12 Major Financial Mistakes Women Make in Divorce: Part Two
If you’re going through a divorce, you’re probably wondering exactly what you don’t know you don’t know. After all, that’s always the question, isn’t it? You know a few things, and you’re hyperaware, but you know there are other things that, because of your inexperience, you’re probably missing. It’s not your fault; if you got divorced every day, you would know these things. Luckily for you, divorce is definitely a rarer occasion. Still, it’s easy to feel a little overwhelmed about all the things that you don’t know that you don’t know. How can you ask the questions that matter when you don’t know you should be asking?
That’s where I come in. I don’t personally get divorced every single day (thank goodness), but I do work at a law firm that represents women only in Virginia divorce and custody cases. I’ve seen my fair share, and not a day goes by that I don’t think about and talk about divorce, usually with the other divorce attorneys who practice at my firm. It’s safe to say that I have more than a little experience with divorce. On Monday, I spent some time talking about six financial pitfalls in divorce. Really, there are twelve total pitfalls that I’ve identified, and today I plan to finish out that list of twelve by giving you the six I haven’t had time to mention yet.
Divorce is complicated, both emotionally and financially. If you’re headed towards divorce, this list will help give you a few things to look for or consider that maybe you haven’t had a chance to think about yet. It’s always a good idea to talk to a professional (like an attorney, a CPA, or even a tax expert) to get an idea of what to expect financially in your divorce. Every divorce is different, and every couple has a different set of assets and liabilities, so your financial future may not look exactly the same as the next person’s. It definitely can’t hurt to get a little extra information that is specifically targeted to your unique situation. Still, failing that (or, perhaps, in addition to that), at least consider my list of twelve financial pitfalls for Virginia women facing divorce. Today, I’ll start with number seven.
7. Confusing money and emotion.
Attorneys are great at a lot of things (but, of course, I’m biased). One thing that we’re not particularly good at, though, is dealing with emotion. Because I work in family law, I feel like I’m called upon to deal with emotion pretty often, and it always makes me uncomfortable. Even though I’ve handled lots of divorces, I really don’t have any specialized training or education that equips me to handle an emotional breakdown. I like to think that I’m a relatively normal person who is capable of giving decent advice to people who are going through incredibly difficult personal situations, but the truth is that I really do lack the training.
And, also, I don’t take insurance.
Your divorce feels very emotional. That’s normal! However, as far as your attorney and the court are concerned, your divorce is pretty much just a business transaction. A marriage is like a business and it consists mostly of different assets and liabilities that need to be fairly divided between the two business partners. Although it’s true that the judge CAN (theoretically, at least) take into account the negative and positive monetary and nonmonetary contributions each party made to the marriage (meaning that the judge can consider both the good things you did to build up your marriage, and the bad things you did to tear it down), in most cases, the final split looks unnervingly close to 50/50. That’s just the way it is. Fault sometimes matters, but mostly it doesn’t, because the judge thinks its fairer if everybody has the tools available to make as fresh of a new start as possible. Why does it matter what the judge things, when you’re most likely going to negotiate an agreement? Well, the truth is that no one would sign an agreement that was totally one sided, because they know they could always take it to court and the judge would (most likely, at least) award something very close to 50/50. Why sign an unfavorable agreement when you could go to court and just have the judge award pretty darn near 50/50 anyway? So, the reality is just that agreements that are too far off the 50/50 mark don’t get signed. It’s more a question of which 50% you want than whether you actually want things to be divided 50/50 at all.
It’s a business transaction. You should think of it that way, and do your best to keep your emotions out of it. If you’re having trouble dealing with the emotional side of things, you should enlist the support of a licensed, trained mental health professional. They do take insurance, and they’ll help you deal with your anger, grief, or resentment in a productive way.
8. Not standing up when it’s necessary.
Why do women always feel like they need to be nice? I don’t know the answer to that, but I know I’ve felt that way, too. I don’t like other people to think that I’m being mean or too harsh. Have you ever felt like you were being bull dozed? Probably so. Women, especially in the South, are raised to make nice with other people. We’re supposed to be sensitive, supportive peacemakers, and that makes it hard for us to be comfortable with saying no or being difficult, even when we know that it’s warranted. We don’t want people to think that we’re difficult, or rude, or too pushy, so we end up laying down and taking it, rather than standing up and fighting for what we deserve.
