In the previous articles of financial planning for women, we learnt about the starting steps of getting onto your own feet. Next, we understood the inherent multitude of risks women face and in light of that what must women do to mitigate the underlying risks.
Moving on we will now understand how financial planning can help women in different stages of their lives. In part eight, we discussed the life stage of 'Separated but still not divorced'. Here we move onto another life stage.
Life stage: Getting divorced/preparing for divorce
Relationships don't fail people, people fail the relationship. Divorce is certainly an end to a significant chapter to your life, however, a better way to look at things is to consider divorce as the beginning of something new and perhaps better.
By all means, divorce is an extremely painful process and for your own good it is best to get it done and over with as fast as possible. I know this is far easier said than done - but then here is another way of looking at things.
Divorce is about attitude. Now that you have mustered the courage to draw the line then with the same attitude and strength you have to decide to move on as fast as possible. Time may not be the remedy; in fact it may send many into an orbit of depression and low self esteem which of course is best, if prevented.
Acting fast should be the preferred way forward. Divorce brings out the worst in people be it the anger, greed, resentment, blame, envy, desire to inflict suffering or (ironically) the joy of hurting someone you once loved.
Divorce is not generally a happy time for anyone; and the life that we live today, to overcome this situation I believe 'Money' is a far better remedy than 'Time'. It is money or shall we say the lack of it or the potential loss of it that catalysis the grief and agony of a divorce.
So basically when you have decided to call it the day, there are two immediate things that need consideration viz., extent of using the legal system and talking money matters.
Decision to use the legal system
Let us classify divorce in two parts viz., legal divorce and real divorce. The legal divorce is not concerned about what happens to you in your life after the orders of the court, where your real divorce is what you will do with life after divorce and how you plan to carry on with your life thereon.
Ideally keep away from the legal system at the start. The legal system will give you a piece of paper i.e. the judgment. Note that sorting out a divorce matter in court can be a long drawn and a very expensive affair. If one spouse engages a lawyer, the other spouse is forced to do the same.
The best thing to do is to talk the division of assets via a marital settlement agreement. By using this route in agreement with your spouse, you will be able to pretty much divide assets as you like without much reference to the laws.
If you are in a situation where you don't want to talk to your spouse - see if you can get help from friends. There is a little point hiring lawyers as there will be four people having issues in communication instead of the two.
Hire them if you are going to be sure that there will be joint effort on their part to resolve your situation in a win-win fashion. This is quite rare. Hence, the best way for both is to talk and seek legal counselling and advice to finalise the MSA.
At this point, you have an uncontested case; due to which you may use an independent single lawyer (neutral to both) to file your petition and obtain the court orders. This will save a great deal of agony, stress and cost.
Assessment of your financial status
What do you exactly have in your name, what is in joint name and what is in the name of your husband alone? It is at this stage where you will appreciate the real value of money. The MSA will help here as you need to do a re-assessment of you r priorities in life, you need to re-structure financial goals which were perhaps joint goals earlier and finally plan your ongoing income support systems.
Your priority is to get shelter for yourself and your child (if you plan to have custody) and hence automatically you need an assessment of what is required as income support to live your life. A part of this would be from your own income and the other from the agreed level of maintenance support from your spouse.
The figure on alimony may be worked out such that it secures your future. There is no formula for this, as situation of each couple is very different from the other.
Basically, divorce need not be a messy, legal and expensive affair of combat, trauma and shame. Most people think that divorce is a legal battle with billions at stake. It need not be for ordinary people like you and me. It can be made a much more simple process.
Consider divorce as a process of learning intricacies of relationships, of growing, of maturing and of moving ahead with renewed zeal and vigour. There is abundance of energy at this stage but most people use this negatively, which is more self-destructive.
Re-direct your energies with an attitude of moving ahead and beginning a new chapter of life with the belief that there are better things coming your way going forward. Lady, move on.
In the next part, we shall talk about how a divorced woman should actually get about managing her financial affairs.
Kartik Jhaveri, an expert at financial planning, is a Certified Financial Planner and a Chartered Wealth Manager. He may be reached at kartik.jhaveri@transcend-india.com
Disclaimer: The contents of the above articles are the intellectual property and copyright of the author, Kartik Jhaveri. No part may be used or reproduced in any form or manner. If you choose to act upon the information contained in the above article it is at your own risk. This article is purely educative and you are strongly advised to consult an expert prior to taking any significant decision.For more strategies, click here