There was recently an article by David Koch in the Daily Telegraph entitled “Simple money moves to make after Divorce“, advising the 50,000 couples of divorce in Australia each year on how to financially prepare for divorce.
Whilst some of the suggestions make sense, and in all honesty are basic common-sense, Fathers4Equality would like to put forward alternate approaches not only designed to ensure that each member of the marriage gets a fair share of the spoils in the event of divorce, but where possible, that you both can find enough common ground (as its in your own best interest) to limit the huge costs associated with the simple process of getting a divorce.
Although divorce in Australia these days is what’s called no-fault-divorce, for too many people it is not no-fee divorce, and as a shared parenting advocacy group, we all too frequently witness couples who would have worked hard for decades to get a nice car, a dream holiday or to pay for those special items that enrich the lives of their children, and yet they wouldn’t think twice about throwing all these savings away, because of the heat and resentment that drives so many people in divorce.
Let us be clear here. Fathers4Equality understands the emotional dynamic of divorce. We don’t blame the parents involved. But more on that later.
1. Protect what’s yours
David Koch: A few simple steps are all that’s needed to protect yourself in the short term. There’s plenty of time to work through the bigger things, like who gets the house, later. Take your money out of any joint accounts, cancel or halt any joint credit cards and change your online banking passwords to avoid any nasty surprises if things get out of hand. Is your salary about to hit the joint account? Speak to your employer about getting it shifted. And if you have to get out of the house quick smart, round up any personal valuables, just in case.
Fathers4Equality: In general, good, practical advice. But of course if these actions catch the other partner unaware and off-guard, it could likely lead to huge mis-trust from the get-go. And who is to say that you own this personal valuables outright, or that the money that you have taken out of the joint accounts was all yours? We are of the view that this is a high risk tactic, that sets the stage for an acrimonious divorce, that will only end up costing you much more in the end.
We would suggest that all bank accounts are frozen, that credit cards are halted, and that you take a video audit of all the household items, and where possible, find the invoices of the original cost of these ietms, and from which account they were paid from.
If divorce can be foreseen long before it will actually happen, it would be prudent to avoid joint bank accounts altogether, except for one joint account for household expenses, which you would each contribute to on an equal basis weekly. These avoids so much confusion later on.
2. Dig out the documents
David Koch: It’s crucial to secure copies of all important financial documentation immediately. Don’t wait around only to find your partner has hidden or tampered with the family files. If things get messy, you’ll want to be fully across your finances.
Fathers4Equality: Good point, but make sure you copy these documents, rather than remove them from the premises. This is again a matter of building some trust, but at the end of the day, it will end up costing more money to recover these documents via lawyers, so transparency is the best policy.
3. Get a family law lawyer
David Koch: Find a good family lawyer fast. Know any lawyers or had a friend go through a divorce recently? Chances are they’ll be able to recommend someone, but if not do some research.
If you’re thinking about going without a lawyer, remember a marriage is a legal agreement and undoing it is a complex and formal process. Even if things are expected to be amicable, your partner could still engage a lawyer so it’s best to be prepared and know your rights and obligations from the start.
Fathers4Equality: Wrong, wrong, wrong, unless you are one of the super-wealthy families in this country.
And in contrast to David Koch’s assertion, marriage in practice in not a legal agreement. It is riddled with exceptions which one my find staples of contract law, and promises made prior to marriage and during marriage amount to NOTHING, even in many cases when deceit is involved.
No, to put it more accurately, marriage is an emotional bond, and a financial agreement. It is these two powerful forces that you need to negotiate to divorce successfully, without effectively destroying the remainder of your future. In short, you must constrain the emotion, and stay focussed on the bottom line, which includes limiting costs just as much as it does increase your percentage of the marital assets.
Fathers4Equality: Some other suggestions we can offer.
Gifting of Household or other personable valuables.
If you are a male, we find a disturbing trend where men leave the family home, and in some mis-guided gesture of chivalry, gift all the household goods to the soon-to-be ex-wife. As a male myself, I can understand the urge, as foolish as it is, but it must be pointed out that this gesture ALWAYS backfires on the male. Gifting household goods will not necessary be accounted for when you are trying to split the net proceeds of the sale of the family home, or when negotiating Child Support.
Fair is fair is fair, and you must be as fair to yourself as you should be to the soon-to-be ex-wife.
Sub-conscious hopes of reconciliation
We have one member who is Australian but was born and raised in India. He came to Australia, worked very hard, and at one point went back to India and married via an arrangement. His wife was studying to be a doctor, had enormous expenses to pay, and this therefore became his financial responsibility.
Well, at some point she called him from India (while still studying) and told him that she met someone else, and wanted a divorce. She offered however to pay him back what was at that stage about (AU) $250,000 in his support at that point in time.
He refused to take her money. In fact, he insisted that he wanted to continue to pay for the rest of her expenses until she finally graduated.
I can’t tell you how many discussions I had with him to try and understand his motivation, but I (along with a group of other F4E members), could only conclude that sub-consciously, this was his attempt at winning her back.
Well, I bumped into him a about 6 months ago. The long and the short of it is that she graduated, she is working, she has re-married, and she had only called him once since his final payment to her. He is living in shabby one-bedroom apartment, is all alone, is a really great fellow, but has destroyed his future because of this mis-guided sense that money and support can buy back love. It can’t and it won’t.
Binding Financial Agreements (pre/post nuptial agreements)
Do you know that you can enter into a Binding Financial Agreement even after you are married. Fathers4Equality finds these agreements the most sensible thing you can do before getting married, but if you are on rocky ground, why not start negotiating while you are still on okay terms?
Counselling & Leaving Lawyers Out of it.
If I was your lawyer during your divorce proceedings and told you that your ex has agreed to give you an extra $50,000 more than you you asked for, and end proceedings here and now, would you take it?
No need to answer, but you would be silly not to be tempted. Well, you would be surprised at how many couples spend over $100,000 in divorce proceedings, typically over items that have very little financial value themselves.
Although easy to say, when considering a divorce, be prepared to let the other side get an extra $20,000 more than what you think they are entitled to, if that also provides you with an extra $20,000, or $30,000, or $40,000.
You see, divorce should not be about “it’s not fair that he/she gets that!”.
It should be about “What can I do to get the most in assets, money and a better future for me and my kids.”
Fairness is a nebulous concept that will drive you to devastation. Think like an accountant, and imagine that you are the client of this accountant. Acting in the third person can sometimes make it easier to listen to common sense.
So if you can, listen to the inner-accountant in you, and remember that that $100,000 that you may pay in legal bills for divorce, does not deserve to go towards another Caribbean holiday house for the Judge and lawyers involved.
This money belongs to you and your kids. Keep your eye on the ball and off your heart, and remember that you have a huge history ahead of you, and its cheaper and healthier to start your future sooner rather than later, and richer instead of poorer.
And one final point on family law solicitors. Always remember that the more you litigate, the more money they make. Although they are not supposed to needlessly extend divorce proceedings, in many cases they do, because its just human nature. So think for yourself where possible. Don’t take every bit of legal advise you receive as gospel.