Money Questions

Divorce – now what

In the event a divorce is immanent, not only do emotions tend to get the best of us, some of us get down right ugly to the person we once were truly in love with. Unfortunately I have a friend who is divorcing and she has some questions for me regarding the issue. Here is her situation: (this article is a few pages long as there is much to cover below)

My husband I are getting a divorce. We are approximately $20,000 in debt. This debt does not include my car lease. I unfortunately have been left with all the bills with the exception of my husband’s car. My debt to income ratio is too high. I have contacted a debt consolidation company in an attempt to pay off my bills. I make enough money that I should be able to clear up this mess in a timely manner. I continually live paycheck to paycheck and I do not have any savings. If I lost my job today, I would not have any safety fund to catch my fall either. Do you have any suggestions?

While no divorce is completely free of stress and some distain. We can all feel for people who are going through debt problems, but when you couple that with a divorce it is down right unfortunate. I am not an expert in legalities of a divorce, but I gave her the following financial information that will help for sure. Again, I am not an attorney – I simply deal with money and finances, but there are many things to say nonetheless.

While generally you will need to have an attorney to handle the legal details of the divorce, an investment professional can easily play a key role with maintain money sensibility matters. Investment professional can help negotiate, mediate and strategize your money issues. They can even present evidence in court. They can prepare you for the realities of your divorce and resultant financial situation as well. Property ownership

While not an outcome most of us want to consider when getting married, divorce is a common occurrence in this day and age (just look at Hollywood right?)There are well over 1.4 million divorces in the US each and every year. Almost 50% of first marriages end in divorce, while 60% of second marriages do too. With such an emotionally charged event, you will want to make the financial and legal processes as easy and as quick as possible.

The best way to be certain of this is a good pre nuptial agreement. Other than that, both parties have to be willing to be completely open about their finances unless they want things to grind to a halt with delays. The more secretive a spouse is about what they own or owe, the longer and more involved and expensive the process to uncover assets and or debts will end up being. By coming to an agreement about property and debt, you can often avoid long, messy and drawn out battles that can add months of squabbling. There are 3 major concerns as you begin to divide your property in a divorce:

• What is mine, yours, and ours?
• How much ids our property worth?
• How are we going to divide the property?

To figure out what your assets are, both you and your spouse should put together an overall written inventory of your property. The next step is to figure out who owns what. An important categorization when determining ownership is separate versus marital property.

Separate property includes items brought into the marriage, items that have been inherited during the marriage, and item received as gifts during the marriage.

Marital property is everything (besides personal gifts and inheritance) acquired during the marriage, no matter whose name it is in. In some states, any increase in the value of separate property is considered marital property.

After you have figured out what you each own separate from each other, you will need to figure out a value for your marital property. Sometimes you may choose to keep several pieces together in order to retain the value of an entire set, such as a furniture collection or china. Other items may have an emotional value attached to them that goes beyond their monetary value. You and your spouse need to indicate a value next to each piece of property on your inventory list. For some items, you might want to refer to outside sources in order to figure out their value as well.

Some examples are:

• Your house. You can get a formal appraisal, ask a real estate agent for the price they would assign to the house, or you can find out what similar properties are selling for in your actual neighborhood.
• Your car. There are reference guides at the book store, online or even at the library. These guide swill be able to help you figure out what your car is actually worth.
• Other items. If you should have to know the original purchase price, you can use teat amount to make a decision about the items’ current value. Typically, you will want to try and steer clear of fighting over items that are just not worth as much as you think they are, like consumer electronics that tend to drop in value so quickly.

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