Ten Financial Mistakes Women Make in a Divorce | Paule, Camazine & Blumenthal, P.C. PCB St. Louis Law (2024)

By: Alisse C. Camazine

1. “My husband had an affair and I want him to pay.” Don’t waste your time or money expecting to receive revenge. It is important to hire an attorney who will act as your “agent of reality” and will tell you what the court is likely to do in your particular situation. You then need to evaluate whether the result you hope to obtain will justify the additional expense of the revenge you are seeking. Will the result be any better? Will you obtain a reasonable return on your investment? The courts are generally not interested in helping either spouse fulfill their revenge fantasies. There is almost always another side of the story about why a spouse chooses to stray. While having an affair is a moral issue for most people and therefore causes a lot of emotional trauma, there are other types of misconduct that the court considers. Trials to prove that he was unfaithful generally don’t yield the results that you want. You need to ask yourself whether you want to spend your money on your children’s college tuition or that of your attorneys’ children. AT THE END OF THE DAY, YOUR DIVORCE IS A BUSINESS TRANSACTION. Do yourself a favor and act in the best interests of your “business,” which is your family and children.
2. “He wanted the divorce, so I should get to keep the house.” Oftentimes women are steadfast about wanting to stay in the family home. There are a many good reasons for wanting to do this: The children will be unhappy and the home will provide some stability. After all, they have just been through a divorce. All your friends are in the neighborhood. However, there is nothing worse for you and your children than being “house poor.” Wouldn’t you rather have the money to go on a vacation with your kids instead of having to repair the driveway? You also need to consider that the house is not liquid (you can’t pay for groceries with your house) and keeping the house may mean that you give up all the liquid or income-producing property. It also means that in many cases you will not receive retirement monies that grow tax free. At least consider moving to a more affordable house even if it is smaller or in a different neighborhood.
3. “I should be maintained in the style to which I have become accustomed.” Don’t assume that your husband will have to support you in the lifestyle you enjoyed while you were together. While in some cases a couple is sufficiently wealthy or has been sufficiently frugal to move comfortably from one household into two, this is not usually the case. Your family will now have two rent/mortgage payments, two sets of utility bills, two subdivision fees– you get the picture. Remember that the court looks at reasonable needs. Reasonable needs do not necessarily include botox injections, trainers, country clubs, and several cars for each party, when there is not enough money to pay the cost of an additional household. If you had trouble making ends meet in one house, then you will have trouble making ends meet in two houses and something will have to change. In addition, most courts expect both spouses to seek employment. Yes, this is difficult, especially when you haven’t worked throughout your marriage and you now have to juggle the kids as a single parent.
4. “I just want this over with!” DON’T LET HIM WEAR YOU DOWN. This may make things easier now, but this won’t make things easier down the road. Make sure you get everything to which you are reasonably entitled. This does not mean there have to be exorbitant fees and years of litigation. Just make sure you are thorough before you negotiate. Get it now because your chance of getting significant additional monies later is significantly reduced.
5. “What about his expenses at work that are paid for by his company?” This is one of the biggest areas of lost income. Benefits that a spouse receives are often considered as income by a court. Make sure that an accounting is prepared to see whether there are benefits that need to be considered in his income. These include car, gas, insurance on the car, medical payments, country club expenses, etc.
6. “I’ve always relied on my husband to understand the finances and make those decisions.” Consider your divorce a learning opportunity. Make sure you have an accurate understanding of your income and expenses. Perhaps the biggest problem is that women frequently don’t pay the household bills. Therefore, they do not have access to the total picture. You need to obtain statements for every credit card and every bank account and prepare a spreadsheet of all expenses so that you understand what your true expenses are. Don’t forget one time expenses that may be paid from another bank account, such as real estate taxes, vacations, summer camps, or other large items. Don’t forget to go through all accounts, whether your name is on them or not. Even if you’ve never had access to them, you are now entitled to access. Don’t forget to think about annual gifts from family members that are used to pay bills. What about school costs paid by grandparents or family members? Collect as many bills as possible to make sure that you have a complete understanding of all of your expenses. Review the tax returns to see if there are assets you did not know exist. Don’t forget to think about future expenses that you expect– costs for college testing preparation, visiting colleges, costs of computers for kids, setting up dormitory rooms. And if all of this seems overwhelming, get assistance from your lawyer or an accountant or a financial adviser.
7. “Should I wait to get a divorce?” Two issues are frequently overlooked at the time of a divorce. The first issue pertains to your health insurance. Missouri law provides that if you lose your group health insurance coverage because of a divorce, legal separation, or the death of your spouse, you may continue until age 65 if you continue and maintain coverage under the 36 month provision of COBRA, and you are at least 55 when your COBRA benefit ends.The second issue relates to Social Security. If you are married 10 years or longer, you are entitled to receive a portion of your husband’s Social Security. It is important to calculate the time of the divorce so you do not get divorced right before the 10 year period.
8. “I’ve never understood what all of our different accounts are.” Understand the tax implications of all of the assets. If you take the retirement plan, you have to pay taxes when you withdraw the money. If you take the stock account, you have to pay taxes on the capital gains. CASH IS KING. If there is no cash, you will need to calculate the tax ramifications of your choices. Don’t get emotionally attached to one asset at the cost of the overall picture; it may hurt you in your negotiations. And make sure that an accountant reviews the tax returns or other tax issues to make sure that you receive the benefits of hidden tax deductions such as capital gains, net operating losses, etc. (If any of this sounds like Greek, don’t be discouraged. That’s what accountants and lawyers are for.)
9. “I’m so confused by this whole process. I don’t always know what choice to make.” Go with your gut. If your attorney is recommending a behavior to you or a division of property that is not what feels right to you, then ASK why and make sure that there are good reasons for any decisions you make. Take control now. This is the first step toward your new life.
10. “He wants the divorce so he should pay for it.” This is not the way it works. The court looks at how the property is divided and who has the ability to pay. The court assumes that each party can pay his or her own fees.