Know Before You Go: Your Money and Your Divorce, As Seen in The Garden State Woman Financial Resources Guide (Feb 2005)
Jan L. Bernstein
Achieving a sense of financial stability while you are in the process of a divorce (or even just deciding whether to divorce) can be an overwhelming goal. There are several identifiable steps that you can take to help assure that stability while going through the divorce process, a time period often marked by transitional turbulence:
Do not feel like you have to figure everything out by yourself.
Many people think that if they consult with an attorney about getting a divorce, there is no going back, meaning that they must go forward with a divorce. That prospect can be daunting to an individual who may be uncertain as to whether he or she even wants a divorce. To help you better understand the divorce process, you can consult with an attorney to obtain information on topics including alimony, child support, and distribution of assets without actually going forward with a divorce itself. For example, generally speaking, the date on which you actually file a Complaint for Divorce is the traditional termination date for the marriage. Courts will look to that date when determining the duration of the marriage (which is a factor for both alimony and asset distribution) and identifying and valuing the marital assets. Reviewing your specific financial circumstances with an attorney can equip you with information even if you are not sure emotionally if you are ready to end your marriage.
Keep track of how you spend your money.
One factor that courts look to when determining support and asset distribution is your marital lifestyle. A key component to determining that lifestyle is analyzing your monthly expenses, which in New Jersey divorces are broken down into three main categories: Shelter, Automotive, and Personal. Shelter expenses encompass the funds that you spend to maintain your home(s). They include but are not limited to your mortgage, property taxes, utilities, lawn care, and any other costs associated with your house. Automotive expenses include costs for your car payments, gasoline, insurance, maintenance, etc. Personal expenses constitute a broader category of expenditures ranging from groceries, unreimbursed medical expenses, the children's extracurricular activities and educational expenses, to more discretionary items like clothing, restaurants, entertainment, and vacations. Bank statements, check registers, and credit card statements (particularly categorized year-end summaries) help determine those expenses. You can also telephone many utility companies and request an annual statement of your account. That is helpful with a cost such as heating, which varies with the change of seasons. However, keep in mind that a court will likely not look to an isolated year of expenses, but rather will require several years to get a more comprehensive view of your marital finances. Therefore, it is good to compile three to five years of documentation for the purposes of this exercise. This is information that an attorney will be able to obtain for you during a divorce action. However, this type of analysis is important even before a divorce Complaint is filed. The more you know about your finances, and the more specific information that you are able to convey to an attorney about your finances, the better information and advice you will receive about how best to move forward.
Know that it is not all or none.
Many people think that they have to wait until their divorce is finalized before they can receive alimony or child support. That is not the case. Either by agreement or court order, a spouse can obtain alimony and/or child support prior to obtaining an actual divorce. This interim support can be a designated amount, usually payable monthly; it can be in the form of one spouse's obligation to pay certain expenses, such as the mortgage; or it can be a combination of a designated amount of support and payment of certain expenses. With regard to assets, courts generally will not distribute assets while a divorce is pending. However, many judges will freeze the assets, where appropriate, to preserve them for distribution upon the actual divorce. Therefore if you are in the process of obtaining a divorce do not assume that you have to wait until your case is completed until you can obtain relief you need now.
By arming yourself with information you can alleviate the fear of the unknown and begin to focus on planning your future.