Once you've made the difficult decision to end your marriage, the next step is to work out a financial agreement. Ultimately, you may need a good attorney to ensure you receive an equitable settlement, but here are some things to think about:
- Many states determine the value of the retirement assets to be split based on the official date of separation, not divorce. If you separate in May 2004 but don't divorce until sometime in 2005, the courts may direct you to divide the assets (the specifics will be determined by your settlement) as of May 2004. With this in mind, if your husband is about to get a bonus or retirement payout in December, you will benefit from separating after that date, and if you're expecting a big bonus a few months down the line, the same is also true for him.
- If you intend to leave the house to your husband, insist that he refinance immediately and take your name off the mortgage. If your name is on it and your husband defaults or gets behind in the payments, it will affect your credit score and you'll be responsible for those payments, too. Don't let that happen.
- Make copies of all your most recent financial statements, so there's an accurate record of all money to be split. Long after the divorce is final, you can still be held liable for debt your ex-husband accumulated while you were married, even if it was in his name only. Make sure you know about all credit cards that were taken out during your marriage. If you have cards with balances on them, pay them off now, and then close those accounts—if you're not able to do that, the settlement should address a repayment schedule.
- Social Security is also a big consideration. If you've been married for at least ten years, you qualify to receive half the amount of your husband's benefits when you reach full retirement age. If half of his benefits are more than all of your benefits, you could choose to receive his instead. Even after the divorce, if your ex-husband dies, you'll be entitled to survivor's benefits starting at age 60. If you remarry before turning 60, you won't be eligible to receive payments from your ex-husband, unless that second marriage ends. For more information on divorce and Social Security benefits, call the Social Security Administration at 800-772-1213 or go to www.ssa.gov.
Remember, settle for nothing less than what you deserve. And here's to a new happily ever after.