photo: banjo d

The writing is on the wall: Your marriage is ending and the fallout of your once-blissful relationship will leave some painful and visible scars. Divorce is inevitable, and if you think the process is going to get nasty, it’s time to prepare for the worst and get your finances in order to mitigate any collateral (literally) damage.

Here are some tips to financially prepare for divorce and make sure you survive without any permanent monetary scars.

Get an attorney

It might cost you a couple of thousand dollars for a retainer, but hire an attorney as soon as you can when you are trying to financially prepare for divorce. You do not necessarily have to strike first and serve papers, but you want some assistance in beginning correspondence with your future ex-spouse and some help putting things in writing.

For instance, your joint credit card or home equity line: As long as you are married and both names are on the account, the liabilities of those credit lines are split 50/50. The creditor could care less if your ex spent $5,000 on shoes or golf clubs, just to spite you or get you steamed — you are responsible for half of it. However, if you have a documented, certified communication to your ex from your attorney, in a nasty settlement proceeding the judge may award damages in your favor. It may not directly get you off the hook from the creditor, but it can’t hurt.

At the very least, your attorney can help advise you on the entire situation — they have likely seen every imaginable divorce situation.

Get financially up-to-date

You may hate talking to your spouse about anything, much less something as sensitive as finances, but now (more than ever) you need to be fully aware of the complete financial situation at hand.

You need to understand all of your outstanding debts — not just what the two of you have jointly, but also individually. With the assistance of your attorney, ask for a full disclosure of all financial records and accounts. You want to understand the full picture as it pertains to credit card accounts, home equity lines and even other items such as past taxes, student loans and business debts to avoid any unforeseen surprises. You should be prepared to disclose your full financial position as well.

Get your own accounts

Once it is certain that divorce is inevitable, in order to financially prepare yourself you should immediately begin establishing your own accounts that are only in your name. This includes checking, savings and retirement accounts, credit cards, and even things like car insurance. You should start routing all of your deposits and paychecks through these accounts. Any account with both of your names listed will potentially be split 50/50, and you may not be so fond of your spouse using your money to pay off his or her expenses.

Sort out mortgage/rent payments

If you have purchased a home together or are both on the lease of your current domicile, you need to take this issue under strong consideration when you financially prepare for divorce. The creditors expect the payments to be made regardless of your personal situation. You may want to move out as soon as you see this relationship is toast, but doing so may hurt your claim to the home and, again, you are still responsible for at least 50% of the mortgage payments. In some cases, the two spouses can come to an arrangement about who keeps the house and what concessions are to be made. However, more often than not, a sale of the home can be mandated by the judge to make the settlement process simpler and cleaner.

You do not want to be in a worst-case scenario where your spouse is living in your old home and you are still paying the bills. If you are the primary breadwinner you should continue to make mortgage payments and enlist your attorney to keep records of these — you will not want late payments or foreclosure to show up on your credit score (which will be very important in your newfound single life). Divorce proceedings can take months, and if you have been 100% footing the mortgage during that time, you can take the position that the settlement agreement reflects your contributions to the mortgage.

Changes to the will

If you have a will, this should immediately be discussed and adjusted based on the divorce settlement agreement when you financially prepare for divorce. It may not happen for many years, but imagine how you would be rolling over in your grave if your estate were passed to your ex spouse 40 years from now. You should have your attorney consider things about who would be the executor of the estate or, if you have children, how children from your current marriage may be treated when compared with possible children or stepchildren from a future marriage. From a legal perspective, divorce is best when it is a clean break. So, to financially prepare for divorce, reviewing your estate plan, no matter how small, will help to avoid any gray areas down the road — some of which may take years to surface.

Child support

If you have children, child support will absolutely be an issue when you financially prepare for divorce. Child support rules are established by each state, but there are no formal rules. Basically, the state expects the parents to be able to come to an agreement that is equitable to the children and that does not affect their accustomed standard of living. That may not be reality, but the state will always put the children first. The state publishes guidelines based on your combined incomes and how many children you have, so that would be a starting place to review what is actually real when you financially prepare for divorce. If you won’t have primary custody of the children, accept that you will be paying some form of child support. How much you pay is up to you and your spouse — and your financial situation as it pertains to the children. If you and your spouse cannot find a common ground, you will be at the mercy of the court to make a recommendation based on the information presented by your attorneys.

Divorce Dos and Don’ts

In a rocky relationship, divorce may seem like the quick and easy answer to personal liberation and an opportunity to start again. It may very well be just that (and it can be), but if you don’t come to terms with the financial picture from the onset of divorce proceedings quickly, you may find yourself in a world of financial troubles for many months — or even years — to come. When it comes to financial planning and divorce, maintain your composure, get your records together and consider enlisting the help of qualified professionals. A definitive agreement now will save both you and your spouse a lot of financial and emotional pain down the road. It will also make it infinitely easier to establish your own life — and even to get involved with someone else — after the divorce.

Financially Prepare For Divorce is provided by AskMen.com

Married couples, take note: Infidelity isn’t limited to just sex. Secrets about money can cheat you or your spouse out of household harmony.

