get on the right financial track. Remember you probable still want to retire down the road or start a new career. As I recommend for all advice driven books, it is a good place to start, but please speak with a professional before you take any actions. A small mistake with any amount of money or assets can cause a large consequence. Sorry the topic this week isn’t more upbeat, but reading and prepping for your divorce will get you closer to your ever after. Happy Reading!
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Jessica Weaver, CFP®, CDFA™, CFS®
The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Jessica Weaver and not necessarily those of Raymond James.