In a depressed economy, the terms of a divorce settlement must be even more carefully considered. Salvaging a couple’s finances may mean waiting to settle the divorce until the economy improves or finding ways to settle that don’t involve liquidating assets.
“They need to recognize that it may be a poor time financially to proceed, or then find a way to share in the value going forward,” said Glenn Bishop, a certified divorce financial analyst in Texas. “They need to be thinking in those terms.”
If it is possible to maintain the finances without selling anything, Bishop recommends trying it. If not, the couple might take a financial hit, he said. Regardless of whether your divorce is amicable or acrimonious, you’ll need to come to terms with your spouse on critical issues such as your child (custody, support and visitation), property (division and/or transfer of joint personal and business assets), spousal support and any other relevant issues related to your dissolving marriage.
Even in friendly divorces, spelling out the precise terms of the split is recommended. By putting all the terms in writing, there is no (or much less) confusion about where each party stands. Also, any divorce court appearances will go much more smoothly because judges tend to honor a well thought out and well written agreement that covers the key material aspects of the divorce. Settlement agreements, although usually filed with the final judgment, can be entered into at any time before that ultimate date.
THINK AHEAD
When you are trying to reach a fair divorce settlement, think not only of your current circumstances but also about your future. What might look like an equitable distribution of marital assets and debts, in fact might not be so fair when viewed over longer the longer term.
For example, a 50/50 property split is not necessarily a fair property division. Carefully consider the future value of any property. For example, the type of stocks you might receive such as a retirement account could, in fact, post tax problems when that money is withdrawn years down the road. Similarly, while there often is much sentimental value to the family home, if you plan to sell it soon after the divorce, depending on your local real estate market and circumstance, that move could cost you tax-wise.
That is why, before accepting any settlement offer from your spouse, review the terms with a qualified financial expert (such as a such as a Certified Divorce Financial Analyst) for a full assessment of what it might mean to you financially today and in a few or several years.
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