Today I want to talk to you about financial issues in divorce and how to help your divorce attorney help you. Financial issues in divorce fall into the following categories:
1. Division of marital assets and debts;
2. Child Support; and
3. Spousal Support (sometimes referred to as “alimony.”)
If you’re like most people who come to see a divorce lawyer, you are experiencing a fair amount of fear and possibly shock and confusion. You may have what my wife and divorce coach Tammy calls “divorce fog.” I’m happy to tell you that there are things you can do to alleviate divorce fog and help your attorney achieve the best financial result in your case.
Thinking broadly about your goals:
It may be hard to imagine that this every will be over, but it will. And once your case is over and you are divorce, what does your life look like? Take some time to imagine your best outcome. What are you doing for a living? What are you doing for fun? What is important to your? What are your goals for the future.
Doing this thinking before you meet with me accomplishes two good things. First, it gives you a conceptual framework on which to hang your goals and construct your case.
Second, it takes focus off your ex and puts it where it belongs, on your future. Time after time I see clients make their ex their obsession and most of the time, this will not get you where you want to go.
Inventory your estate:
I find it extremely helpful when prospective clients have done some homework on what’s in the estate. What I’d like to know is, what’s there, and how much is it worth? It might be helpful when interviewing attorneys to have roughed out your schedule of assets and debts, on the California form FL-142. As much as you can, try to come up with a dollar value of everything you and your spouse own and owe. This will show me what information I’ll need from the other side and give me a leg up on doing your financial disclosures.
Also, dig up your most recent tax returns and bring them to the meeting.
How much do you make and spend:
Income and expense information is vital to claiming or defending claims for child support and spousal support. Therefore, when you come in, it is always helpful for you to have about two months of pay stubs, or records of other sources of income, such as rents, dividends, interest or investment income. If you are self-employed, can you print off an accurate profit and loss statement?
We also need to know your current spending and proposed needs once you are single. I recommend that you put together your monthly budget. How much is your rent or mortgage? How much do you spend on groceries? Clothing? Transportation? An excellent worksheet for this in California is the FL-150 form.
Knowing what your primary financial issues are, helps you to form goals for the settlement of your divorce case. Knowing what you and your spouse make, spend, own and owe tells you what financial resources you have to work with. Armed with this information, your attorney can help you chart a course to where you want to be when this is over.
Until next time,
So, tune in for next week and until then,
Love your family,
Protect your finances, and
Reach for your future!