I see this happen all too often in divorce, and usually it goes hand in hand with a husband who knows exactly which buttons he can push to make his wife do whatever he wants. Don’t be that girl. Fight for what’s yours, and make sure you’re getting what you need out of your settlement. Don’t underestimate your needs, or fail to ask for something (like spousal support) because you’re uncomfortable or feel guilty. You’ll underestimate your needs this way, and end up putting yourself in a tough spot. Remember, too, that spousal support is taxable, so you’ll need even more than you think to pay the taxes on it.
Don’t be afraid to ask for what you deserve. If you’re not sure what you’re entitled to, ask about that, too. But the time to find out is now, and then you should be sure you’re ready to stand up for what you deserve.
9. Not being willing to take control.
If your husband has been in charge of managing some part or other of your marriage, that’s going to have to stop soon. It’s time for you to take control of your own life and all of the pieces in it. Listen to your attorney, ask questions, make plans, and figure out how to accomplish your new goals.
This is your divorce, and your one real chance to get what you need out of your marriage. Take what you can, don’t apologize for it, and be prepared for the first steps towards starting over.
10. Not preparing for the worst possible situation
In any situation, it’s important to prepare for the worst, even though we always hope for the best. Somehow, thinking about (and preparing for) the worst gives us a sense of perspective and also helps us to really, really think through these situations and come up with ways to cope. Chances are, the absolute worst case scenario probably won’t happen to you. But thinking about what it is and how you would deal with it ahead of time can give you some peace of mind and also a plan, both of which can be super important.
If you don’t have enough money to live on, what will you do? Take out a loan? Borrow from your parents? Move in with your sister? Can you get welfare or food stamps to help out temporarily? Are there any shelters that will help provide you with a place to stay? Some shelters not only provide actual housing for women, but also give gas or Wal Mart gift cards to help women in trouble. Some have a community closet for women to use before court appearances or job interviews, too. Before you assume that you don’t need help from a shelter, find out what services they provide.
Don’t panic and let money rule your decisions, or make you feel like you have to stay in an unhappy, unfulfilling, or unsafe marriage just because you can’t afford to leave. Remember, so many services exist to help good people temporarily while they get back on their feet. There is no shame in needing or asking for help when you need it!
11. Forgetting to develop a career
If you’ve let your career fall by the wayside as you promoted your husband’s career and took care of your children, you’re not alone. But you’re probably going to find that the reality of your post divorce life will force you back into the workforce, whether you’re prepared for it or not. Child and spousal support awards are not generally overly generous, and you’re kidding yourself if you think your soon to be ex hubby is going to still be willing to spend extra money to make sure you can stay at home raising your children.
If you lack training, your credentials are now out of date, or you never had a chance to get the kind of education you need to secure a well paying job in today’s tricky market, now is a good time to make that chance. Pre separation, again, just like with the tires, is a great time to spend marital money on something that will allow you to get your feet back under you after the divorce.
Your spousal support award may also provide you with a little extra money for tuition, books, and living expenses, if you ask for it. The best thing to do is to come up with a plan before you head to court (or start to negotiate your agreement) so that you and your attorney can decide exactly what to ask for. Now is a great time to get your career back on track, even if you’ve stayed at home (or seriously reduced your hours) prior to now.
12. Skimping on professional help
You really do need all the professional help you can afford. If you hire a cheap attorney (or use a blank form that you find on the internet and write your own separation agreement), you may end up with a settlement that is less than you could have gotten otherwise. What kind of deal is that?
In divorce, like with everything else, you get what you pay for. Financial advisors, tax attorneys, certified financial planners, forensic CPAs, and business valuators can also be real assets, especially in some of the more complicated cases. If you don’t want to hire an attorney, a mediator is always a good option. If you’re looking for an alternative to traditional divorce, a collaboratively trained attorney can help you negotiate an agreement with the help of other professionals, like a child specialist and a financial specialist, who are there to help protect both of you and your husband’s post divorce futures.
It’s also a good idea to see a therapist, especially if you’re feeling the emotional strain.
Sparing the expense on the professionals that will help you navigate through your divorce is a mistake. It’s a good idea to get the best advice you can afford, so that you protect yourself, both now and in the future.
The more careful you are, the better (and more smoothly) your divorce will run. It’s important that you consider each of these things, and start to ask the questions that will allow you to craft the best divorce possible. Divorce is one of the biggest financial transactions in a woman’s life, so you should take care to be sure that yours is as good as it can be. Pay attention to what you’ll need to do right after separation, and all the little ways you can make your life a little easier. Employ the right people to help you make the decisions you’ll need to make, and be sure that you’re willing to take a stand for what’s yours. You really only have one shot to make it work, so make sure you take it seriously and protect yourself.