In Divorce, No Do-Overs Allowed

When it comes to the division of assets, you must get it right the first time

by Jeffrey A. Landers • Divorce Financial Strategist™ and the founder of Bedrock Divorce Advisors, LLC
Photograph: Photo courtesy originalpunkt/Shutterstock

“Especially in the current environment of slashed budgets and resulting staff cuts, courts do not have the man-power to handle the opening flood-gates of claims made by disgruntled former spouses who, in hindsight, think the assets they got are less valuable or more valuable than those retained by their ex,” she explains. “Additionally, not only do litigants rely on the end result in living their post-divorce lives, but changing one term could upend other terms which made up the overall package.  For example, the issues of child support and spousal support are inextricably intertwined with asset allocation.  If a wife is walking away with millions of dollars of assets, she is unlikely to receive a large or lengthy award of spousal support and she is more likely to make some contribution toward the support of the children.  And vice versa.   It’s like a house of cards — you can’t pull one out one card without the entire house coming down.  And what a mess that would make.”

So, if you’re a woman who’s contemplating divorce, please understand this: In divorce, there are no do-overs when it comes to the division of assets . . . and quite simply, that means you must get it right the first time. (In rare instances, there can be an exception to this rule. For example, if it is discovered after a divorce is finalized that there were previously undisclosed hidden assets, a judge might rule to revise a settlement agreement.)

Alimony and child support are different

You must also keep in mind that alimony and child support can be treated differently than the division of assets. Alimony and child support can be modified (either up or down) under certain conditions. (Perhaps you recall the ex-NFL wives who worried about reduction in their alimony payments when NFL players were in labor contract dispute last year?)

So as I see it, your course of action is clear. First, assemble a qualified divorce team. Then, have a comprehensive lifestyle analysis and prepare your financial affidavits. This lifestyle analysis will help you: 1) verify the net worth and income and expense statements your husband submits, 2) form an accurate picture of what funds are required to maintain your standard of living, and 3) possibly uncover any assets your husband may be hiding.

Next, carefully consider your options with regard to alimony. At Bedrock Divorce Advisors, it is our belief that an upfront, lump sum payment in lieu of alimony is, in the vast majority of cases, the preferred option if the woman is to be the recipient of alimony. By taking a lump sum, you are completely removing yourself from your husband’s sphere of influence. In many cases, the investment decisions he made were not subject to your approval, and in families with significant assets, the rational behind those investments may not be obvious. Far better to request a lump sum payment that you can then invest with only one goal in mind: your own financial future. When properly managed, a lump sum payment can lead to long-term benefits that remove your assets from speculative investments.

Ultimately, your goals are to receive the most equitable distribution of assets possible and to emerge from divorce with a stable financial future. With the right strategy, you can meet both of those goals –provided you steer clear of the likes of Bernie Madoff.

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