According to research conducted by Jeffrey Dew, Ph.D., an assistant professor of Family, Consumer, and Human Development at Utah State University, couples who argue about finances at least once a week were 30% more likely to divorce than couples who argue about money less often. In addition, he says that the more consumer debt a couple has, the more often they will fight about both money and non-money related topics.

Add to that the possibility of one party’s indiscretions dragging down their significant other’s credit score, and you’ve got a complicated credit love triangle.

Lying and keeping secrets about cash flow is, in fact, disloyal behavior. In fact, say many, financial infidelity is the new adultery. Here, experts warn about how money can make a marriage go very, very wrong.

Price-tag fibs

Lying about purchase prices – though common – can be a major marriage no-no. “The main reason people do this is to avoid fighting about it. It’s short-term avoiding the hassle traded for long-term destroying the marriage,” says Tina B. Tessina, Ph.D., a psychotherapist and author of “Money, Sex and Kids: Stop Fighting About the Three Things That Can Ruin Your Marriage.”

Socking funds away

You may say it’s for a “rainy day,” but maintaining money that your spouse doesn’t know about is – say it together now – sneaky. Hiding things like a bonus you received at work, a savings account, or risky investments may cause your spouse to lose trust in you once it all comes out in the open (and it usually does). “This leaves your spouse to wonder what other secrets you’re keeping from them,” says Brad Klontz, Psy.D., co-author of “Mind Over Money: Overcoming the Money Disorders that Threaten Our Financial Health.”

Hiding purchases

To avoid telling your spouse that you spent a big wad of cash – or more likely maxed out a credit card — on a luxury, or to purchase an item and hide it is an epic fail. That’s because your credit mishaps can damage your credit score, which in turn can affect your future (and your spouse’s!). And don’t think that buying something new and making it look old to fool your spouse isn’t just as bad, Klontz says.

Spending marital funds on addictions

Using your money to support an addiction, be it to drugs, expensive clothes, gambling, shoes or toys — you name it – is harmful to a marriage in more ways than one. Often, people with such addictions will even take cash advances on credit cards or forge a spouse’s signature on a credit application, a surefire recipe for marital and credit score disaster.

Racking up credit card or loan debt

Irresponsible spending is untrustworthy toward your spouse whether the account is joint or single – even if you didn’t open the account behind his or her back. Your indiscretions can wreak havoc on your credit score, which in turn can cause you to be denied for a mortgage or car loan application, and more.

Loaning or giving money to friends or family

Tessina warns against giving sizeable amounts of marital money – more than $50 – to a child, relative, or friend without discussing it beforehand with your spouse.

Thinking money can be a substitute for love

A study co-authored by Jason Carroll, Ph.D., an assistant professor at Brigham Young University in Provo, Utah, concludes that materialistic spouses are about 40% more likely than non-materialistic spouses to believe that there are problems in the marriage. “They start to see their marriage as a means for having that kind of lifestyle and providing that kind of materialistic living; if that’s not what’s happening, sometimes that can be interpreted as a flaw in the marriage,” says Carroll.

The Solution: Money Talks

No matter which of the above sins is the culprit, the pricey fact remains: Disagreements about money are the number one cause of marital conflict and the top reason for divorce during the first three years of marriage, according to Klontz. “Money is taboo to many people and rarely do couples talk about it,” he says. “Each partner has his or her own set of values about money and [chances are] slim that both have the same beliefs.”

What’s more, many couples often learn about money misdeeds after being denied credit or receiving correspondence from debt collectors. To keep things honest, it’s good for your finances – and for your relationship – to request a copy of your credit reports and share them with each other at least once a year. That way there are no surprises and you can work together to overcome financial struggles.

Although financial infidelities can be damaging to a marriage, there are ways to regain trust. Tessina recommends regular financial meetings. “Don’t expect to be able to discuss finances successfully while you’re on the run, when it’s late at night, or while watching TV,” she says. Make a date for discussing finances and take the time to sit down together and discuss your needs, wants and means.

If one spouse is materialistic or likes to spend like there’s no tomorrow, a mutual agreement can help get finances on track – and a credit report will keep everyone honest. “They might work toward determining what their fixed expenses are and set up a separate account for that amount of money to be deposited monthly,” says Colleen O’Donnell, a Certified Financial Planner for Lincoln Financial Advisors in Dallas, Texas.

After agreeing to a percentage of the excess that should be devoted to savings, the remainder may be used as discretionary income. Or, specify a dollar amount that either can spend without answering to the other each month. One spouse may choose to spend a little each week while the other makes one bigger purchase each month.

“You may not think of your marriage as a business deal, but a huge part of it is just that,” says Tessina. Marriages — like some businesses — are called partnerships, and there is a reason for this. “Just like a business, a marriage takes in income, pays expenses, and is supposed to have a little profit (savings) left over.” Couples can avoid financial blowouts with regular sit-downs about money, and putting all their credit score cards on the table face-up for the other spouse to see.

Financial Infidelity Is the New Adultery is provided by Experian.com