Carrie Schwab-Pomerantz writes about the financial considerations that go into planning for a divorce.
While the emotional component to divorce usually takes center stage, the financial component is one of the key secondary components that needs to be considered well before going solo.
Carrie Schwab-Pomerantz, author of The Charles Schwab Guide to Finances After Fifty, details some of the financial matters to must be taken into consideration before and after a divorce takes place.
In her chapter “I’m 50 and contemplating divorce”, Schwab-Pomerantz goes over the best ways for a woman whose husband was the chief breadwinner in the marriage can cope with the future without his financial control.
“You may have to deal with some potentially contentious issues such as division of assets, payment of outstanding debts, and spousal and child support –all of which can be overwhelming,’’ Schwab-Pomerantz writes.
Her first recommendation is to find a trusted friend or family member who knows enough about finances to help, especially if the future divorcee feels unprepared to handle financial matters. According to Spectrem’s study Women in Transition: Widows and Divorcees, 27 percent of divorcees consider themselves “not at all knowledgeable’’ or “not very knowledgeable” about financial products and services, and that could carry over into day-to-household financing as well.
According to Schwab-Pomerantz, the steps to take to prepare for a new financial status as a divorcee include:
Collect Financial Information: “Each partner in a marriage show be aware of overall household finances and have access to financial information. Gathering this information will be the first step toward feeling more secure.” She points to property, outstanding loans related to property, bank and investment accounts, credit card balances, insurance, retirement accounts and estate planning documents.
Establish Individual Credit: “If you don’t already have at least one major credit card in your name only, open one immediately and use it.” She said that once divorce proceedings begin, close all old joint credit card accounts, and date all transactions of that nature.
Determine Short- and Long-Term Financial Needs: “You should do some serious thinking about what you need to support yourself and your dependent children.” She includes monthly living expenses, big-ticket items related to the children, college costs and the financial needs surrounding retirement.
Consider Mediation: If the two parties in a divorce can have a conversation without breaking down into angry shouting matches, mediation can lead to a fair and equitable divorce without involving high-priced lawyers and court costs.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.