In Divorce Negotiations, Keep Your Eye on the Long Run

-- Going through a divorce can be extremely difficult. Because the outcome will have a lasting financial impact, it’s important to address critical issues early on.

• Before you begin negotiating with your spouse on assets, identify all assets and find out where they are held. You can’t divide these assets fairly if you don’t have a handle on them and their value. While you’re at it, check to see who the beneficiary is for each asset.
• Construct a budget showing what it would cost for you to live apart. When one household splits into two, it’s expensive for both parties, so try to identify must-haves and things you can live without to arrive at a realistic estimate of the monthly figure you’ll need to pay expenses as a single individual.
• Check your credit ratings. Some sites, like annualcreditreport.com,

show more than just credit ratings; they also provide the information on which these ratings are based. Review this information to be sure it’s accurate. If it isn’t, you can challenge it and get errors corrected. If you haven’t established your own credit, you can get started on this by getting your own credit card. While running up credit card debt is to be avoided, assets are sometimes frozen during legal divorce proceedings, and credit cards can provide some much-needed liquidity.

• Set aside money for an attorney. Many people resent the reality that they must pay an attorney when they get divorced, but you can’t expect them to work for free. And a good attorney isn’t cheap. Rates vary in different parts of the country, but $200 to $400 per hour isn’t uncommon. So be sure to plan on this major expense. (Depending on your situation, you may need to also set aside money to pay an accountant.) Keep in mind that the more you ask your attorney to do, the bigger bill you’ll run up, so be sure to confine their services to actual legal work. During your first meeting with the attorney, don’t spend a lot of time talking about how the marriage went bad while the meter is running; this information is probably moot.