Divorcing the Spouse Who Controls the Money

Household management is often split between spouses. One keeps the cars running while the other one pays the bills on time. One buys groceries, the other one takes the kids to school. Often, one spouse is aware of the financial situation of the family, while the other spouse doesn't need to process numbers. When one parent is a breadwinner and the other is a stay-at-home parent, this is often accentuated.

Depending on the decency of the spouse in charge of finances - if you are the one who completely ignores the finances surrounding your family and you are divorcing, here are some tips. Actually, these tips can be used by both spouses as a team.

A Generic attorney is not the magic wand in divorce

As soon as you hear the word divorce, don't panic and rush to the nearest lawyer's office right away. Do not do this believing it will automatically eliminate your concerns that your spouse may manipulate the numbers.

You should do your research correctly first, and interview multiple attorneys if you think you will need one. Sadly, I must affirm that all attorneys are not created equal.

I often see a bad attorney costing a client more than the value of their new car and still not obtain a fair asset division. (An article on how to choose an attorney for your case will be posted soon, without referring to specific names, of course.)

Get organized, get organized

Sit down at your nearest espresso place and get organized. Prepare a list of your assets - basically everything you have acquired during your marriage that is material and has significant value. I always see how the organized spouse affords less stress over this part of divorce.

Also create a folder, electronic or physical where you will collect the important documents that are relevant to your list. You may want to start with the largest one, usually real estate. You may not have access to relevant documents yet, but begin with the list.

Include certain objects on your list even if you don't intend to argue over them. Things with significant value that have become invisible in your day to day, from jewelry to tools, from cars to bank accounts, to investments to retirement accounts like 401K's.

Having this list will give you mental order and peace of mind to keep walking the process.

Propose writing a neutral list of assets

Discuss the possibility of dividing assets fairly and equitably with your spouse if your communication is not completely broken. This will ensure that you both do not end up as the biggest losers if you divorce.

Help him or her understand that advancing this work without an outside party will save you time and headaches, no matter what happens later. An asset list without a name attached to any object is a great first step.

Even if each of you decides to hire an attorney, this initial research will still save you both time and money. Counting the chairs in your home or remembering the jewelry your husband bought you over the years does not require you to pay an attorney.

Be prepared for reactions when preparing the initial list of assets to be divided with your spouse and keep your cool. For instance, if you are a woman and you mention the word “tools” be prepared. Or when you trow the word “truck. Stay cool.

Just be consistent with the notion that listing everything of value does not mean that you are planning to ask for it, but rather, both you and your partner will need a neutral list that technically takes care of all the material parts of the divorce since you will be living in separate homes and you will have to move physical possessions to a physical location, so long as they are physical matter in the universe. There will be plenty of time to remove items from the list together, as they will naturally fall into place one after the other.

Ask him for supplemental information

My perception is that when one party has a comprehensive list of what she assumes is divisible property, it helps acceptance of the 50/50 reality on the other spouse. So with your list, ask if he/she could contribute with the values of things that you don't know, like the balance of the mortgage, the current value of the house, current value of the cars, balances in bank accounts, etc.

For non-money makers, this exercise can be excruciating. I see it all the time, but if you follow these tips as closely as possible, the by-product of this process will be a mind-opening maneuver upon the money controller side of your marriage. I often watch the money-maker assume that if he paid for it, he has a choice of where it goes. Your leadership in this process will massage that hard-headed person and plant the seeds of divorce-reality.

Don't go crazy over the small stuff

I strongly suggest that you prioritize the use of your time, energy and stress. Focus on the large-value items, don't go crazy about the small stuff. No need to list every chair, but yes, you need to list the furniture in groups and the lawn mower too. Sorry - crude awakening, that's divorce.

Make a separate list of things that you consider “personal items”. Yes, your clothes and perhaps many more items. Your car does not count as personal item – unless, of course, you brought it with you to the marriage.

Sometimes I run into clients who are so hurt or beaten by the process that don't want to even bother asking for anything. This extreme position can lead to regrets later.

Invite your spouse to pick first

Propose your spouse to choose what assets he/she would like to keep based on the list of marital assets and their most accurate value. There is a very high chance that many things belong to either party very obviously, and other things may be offered as a gesture of goodwill or in the name of convenience.

It might surprise you how easily this happens; if there are large-value items that have caused a big imbalance, the solution may jump out of the paper, it is called a cash payment, For instance: His car is worth 36K all paid off, your is worth 12K all paid off. The difference is 24, he should pay you 12 to equalize the car situation.

Or seeing differently 36+12= 48K. This in what you own in vehicles. You need to end up with 24K each in the car department. You have $12K, you need $12K more to reach your $24K. Easy.

Assume that the big item is a 50/50 split

The big item, the house. Hopefully with this process, the spouse in charge of the finances will have internalized the notion that real property purchased during the course of the marriage is marital, regardless of whether the mortgage payment came from his salary or your salary. Most judges I know will have you go half and half. So you might as well save time and attorneys fees, and come to an agreement that results in a 50/50, early in this game.

The approaches to divide this asset are not many and they all are quite simple. What complicates most people is the mental resistance to accept this fact and the long court fights armed with their attorneys.

The no-brainer one is sell the house, discount the selling costs and split the equity in equal proportions.

Another option is a buy out. One of the two spouses keeps the house. In order to do that, you get an appraisal, jointly; establish the market value of the house. Check how much you still owe your lender. The balance is the equity in your house. Half of it is yours, if he is keeping the house, simply include specifically in the divorce agreement that he has 4 or 5 months to refinance and pay you. End of the story.

I see people fight for 100% of the house spending thousands and thousands in attorney fees to end up exactly here, a 50/50 deal.

The House was purchased before the marriage by one spouse

If the house was purchased by one of the spouses before the marriage, and the married couple lives in the house, they both contribute to living expenses in different ways, the most common resolution I see in these cases is to see the part of the equity that was accumulated since the marriage as marital property. Only that portion should be divided 50/50. In other words, the spouse who owns the house pays the other half of the equity calculated within the years of marriage.

Legal Note: The author has no intention on providing legal advice, directly or indirectly, as he is not an attorney.

Author: German E Velasco www.DivorceNavigator.net

NavigateLifeChange@Gmail.com GermanVelasco17@gmail.com