Editor’s note: This is the fourth in a series of articles on how to make sound financial decisions for divorcing couples.
FULTON, Mo.– University of Missouri Extension family financial specialist Vivian Mason says divorcing spouses can make better decisions for their individual futures if they have reasonable expectations of the divorce process.
She offers the following true-false quiz:
1. Fair market value is the price at which a buyer is willing to purchase an item and a seller will sell an item.
2. At the time of divorce, all property must be divided and all conditions fulfilled.
3. Staying in the marital home is a wise economic and emotional decision for the custodial parent.
4. It is important to hide assets when completing divorce financial statements.
5. Life insurance and pensions are assets to be considered for distribution by divorcing spouses.
6. If a divorce attorney bills $300 per hour in increments of a 1/10 of an hour, a 12-minute phone call will cost $60.
7. Under COBRA, divorced people can continue health coverage under an ex-spouse’s health insurance plan for 18 months.
8. Generally, someone who was married at least 10 years prior to divorce is eligible for spousal benefits under Social Security.
9. Child support and visitation orders can be heard and amended by the court before and after a judgment of divorce.
1. True. This is important when determining the value of assets. What you gave for a piece of property does not determine its value. It may have appreciated or depreciated over time. This is especially true in today’s real estate market.
2. False. A plan to divide property will be created, but property such as a house or land may not be sold prior to the divorce. This is also true of investments, retirement and pension plans, and insurance.
3. False. Staying in the marital home may not be the best financial decision for the custodial parents, Mason said. The custodial parent will have to determine if he or she can continue to pay all costs associated with the house when spouses will be supporting two, rather than one, household. The custodial parent will need to put emotions aside when determining whether to stay in the marital home.
4. False. Never hide assets when completing divorce financial statements.
5. True. Life insurance and pensions are assets that are often overlooked, but they are important.
6. True. Every phone call you make is billed. Don’t use your attorney as a sounding board to complain about your spouse. If you need to vent, talk to a friend. It’s less expensive. Mason also reminds divorcing couples not to get hung up on low-value items or details. Pick your battles, she says, and remember fair is not always equitable.
7. False. Under COBRA, divorced (or widowed) spouses may continue health insurance for 36 months at the full cost. This applies only in cases where the spouse’s health benefits are subject to the COBRA provision.
8. True. If you have been married to the same person for 10 years or more, you are eligible to draw benefits off of his or her Social Security account if the benefit is greater than your own would be. You must be unmarried, but your spouse may have remarried, and you must be over 62.
9. True. Child support and visitation orders can be heard and amended by the court before and after a judgment of divorce. Many changes can be made, as there are often changes in residence, income and other issues. However, divorcing couples should remember that this likely will involve additional attorney fees. Mason reminds divorcing couples that they should not “settle” for a 50-50 property split without considering income and/or health disparities. Don’t “go soft” on property settlements to have easier discussions about custody or “give in” to an ex-spouse because that has always been the way it has been done in the past.
For more information on financial planning and divorce, go to www.extension.missouri.edu/callaway/divorce.aspx.
Related MU Extension publications available for free download:
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