cutting marriage papers

Divorce Preparation

Kevin Hickey

According to the National Center for Health Statistics, there were approximately 2,245,404 marriages in 2016. That is a rate of 6.9 every 1000 people in the United States. A total of 827,261 divorces and annulments were reported out of 44 states. That is a rate of 3.2 every 1000. Therefore, one could say that roughly 37% of all marriages end in divorce. Broken down even further, the state with the highest rate of divorce is (not surprising) Nevada with a rate of 28.4%. Arkansas ranked in the middle with at 9.9%.

When one is preparing for a wedding, the anticipation of a divorce is not typically at the forefront of one’s mind, but the fact of the matter is that the marriage has about 60% chance of surviving. If your marriage is one of the 40% that is ending in divorce, there are a few things to consider before officially ending the divorce. Your divorce preparation should equal the wedding preparation to protect yourself and children, if any.

First and possibly the most important step, DO NOT sign anything until you are represented and informed by a lawyer. Also, retain your own attorney. Do not use the same lawyer that is representing your spouse. While things may begin amicable, the odds are high they will not end that way. Remember, feelings and emotions are involved when dissolving a marriage. You need someone that is not emotionally attached to the situation helping you make sound decisions that will affect your future.  

Next, an attorney will advise you of financial decisions to help secure your soon-to-be single future. Immediate financial suggestions are:

  • Try to keep assets liquid. Do not make large purchases, particularly those that add to debt.
  • Freeze joint credit card accounts.
  • Set up an individual bank account and make necessary changes to have your automatically deposited paychecks deposit into that account.

If you have children involved and you are the main caregiver, you are eligible for interim support during the separation period. Child support is not taxable, but spousal support is. Even if your ex files bankruptcy, that should not affect the child support order.

Another often overlooked item is health insurance. If your spouse carries insurance, your divorce papers can stipulate that your spouse carry insurance on the children. You will have the opportunity to continue with a COBRA coverage as a temporary fix (up to 36 months). You will be required to pay 104% of the policy cost.

Many people often think their retirement and social security belongs solely to them, but that is not necessarily the case. Pensions and joint assets are divisible. Your attorney will need to prepare a Qualified Domestic Relations Order (QDRO) before the divorce is finalized. If you were married over 10 years, you are eligible to collect on your ex’s spousal portion of their social security pensions, unless you qualify to collect based on your own earnings. Once the divorce has been finalized for over two years and your ex turns 62 (whether or not he or she retires), you can collect a portion of the social security pensions.

Although, the marital home is exempt from a capital gains tax in a divorce, you must be realistic about whether you can afford to maintain the home alone. In many cases, a lump sum cash settlement is better than keeping a home that will inevitably result in the inability to maintain it on one income.

Make hard copies of relevant documents and store them in a safe location. Examples of documents to copy are:

 Savings account • Life insurance • Last 5 years tax returns • Checking account • Homeowner’s insurance • 12 months of pay stubs • Home mortgage • Medical insurance • Retirement plans • All investment accounts, i.e., CDs, mutual funds • Auto insurance • Wills and trusts •  Property/auto titles • Safe deposit box

Lastly, this is an emotional time for you with many uncertainties, but it is imperative that you maintain your composure and avoid knee-jerk reactions that could result in a poor image. This includes making posts on social media that could be used against you. It is best to disengage with this type of outlet to vent your feelings. Kevin Hickey Law Partners will be here to help you navigate through this difficult time to assure the best outcome possible for you.