Divorce or dissolution of marriage
Not a fun topic at all. It's emotionaly and spiritually draining, as well as the long term financial impacts. I'm looking for a list of board guidelines, however I don't have any experience in this area and I like to hear from real people.
When you reply, please keep the advice short and include your country, as rules may be different. If you want to include more details, please do so after the short advice. Here is an example (totally made up):
Advice: Always keep receipts for sale of large items.
Details: When I sold x and received $10 for it, I didn't keep a receipt. Then it came up that I sold communal property and the other lawyer showed estimates of the item being worth $20. Without proof, I had to pay $10 out of the $10 to the other party.
Please avoid name calling, derogatory remarks, or any significant details for other parties involved. Just call them the other party and only details needed to support your advice. That should keep the posts shorter and easier to read for everyone.
Maybe some topics would help. Any tips on shared passwords, checking and savings, credit cards, what events to document/log, inventory, life insurance, medical insurance, car insurance, cell phone plans, utilities, direct deposit, cloud storage pictures and files, pets, children, cars, heirlooms, house, who mows the yard, who repairs cars, who repairs house, etc.
Advice: Stay in the know on your finances (passwords, bank accounts, All financial institutions shared between both parties, loans, etc.)
Details: A friend's husband "handled the finances". She didnt know the banking login, his pay, dates of deposits, nada. She had to go into the bank to gain information and found out he had opened a separate account for himself and drained the shared account.
Advice: Discuss separation while amicable
Details: It may be too late if separation is already on the table, but if possible, talk about it early in the marriage. My husband and I have no plans of separating, but if we did theres a mutual understanding that wed essentially take what we bought individually (ie. I bought our bedroom furniture, so its mine in our hypothetical divorce). Whoever keeps the house will refinance to be solely responsible and he can keep our dog lol. Shared account will be split accordingly, personal accounts are ours individually. For those less trusting that the other will keep their word, notarize the plan (it's like an afterthought prenup)
Well, that's really a sensitive one.
Budgeting was the first thing we discussed before getting married. We came to this scheme: his (his personal spending), hers (my personal budget), and ours (our family needs). In the result each of you has at least some of your own money, to do whatever you like with, no questions asked. How much depends on your situation. Settle on a rough amount where if you are spend more than $X, you get clearance from your spouse, or at least tell them. It's important, in case of emergency. A certain amount goes to the family budget (it could be split to 50/50), and we found a great balance, but it took a while. We have kids, so we prioritize our savings.
Need to say, it works for us but it may not fit your needs, but still I decided to share.
I'm sorry you're going through a divorce. You are correct in that it is emotionally and spiritually draining. If you have kids, make sure you both agree to handle it in a way that is best for them. Remain amicable if at all possible. Having been through it myself, please feel free to ask any questions.
I'm a real person currently in the process of divorcing after 30+ years of marriage. Not easy under any circumstances.
The best advice I can give is to try and keep it amicable with as little adversarial back and forth as possible. That, of course, means both parties have to agree to strive for that, which is sometimes not possible. If there's a way to avoid divorce attorneys becoming involved, go for it. My experience has been that often they create more stress and animosity and cost a fortune. (no offense meant toward any attorney's reading this) In my situation, we ended up using a divorce mediator, which cost us a fraction of what 2 divorce attorneys would have, and we worked with him until we came up with an agreement that we could both live with. Is it perfect? No. But in our minds, it was way better than paying hundreds of thousands of dollars (I kid you not) to attorneys who might drive us farther apart and create all sorts of other issues, particularly regarding our children.
In terms of children, who often pay a huge emotional price during the process, we promised them and ourselves that we would do whatever was within our power to never say negative things about one another to them, to never make them feel like they had to choose sides and that we both wanted all of them to have whatever kind of relationship with each of us that they wanted. For the most part, it's worked out fairly well so far (we've been physically separated for about 15 months). For us, this was probably the biggest issue we needed to settle. More important than the financial settlement. I know everyone has their own priorities, but I've seen too many situations where the kids end up on the short end of the stick.
So my advice is just like anything else in life (here comes the YNAB in me): get your priorities figured out first, whatever they may be. Then try and discuss with the other partner what each of your priorities are and see if there's some way to come to an agreement so that neither feels cheated or that they're taking advantage of the other person. Neither one will come away with something perfect but maybe they can each accept compromises they can live with.
