Whether you know the words have been a long time coming, or they come as a complete surprise, hearing “This marriage is over” is never easy. You may be hurt, shocked, furious, disbelieving, or (just possibly) relieved. Or all of the above.
Money may not be the first thing your mind. But you have to think about it, and right away. The only one looking out for your financial welfare now is you. So—we know it’s hard—peel yourself off the sofa and start protecting your financial future now.
Get A Lawyer.
Most people spend a lot of time thinking about leaving a marriage before they actually do it, so you should assume your spouse has done just this. He may have already met with an attorney, found a new place to live (if he’s the one leaving), and informed his closest friends of his decision. And, he may have taken steps to keep as much of your joint income and assets for himself as he can. Your best defense is to get a good divorce attorney of your own, as quickly as possible.
Here are some tips on how to select an attorney. The initial consultation is usually free, and doesn’t obligate you to work with that attorney. In fact, you should probably talk to at least two or three and pick the one who feels most right to you.
Grab All The Paper You Can.
More than half of married men admit to hiding at least some money from their wives. If your soon-to-be-ex follows this pattern, he may be planning to hide or destroy records of his earnings and of assets, such as investment accounts or property or information about a safe deposit box if he has one. If this hasn’t happened yet, protect yourself by either removing all such paperwork to a safe place, or at least scanning or copying everything you can find.
What do you do if the paperwork is already gone? Recover as much of it as possible from third party sources. A good place to start is your joint tax returns, which are likely to reflect hidden assets and income. The IRS will provide a transcript of your tax returns for free.
If your husband owns a business (which makes it easier to hide money) or has complex finances, you might want to look into hiring a forensic accountant. A forensic accountant is the financial equivalent of a private detective who can ferret out hidden income or assets for you.
By the way, your husband isn’t the only one who can hide assets or income. If you have assets that you think should be yours alone, it makes sense to remove any records about them to a safe place as well.
Plan Your Financial Independence.
Once you’ve done what you can to secure the papers you need, take some time to plan for your new financial life as a single. Sit down and make a list of all the ways in which you and your husband share finances. For instance, do you own a home together? Do you have joint bank accounts? Do you get your health insurance through his employer? You will deal with all these items one by one, over time, but your first job, which you should not delay, is to open a bank account in your name only if you don’t have one already.
Next, conduct a ruthless review of your income and expenses, to get an idea of how well you will be able to manage without his contribution. The LearnVest Budgeting Tool can help with this step. You may be entitled to child support and/or alimony but there will likely be a lag between when you and your husband separate and when you begin receiving payments.
Don’t Let Yourself Be Undervalued.
You’re feeling hurt and vulnerable, and maybe you’re even hoping to put your marriage back together. At a time like this it might be tempting to agree to whatever your about-to-be-ex-husband offers. But make sure you consider all the angles. For instance, when dividing up non-cash property such as stocks or real estate, be careful to consider how the purchase price can affect an item’s after-tax value. A stock trading at $50 a share and bought at $20 a share is worth a lot less than one trading at $50 but bought at $40 because whoever owns the stock will have to pay capital gains tax calculated on the profits when it is sold. (Here’s more information on figuring out a stock’s cost basis.)
By the same token, if you supported your spouse while he completed schooling, and/or helped pay his tuition, you may have a claim for reimbursement, or even for a share of assets resulting from that schooling, such as a medical license. Make sure you and your lawyer know exactly what you’re owed before you agree to anything.
The day your spouse tells you it’s over is likely to be one of the worst days of your life. There’s nothing you can do about that, but you can avoid making things worse than they need to be by doing what you can to keep the end of your marriage from destroying your financial health.