Divorce is often accompanied by financial challenges, including that the same total of income must now support two households. Decisions and choices that you and your spouse make during the divorce process will make those challenges easier or more difficult. Here are three common decisions that can have profound impacts on future finances:
Planning for Financing for a New Residence. If purchasing or refinancing a residence for either spouse might be part of your divorce, it may be wise to delay filing the divorce with the court until the financing is handled. Filing with the court will likely have the unintended consequence of making mortgage financing unavailable until a final agreement is reached. The better choice – reach agreements before filing with the court.
Using Court Procedures Will Increase Your Expense. Court procedures can add enormous expense to your divorce, even if your case does not go to trial. Old-school divorce lawyers will often advise their clients to file motions with the court or to conduce formal "discovery" (information exchange), both of which are expensive procedures. When necessary, these can be helpful. However, they are overused and very expensive. Worse, such court procedures are likely to create a dynamic that will make reaching a satisfactory agreement less likely, because they are designed to create (or set up creating) a winner and a loser. Instead, explore alternatives that are likely to create better results, such as divorce mediation and Collaborative Divorce.
Get Good Legal Advice. Failing to get good financial and legal advice can be costly. Divorce has major financial, tax, and legal implications. Good advice will often more than pay for itself. Part of finding good advice means seeking advice from professionals whose financial motivation is consistent with your own interests. For example, it may be worth hiring a financial advisor only for divorce planning with no prospect of selling financial products. Yes, such financial advisors will charge a fee, but their focus will be solely on providing you good advice, not selling product. Similarly, if you wish to seek a settlement instead of a litigated outcome, consider hiring a lawyer who will not go to court and who specializes in divorce settlements. Hiring a lawyer who specializes in divorce, and is known to be competent, is important; divorce is a true specialty, and those who do not practice divorce law regularly are unlikely to have the knowledge base to provide the best advice. Consider hiring a lawyer who is also a Fellow of the American Academy of Matrimonial Lawyers -- Fellows are required to be recognized as experts in the field and pass tests to demonstrate their expertise. No other organization provides such an objective and stringent review of divorce lawyer skills.