Make sure you update your marital status with the tax department if you eligible for any income tested benefits (in Canada that would be GST credits, CCB, etc.). You don't have to wait until you file your return. And if you have any tax items that can be claimed by one spouse or the other (i.e. eligible dependent, tuition, etc. And make sure you look at the tax implications of support, especially in split custody arrangements.
Divorced real person here. Two years free. I found YNAB maybe 5 years ago (maybe more?) when I was overly stressed about our marital finances, credit card debt, lack of a budget (I tried with spreadsheets but we had no discipline so it went very wrong).
We shared everything. Every account (bank, credit card, house, car loans) we were both named and responsible for.
My income was 3x more than my husband's income. And he was really bad at math and discipline. So I did all the finances in the house. I taught him YNAB. I showed him how to use the mobile app. I told him he was required to enter purchases into the mobile app as they happened. And then I made him sit down with me twice a month (on pay days) to reconcile purchases. I needed him to SEE how we were over-spending and help him understand why he had to change his ways. Well...he didn't.
Money was not the reason for our divorce, not by a long shot. But it's a factor for sure. It's an underlying relationship killer even if it's not the main story.
I am extremely fortunate that we were able to split amicably. We sat down at the kitchen table for a few nights and untangled all of the financial stuff. Who gets which credit card? How do we split our savings account? How do we split our retirement investments? We were concerned about our credit scores because we had an 800+ credit score each within a few points of each other and it became almost a contest each month to see who was higher. My credit score was still good pre-YNAB but I gained almost 100 points after using it. When I left my husband, we were credit-card debt FREE (and we had never been close our entire 20 years together). We had some money in our bank savings account. And we had 6 months of emergency money in liquid cash investments that we could access if needed. I finally felt FREE in a way I'd never felt before.
If you friend is already in a bad place and separating, there is no option to do all of the above. But I will say (and again, I'm a REAL PERSON, not an employee or paid promoter of this YNAB tool by any means), I am two years free, still a daily YNAB user and I am still credit card free, my credit score has gone up, and I have now 9 months of emergency money in liquid ready-to-access state. I'm hoping to get to 12 months liquid so I can quit my lucrative but extremely successful job. His finances are a mess. He's got credit card debt out the roof and I have no idea what his credit score is, but I can't imagine he will stay in the 800+ range for long living how he is.
The advice of others is the same as mine. I have friends who went through brutal and nasty divorces that were solely focused on petty money arguments. It's not worth it, ESPECIALLY if kids are involved. Do what you can. Fight for what you really deserve and what your kids need. Do NOT be greedy. And move on. Get a new/better job. Save more. Simplify your life. Cut expenses. Get smart about money. It's not that hard and it's almost a game now for me. I do it almost life, I Marie Kondo my entire apartment. I commit to taking one bag of donated items to the church every month. There is always something you have not worn, used, looked at in the last 3 months. Time to go. And stop shopping for new stuff. You don't need it, trust me.
From a co-worker: continue to do what you were doing. For my coworker, this was a series of home improvements. He said, focusing on the projects wasn't easy, but looking back it was therapeutic. He said it also kept him from getting into otherwise bad habits during the divorce. It could also apply to training for a marathon, completing event coordinating for a nonprofit, just as some examples as what you might be involved in.
A lot of this advice is a bit late after the fact for me! Separated but not divorced, we now physically live in different cities. In the UK for the first five years I essentially need my partner's permission to divorce him. After five years I can do a "separation, without consent" divorce (we've been apart a really long time, he might not agree but we're doing it). In the UK, if you try to divorce within the first two years of separation you essentially need to name and blame one of you for the marital breakdown, but my ex flat out refused to do that before I even asked. He said that after two years he'd consider a "separation, with consent" divorce (we've been apart a while and we all agree it's no one's fault).
My advice to others: get written evidence who owns the pets. We never owned a house or had children but I ended up with the dog, but he keeps threatening to sue me over it. The legality of it is unclear. Get a piece of paper that essentially says "in the event of separation, Steve owns Mr Fluffy". Both sign it and date it and keep a copy. Ideally make it legally binding but even that would help your case if you need to.