Pre-divorce financial planning for the secondary or non wage earner

It is common to ignore the danger signs in a marital relationship. Nobody likes to think that their marriage is in danger of dissolving. Facing reality and planning ahead, however, can avoid unnecessary stress.

The following are some financial planning recommendations which, although not pertinent to every situation, generally have proven helpful to the secondary or non-wage earner.

  1. Review all mail which comes into the marital residence and make a list of all the senders and their return address. It is particularly important to obtain the addresses of brokerage houses, insurance companies, credit card issuers, banks, etc. Make and keep copies of all bank and brokerage statements.
  2. Review all tax returns and seek complete explanations as to any item which may be questioned before signing. Make copies of the tax returns including any and all schedules.
  3. Inventory and periodically review the safe-deposit box. List the contents (including cash and jewelry) and make sure that the safe-deposit box is in joint names.
  4. Do not make major purchases (such as a boat or expensive car) for your spouse, or allow your spouse to make major purchases on your behalf. Keep the assets of your marriage liquid and unencumbered.
  5. Do not transfer, assign, alienate or make a gift (even to the children) of any marital asset. Maintain all assets in joint names (or your name alone, if possible).
  6. If your spouse has a pension plan with his/her employer, determine when the pension vests. It may be important to be married at the time the pension vests to ensure that you will be entitled to a share of that asset. Obtain copies of the pension and/or profit sharing plan and any yearly statements.
  7. Obtain copies of any will or trust documents. Go with your spouse to the attorney and participate in any estate planning.
  8. Gather loan documents, mortgage applications, and financial statements.
  9. Do not sign any documents or financial instruments that are blank. Keep copies for yourself and do not rely on your spouse to fill-in the blanks.
  10. Have a complete medical and dental checkup. Familiarize yourself with your spouse’s medical and dental plans. Make certain that you have done any needed medical and dental treatment prior to separation and that you are covered with medical insurance in the event of separation.
  11. For purposes of receiving any social security benefits to which you may be entitled when your spouse retires, make certain that you are married for at least ten years. Do not separate prior to this time (or at least avoid being divorced prior to this time) if at all possible.
  12. Open your own safe-deposit box at a bank to store any important papers and valuables. You also may wish to open up a post-office box to receive personal letters from your attorney, etc.
  13. Separation generally causes immediate economic hardship. Therefore, put away as much cash as you can. You will need to retain an attorney and will also have particular personal, financial needs which your spouse may not want to pay for. Therefore, from weekly monies which you receive from your spouse to buy groceries or from your employment, “separate and stash” as much as you can.
  14. Make certain your automobile is in good working condition and that it is titled in your name or jointly (not in your spouse’s name alone). You will need to be mobile in order to see your attorney, go to the supermarket, or go to work.
  15. Review and make copies of any and all insurance policies relating to the marital residence, furnishings or other assets, including any riders for jewelry, silverware or other valuables. Make copies of any appraisals which may be available.
  16. Don’t create any additional indebtedness and don’t allow your spouse to do so either.
  17. Develop your own lines of credit. Obtain in your own name: gasoline credit cards, credit cards from larger department stores and national credit cards (Visa, MasterCard, and American Express).
  18. Keep all inheritances separate from your spouse. If an inheritance is received, don’t place it in joint names.
  19. Make certain that all taxes owed to the Federal Government and any other taxing authorities have been paid.
  20. Obtain the most recent financial statements given by you and/or your spouse to a lending institution for the purpose of obtaining a loan or line of credit. (This usually lists all assets and liabilities).
  21. DO NOT move out of the marital residence.

Each particular situation is unique. If you are unsure what action or inaction is appropriate or prudent in your situation, you may want to consult with an attorney.