Financially Preparing for a Divorce

Financially preparing for a divorce

It's the busiest time of the year for divorce lawyers. Family law attorney Kelly Chang talks with Tess Vigeland about why so many people seek to end a marriage at this time, the average cost of divorce and what she thinks about pre-nups.


Click here to listen to the interview.

TEXT OF INTERVIEW

TESS VIGELAND: We've gone a couple of weeks now without hearing about it being the "most wonderful time of the year." So let's get right to the not-so-wonderful part of the year. January is considered the busy season for divorce attorneys. And as the economy returns -- somewhat -- to normal, the American Academy of Matrimonial Lawyers reports an uptick in clients wanting to end their marriages.

Los Angeles family law attorney Kelly Chang is here to talk money, marriage, and the dissolution thereof. Welcome.

KELLY CHANG: Thank you. It's good to be here.

VIGELAND: What is it about this time of year that encourages people to take that first step toward ending a marriage. Were they just hoping to get through the holidays?

CHANG: Yes. There's a lot of that. And it's also the same reason you see long lines at the gym. It's New Year's resolution to be single.

VIGELAND: So much of this is circumstantial based on the individual lifestyle, but what does the average divorce cost?

CHANG: Well, it really depends. If you hire a divorce lawyer, they're going to bill you by the hour. You can do it on your own for relatively cheap. So it really depends. It's kind of like a roof -- you can do it for cheap or you can hire a professional contractor to do it for a lot more.

VIGELAND: Let's talk a little bit about how people can prepare themselves for this happening. What should each party start doing with their finances?

CHANG: Generally, I see in a couple, in a relationship, somebody assumes the total responsibility, leaving the other person in the dark. So if you're the person in the dark, I would get out of the dark. Find the latest statements -- they're mailed the house or you could call the bank. What matters, if you don't have a pre-nup, is what is acquired during the marriage and that includes credit card debt.

VIGELAND: What do you find in terms of the cost for trying to get a settlement between yourselves versus going to court?

CHANG: Much better.

VIGELAND: Court has to be more expensive.

CHANG: Everything costs money, so if it takes up too much time, it's costing too much money. So if you can reach a settlement agreement, do it on your own. It saves money.

VIGELAND: What do you find in terms of couples being able to do that. Is there a ratio of amicable to not amicable divorces?

CHANG: It's interesting. I think in the past few years, I have seen a rise in more amicable behavior in the divorces and it's probably because people can't afford to fight.

VIGELAND: Ah, because of the economy?

CHANG: Correct.

VIGELAND: Because I have a divorce attorney in the studio with me, I do have to ask about your thoughts on pre-nups. Based on your experience with couples going through a divorce, does it help? Does it make things easier or worse?

CHANG: I think it makes things much easier. Get a pre-nup. Marriage is grand. Divorce is twenty grand. Get a pre-nup. Get a pre-nup. I don't care if you don't have anything. You have to come in. If you have a 401(k), half of that could be belonging to your spouse, whatever is accumulated during the marriage. You have to protect yourself.

VIGELAND: Kelly Chang is a family law attorney here in Los Angeles, and we've been talking about January as a big month for, unfortunately, divorces. Thanks for coming in.

CHANG: Thank you, Tess.

Before Divorce

DIVORCE

Tips by Kelly Chang Rickert, CFLS

Are you headed that way?


Ok, before we even start thinking about divorce - GO TO COUNSELING. Couples AND individual. A lot of problems causing people to divorce may be personal problems. If you can save the marriage in any way, you owe it to the marriage - to the children (if you have them) - to your spouse - and to yourself - to do whatever it takes.

If, however, your differences are sincerely irreconcilable, here are some tips from a divorce lawyer.

1. DELETE your Facebook, MySpace, Twitter, or other social media profiles. You are about to embark in a very painful process. Although you should be able to share with few intimate friends, posting your feelings and experiences, PHOTOS, on Facebook could have negative consequences, including potentially legally adverse consequences. Just trust me on this.



2. Get a new email account. Better yet, if you can afford it, get a new computer. If you are sharing a computer, you need to make sure there is no spyware. If you plan to communicate with anyone (your mom, your therapist, your attorney), through emails - be discrete and careful. I've represented many a client who had full access to their spouse's emails.

3. If you have a prenup, take it out and review it. I always advise my clients who have prenups to keep it in a separate place. It is a bad idea to store your prenups in the same safe deposit box. They always end up missing when you need them the most.

4. Know your finances, especially if you are the "out-spouse". Just because you aren't currently earning income, doesn't mean you need to be dumb about finances. EDUCATE yourself as to the family finances. Even if you do not have statements, you need to keep track of institutions, account numbers, balances. This includes bank accounts, stock accounts, retirement accounts, credit card accounts, life insurance, and tax returns. There is absolutely NO excuse for being in the dark. Knowledge is power.

5. On that note, depending on whether you are the "in-spouse" or "out-spouse", you need to separate accounts immediately upon deciding a date of separation. If you are the supported spouse, it may pay for you to act clueless and draw out the date of separation. You can hire a private investigatore (while acting dumb) to figure out if community assets are being expended, trace accounts, etc. If you are the supporting spouse, and you suspect foul play, you need to immediately do what it takes to show objectively/subjectively a clear date of separation, and open separate accounts, depositing earnings post-separation into these separate accounts, immediately.

6. If you have children, you need to start figuring out a parenting plan. Children are NOT, and I repeat, NOT property to be divided. You need to consider that you are possibly wrecking their lives, and you need to take every step possible - including therapy, to make their little lives go as smoothly as possible during this split. Absolutely, without fail, please work out a parenting plan with your soon to be ex, WITHOUT court intervention. Barring any abuse or addiction, recognize that your marriage is falling apart, but RESPECT their role as the other parent. Suck it up. I know that custody battles seem glamorous, and seriously, "Everyone is doing it,", but the reality is: IT SUCKS AND YOU DO NOT WANT THIS. If there is any fight left in you, you need to FIGHT to get a good working parenting plan. You can do this. Engage the services of a custody mediator/facilitator. WORK IT OUT. I repeat, WORK IT OUT. DO NOT GO TO COURT. Even if you have 750 million dollars, do NOT pay attorneys to fight your custody battle for you.

7. Figure out where you want to live. Discuss it. Understand that if you move out, there may be legal consequences.

8. Budget accordingly. If you've never had to budget, this is painful. But a divorce is going from ONE household to TWO households. You will have 1/2 to live on. It doesn't have to "break the bank", or "take you to the cleaners", but you must recognize that money will be a bit more tight, so maybe skip French Laundry, and take the kids to McDonalds tonight.

9. Find good help. If I had cancer, I would be knocking down the doors of the best oncologist in town. Same with a lawyer. Don't hire an everyday lawyer who defends murder trials, and chases ambulances, and handles divorce. If you are going through a divorce, find a Certified Family Law Specialist to represent you. They will charge more. They've earned it, and you will get what you pay for.

10. Think good thoughts. Finally, whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable—if anything is excellent or praiseworthy—think about such things. Divorce is a nasty thing. You don't need to plague your thoughts. This, too, shall pass.