Divorce is never easy to contemplate but if you are an older woman considering divorce after a moderate to long-duration marriage, careful consideration must be given to financial planning. A recent survey of divorced women of all age groups disclosed that among older women (above 55), some 18% said that they had “abdicated to their [now ex-] husbands all financial responsibilities.” These included earning money, managing the family budgets, paying the bills, choosing the family investments and the like. These ex- wives had surprisingly little knowledge of the family income, expenses and investments, including retirement accounts, insurance policies, and mortgage balances. Of course, when the divorce began many were startled to learn the details of the family finances even when they were confronted with the reality of having to divide assets and liabilities and plan for the single life ahead.
Many made assumptions that were clearly incorrect. Among these were that they would be able to financially sustain the former marital home alone, that child support would be sufficient to cover the children’s expenses even as the costs increased over the years (but not necessarily the child support amount), and that alimony would be enough to maintain the standard of living that had been established during the marriage. Also, many did not realize that the cost of individual health insurance coverage following the expiration of the thirty-six month post-divorce COBRA period would quickly reach stratospheric heights once the ex-husband’s employer was no longer obligated to provide coverage for the ex-wife.
When these details became apparent to many of these women, the hard reality of having to begin or return to work became apparent. Of course, for those already employed there was little disruption. But for those who had to re-enter the workplace perhaps after years staying home to raise children the stress can be overwhelming. (Not to mention the forecast of diminished Social Security benefits on retirement due to years of being out of the workforce.)
How can you prevent the ‘shock and awe’ of a pending or anticipated divorce? As Sir Francis Bacon wrote, “Scientia est potentia,” knowledge is power. Before the divorce process is under way, begin by looking at the family bank account records and credit card statements to learn about the family budget and to create a ‘marital lifestyle’ number. You can seek early pre-divorce assistance from a competent family law attorney who should examine the title to and mortgage on the marital home, the value of the automobiles and boats, perhaps even have a quiet appraisal performed on the marital home or other properties and assets. You can begin seeking employment information to learn what may be an expected income level following the divorce. Finally, study the anticipated costs for raising the children (child care, pre-paid college plans, etc.) to see if expected child support will be sufficient. With an attorney’s help, you can gather significant information to assist you when the time arrives to prepare for and negotiate to a successful conclusion your divorce.