Many couples can save considerable money and time by working with a divorce mediator, Bass says. Though you always hear about couples who spend years in court and rack up enormous attorney bills, many are able to settle their divorce with a mediator. “There are thousands of people out there who want to make sure that everyone is as OK as possible,” says Graine. “It’s something you just don’t read about.”
Whether you use an attorney or a mediator, you’ll need a team behind you, says Gorman, the tax attorney. “You’ll need a financial planner or accountant to help you navigate long- term thinking about your finances,” she says. You’ll need to map out your budget, your retirement plan, and how much you and your spouse will owe in taxes if you sell assets, such as your house.
Don’t overlook Social Security. “You and your spouse may split, but Uncle Sam won’t abandon you,” says Caroline Rakness, a financial adviser at Beverly Drive Financial. If you were married 10 years or more, you still have the right to benefits from an ex-spouse, even if that person remarries, or if there is a previous ex-spouse.
If you have a 529 college savings plan, check to see who is the owner of the plan. You may need a court order, such as a divorce decree, to change ownership of a 529 plan. Get an agreement that the owner will not change the beneficiary of the 529 plan: You don’t want the money you saved for your child’s college to go to your ex-spouse’s new stepchildren. “Don’t let that slide,” warns Bass.
As miserable as you may be before the divorce, take as much time as you can to do long-term planning, and don’t be afraid to ask for more time. “You can say, ‘OK, I get the divorce thing. Can we put it on hold while I get my master’s degree and upgrade my work skills?’” Graine says.
If you relied on your spouse’s health insurance, you’ll also need to investigate your options. “One of my clients was a disabled woman, and she was worried if her alimony would affect her ability to get disability,” Graine says. She sat down with her CPA and an elder law attorney who assured her that Social Security doesn’t view alimony as income. It was an enormous relief to her.
The least expensive option is to come to some kind of separate peace with your spouse without divorcing. But peace of mind is priceless, especially if your spouse is abusive. And, once you get past the emotional pain and adjust your finances, you may find that your new freedom is priceless, too.