Divorce Dollars

At least 40 percent of all new marriages today will end in divorce. The financial consequences of divorce can be traumatic. Many people who get divorced are left with little money, no income, and no credit rating. In some cases, if one partner looked after all the family's finances, the other partner is left unprepared and overwhelmed by the financial consequences of divorce. Divorce Dollars is a complete guide to financial planning, demonstrating in a step-by-step manner how to overcome the financial challenges of divorce and lead a financially healthy life. The book addresses everything from dividing the assets to retirement planning. By using examples of real people, Akeela Davis demonstrates how everyone can handle the financial challenges of divorce using careful planning and money smarts.

NOTICE ix
INTRODUCTION xiii
1 MARRIAGE, FINANCE, AND DIVORCE 1
Spending Profiles 2
Savers 2
Spenders 2
Savers, spenders, and conflict 3
Risk Profiles 3
Risk profiles and conflict 5
Spending Profiles, Risk Profiles, and Divorce 5
Professional Help 6
The right professional in eight easy steps 7
2 THE LANGUAGE OF SEPARATION AND
DIVORCE 15
Custody 18
Support 19
Contents
iii
Child support 20
Spousal support (alimony) 21
3 FROM SEPARATION TO DIVORCE:
AN OVERVIEW OF THE PROCESS 23
Separation 24
The Anatomy of the Divorce Process 27
Filing for Divorce 29
Settlement Negotiations 30
Settlement 32
Divorce Decree 32
4 DIVORCE: THE FIVE MODELS, THEIR
ADVANTAGES, AND THEIR CONSEQUENCES 35
Traditional Divorce 35
Mediated Divorce 37
Arbitrated Divorce 39
Collaborative Divorce 40
Do-It-Yourself Divorce 42
Considerations for Selecting a Divorce Model 43
Abuse-motivated separation 43
Trial separation 44
Forced separation 45
Mutually agreed separation 45
5 YOUR MONEY ISSUES 49
Net Worth Statement 50
Your assets, or what you own 52
Your liabilities, or what you owe 57
Cash Flow Statement 58
Income categories 59
Expenses 62
iv Divorce Dollars: Get Your Fair Share
Into the Future 66
Future expenses 66
Future income 72
Go with the flow 72
To Keep the House or Not to Keep the House:
That is the Question 74
Don't Forget Your Other Assets 76
Pensions 77
Registered retirement investments 79
Dividing liabilities 79
Emergency Funds 80
Protecting Yourself and Your Loved Ones 80
Powers of attorney 80
Wills 81
Beneficiary designations 82
The Value of a Career 83
Insurance 83
Home (or property) insurance 83
Life insurance 84
Disability insurance 85
Critical illness insurance 85
Long-term care insurance 86
6 SEPARATION AGREEMENT CONSIDERATIONS
AND SEPARATION PREPAREDNESS 89
Protection for Children 91
Special Expenses 92
Children's Education 94
Parenting Plans 94
Spousal Protection 95
Contents v
7 STARTING OVER: YOUR NEW
FINANCIAL WORLD 97
Financial Planning Considerations 98
Debt reduction 100
Savings 100
Investments 101
Risk management 102
Beneficiary designations 103
Power of attorney 103
Will 103
Marriage or cohabitation agreement 104
Children and your cash flow 104
8 REMARRIAGE PREPAREDNESS 105
Marriage Contracts/Prenuptial Agreements/
Cohabitation Agreements 106
Frequently Asked Questions 107
What If There Is No Agreement? 112
Incoming assets 112
Matrimonial home 113
Gifts, inheritances, and insurance settlements 114
Joint assets 116
CPP income splitting 117
Banking issues and money handling 117
Financial Management Considerations
in (Re)Marriages 117
AWord of Caution 118
AFTERWORD 119
vi Divorce Dollars: Get Your Fair Share
Contents vii
APPENDIXES
1 Worksheets 121
2 Tips on Preparing for Separation and
Settlement Checklist 128
3 Child Support and Enforcement Resources 134
SAMPLES
1 Net Worth 53
2 Historical Cash Flow: Income 62
3 Historical Cash Flow: Expenses 67
4 Post-Divorce Expense Estimator 69
5 Post-Divorce Expense Estimator with
Child Expenses Separated 71
6 Post-Divorce Income Estimator 73