Maximizing the Marital Estate in a Divorce

A personal finance expert opines that “modern” divorce is about money. And to a large extent, that’s true.

Of course, there may also be important noneconomic issues pertaining to parental responsibility and timesharing. But those are outside the focus of a personal finance expert.

Relative to the money aspects of divorce, however, here are some tips from the personal finance expert:

  1. Follow the money. Copy records you can gain access to. Tax returns. Savings account statements. Retirement plans. Insurance policies. Financial statements. Wills. Trusts. Brokerage account statements. Credit card statements. Credit reports. Etc.

  2. Poke around in the business. Business records. If the stakes are high enough, a forensic accountant may be warranted.

  3. Protect yourself. Squirrel away a nest egg to see you through the case. A separate savings account is prudent. Ditto a separate credit card. Freeze the joint credit cards and any home equity lines of credit to avoid your spouse maxing them out.

  4. Itemize premarital / nonmarital assets. Identify which were maintained separately and which were commingled with marital assets.

  5. Don’t overlook your spouse’s pension and retirement accounts.

  6. Be realistic in your expectations for alimony under the circumstances of your case and the law of your state. Also be aware that this is a rapidly evolving area of the law in many states. Depending upon both, you may want to have good handle on your reasonable employment and salary expectations.

  7. Don’t overlook health care coverage and COBRA benefits.

  8. If the assets and/or income involved are substantial, a tax advisor can be helpful in structuring a settlement to get the most tax-bang for your bucks.

  9. Similarly, a divorce financial planner can also be helpful in evaluating settlement proposals and making your money work as hard for you as possible.

  10. Bitter, protracted legal battles cost money. It is worth considering whether the reasonably anticipated benefits really justify the costs.

  11. Read more in this CBS TV Money Watch article: 10 Steps to Avoid Losing Your Shirt in a Divorce.