Important Financial Planning Considerations in Divorce
| Author | Marty Babitz |
| Pages | 11-13 |
SUMMER 2020 11
The author, freelancer, and journalist Gerald
Lieberman once said: Divorce is a declara-
tion of independence with only two signers.
Despite this optimistic interpretation, it is
no surprise that divorce can be emotion-
ally and nancially traumatic. It is
important to have the knowledge and condence to make
informed nancial decisions. Going from sharing nancial
decision-making to complete independence can feel daunt-
ing. Who helps ensure you are on the right track? What is a
reasonable budget? Can I stay in my house? What is the
impact of alimony or child support, or both? How should I
deal with our debt? How do I want to distribute my estate?
Many nancial questions can be solved with a calculator
and proper formula, but the complexities of divorce require a
more active approach. e surest way to navigate the short-
and long-term challenges that lay ahead is to have a compre-
hensive plan based on solid, practical advice from a knowl-
edgeable partner. e right team of advisors can help give
you the condence to make those decisions on your road to
nancial independence.
A pilot never takes o without knowing where she wants
to land. Take the time to consider where you want to land
and how you want to get there. is goes beyond mere goals.
You should feel condent that you have the knowledge to
chart your own path. e clarity and insight required to
accomplish this demand a level of self-care that is not
typically needed for most nancial decisions. Following a
divorce, you may be thinking about everyone other than
yourself—your children, parents, family, and loved ones. We
are all familiar with the airline mantra, in the event of an
emergency, please put on your oxygen mask before assisting
others. ey say this because if you run out of oxygen, you
cannot help anyone else. Your nancial health is no dierent.
The Family Home
Among the most emotional assets in a
divorce is the family home. is asset has
implications beyond memories and can be
one of the most signicant disrupters for
dependents. e house also typically represents one of the
largest marital assets. A critical decision is whether to keep
the marital home. is is not a black or white question. You
may want to keep the home until the children move out or
go to another school. Perhaps you have the liquidity to
convert it to an income-producing investment property
rather than selling it. e costs of maintaining the marital
home remain constant with an income/asset base that is
lower, creating a rather clear challenge. Often, the decision to
keep the home, and for how long, can substantially impact
the probability of nancial success. It is incumbent on you to
work with someone who can provide the proper analysis so
that you can understand the potential outcomes. You must
also bear in mind that mortgages or other encumbrances on
the property must be resolved prior to nalizing transfer of
the property.
When and if you decide to sell your home, you must
decide whether to buy a new home or rent one. Often, a
former dependent spouse may have diculty obtaining a
mortgage, even with substantial assets. e lack of income
Important
Financial Planning
Considerations in
Divorce
By MARTY BABITZ
Published in Family Advocate, Volume 43, Number 1, Summer 2020. © 2020 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof
may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
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