Timing is Everything
Divorce does not happen overnight. Just as you don’t jump into a marriage, getting out of it should also be a well-thought-out move.
Because it is a long and tedious process that may drag on for months or even longer, it’s important to take steps to lessen its emotional and financial impact on both partners and the family.
When it comes to divorce and when to do it, timing is everything.
When is the Best Time to Divorce from an Emotional Standpoint?
January has recently become known as “Divorce Month”. Maybe it’s because people are reluctant to rock the boat during the holidays, so they put off filing for divorce until January. Some attribute the spike in figures to holiday stress which can put even more pressure on an already cracking marriage.
A recent study based on data gathered between 2001 to 2015 seems to affirm this. The period between January to March shows a spike of 33% in the number of divorce filings.
From an emotional wellbeing standpoint, filing early in the year does make sense. Barring any major hitches that can derail the process, it’s possible that divorce may get wrapped up during the summer. While there will never be a good time to divorce, finalizing a divorce before the start of a new school year gives you and your kids time to adjust to the new normal.
A divorce during the school year can be disruptive, especially if it involves making a move to a new home and possibly new schools. This can be stressful for both ex-spouses and extra traumatic for the kids.
Imagine your kids leaving the friends they have in their old school and transferring to one where they may not know anybody. Add to it the stress of the divorce itself, and this can be emotionally scarring.
When is the Best Time to Divorce from a Financial Standpoint?
If divorce is inevitable despite your best efforts, you and your soon-to-be ex-spouse can take certain steps so you can emerge from your divorce in the best financial situation possible. Here are situations that can give you better fighting chances, financially.
When There’s Minimal Credit Card Debt
As a Certified Divorce Financial Analyst®, my first piece of advice would be to assemble your financial documents so you get a complete picture of your household finances. Doing so will not only give you an idea of how many assets you jointly own with your spouse, it will also outline all joining and individual debts.
In California, this is important because it is a community property state where property and debt acquired during the marriage are considered owned by each spouse equally. If your spouse has accumulated credit card debt during the marriage, you are both legally responsible for this debt. If one of you defaults, the other spouse will have the financial burden.
If you’re contemplating divorce, timing it when your credit card debt is at manageable levels is a wise financial move. Sharing a smaller debt burden equally with your spouse can put you in a better financial position.
When Your Credit Score is Good
A divorce can land a serious blow to your credit score. This can happen as bills are missed while the settlement is not yet finalized.
When your credit score is good, this makes it easier to find a new home to rent or to own. This also makes it easier to purchase a car of your own, for instance, if your ex gets the car during the settlement.
You and your spouse can also consider waiting a year or two before filing for divorce to give yourselves time to boost your credit score so it can fare better as it is put under the financial pressures of divorce.
If you are planning to file a divorce, you will be in a better financial position if you plan ahead. Establish your own credit and open up your own bank accounts. Such moves lay the foundation for a more secure financial future.
My suggestion as a Certified Divorce Financial Analyst?
Obtain credit cards and open checking and savings accounts under your own name.
Obtain a copy of your credit report. Correct any errors it may contain.
Seek professional advice on how you can boost your credit score
When the Real Estate Market Favors Sellers
While some people will want to hold on to the family home for sentimental reasons during the divorce, it is often more logical to sell the house and split the proceeds to afford smaller and separate homes for each partner.
For a scenario like this, the best time to divorce is if it’s a seller’s market. This means you and your spouse can maximize the proceeds you get from the sale of your home. This can give you enough to cover all mortgages and perhaps have money left over to split with your spouse.
On the other hand, if the real estate market is in a slump, you may agree to have one of you get the house as part of the settlement. However, the spouse who will continue living in the property may prefer to divorce during a weak real estate market so that he or she will not have to sacrifice as many valuables to the other spouse.
When You’re Expecting Extra Income or Assets
In a case like this, it is better for the spouse who is anticipating an inheritance, bonus or raise to have the divorce finalized before coming into receipt of these extra monies. Under California community property laws, any inheritance or assets that you receive after the divorce is finalized will likely remain under your name.
When the Children are Older and in High School
When there are minor children involved, divorce becomes more complicated as there are more arguments that relate to child custody and child support. The parent who pays child support may be required to do so for many more years.
When divorce is finalized when kids are older and in high school, the spouse ordered to pay child support may only have to pay it for a couple of years. Obligation stops as soon as the kids reach legal age.
On the other hand, it may qualify your child for student loans or grants that may not be open to them if they are still part of an intact family. These programs only consider the income information of the custodial parents to determine eligibility for financial aid.
The Best Time To Divorce: I Can Help
If you are contemplating a divorce or are in the middle of one, let me help. I give you valuable advice on financial decisions you make during the divorce process so you emerge finally strong and empowered after. Get the assistance of Kimberly Surber, a Certified Divorce Financial Analyst®.
Kimberly provides step-by-step guidance on matters related to divorce. With a wide range of experience and expertise related to divorce issues, Kimberly will simplify the process and provide much-needed clarity in areas such as long-term tax consequences, asset, and debt analysis, dividing pension plans, continued health care coverage, stock option elections, protecting support with life insurance, and much more.
This information is not intended to be a substitute for seeking legal advice from an attorney. For legal or tax advice please seek the services of a qualified attorney and/or qualified tax professional.