One of the more unfortunate aspects of divorce is that you must make major decisions regarding your future at a time when you may barely be able to think at all. Before you sit down to negotiate a settlement with your spouse, it's sometimes helpful to meet with family, friends or your attorney and allow them to be your voice of reason. Make a list of what you want from your divorce and honestly listen to the pros and cons of what might happen if you get them.
What happens with the home you’ve been living in for years is often one of the most emotionally charged issues in a divorce settlement. If you want to retain it, keep in mind that you’ll probably have to buy out your spouse’s share of the equity. One way to do this is by refinancing for more than the existing mortgage balance when you change the mortgage into your sole name. Before you ask for the house, make sure you can handle the resulting mortgage payments if you have to refinance to include this extra money. It won’t do you or your children any good to keep the home, only to lose it to foreclosure a few years later. Depending on your income, you might be better off asking your spouse to buy out your interest, or to sell the home, so you can start over with a mortgage you can more easily afford.
When parents agree to a custody and visitation schedule in the process of negotiating an entire marital settlement, it’s easy to overlook little details. If you have a certain holiday tradition that you don’t want your children to miss out on because they’re with their other parent every other Christmas or Passover, provide for this ahead of time. You can give up another holiday on a regular basis that’s not as important to you, or offer your spouse an extended chunk of time with the kids in the summer instead. It can be costly to revise your parenting plan after your divorce is over, so try to make it as workable as possible. Ask for one that addresses a variety of potential situations.
When you’re analyzing which assets you want to keep, consider their impact on your budget. Retirement accounts, stocks and bonds might reflect well on your net worth and provide for your future, but if you’re struggling to make ends meet now on half the income you enjoyed when you were married, those things won't help much. In an emergency, you can cash such accounts in, but there are usually penalties and tax implications. If your post-divorce budget looks tight, consider giving up investment assets and asking for liquid assets or a little more alimony instead, if alimony applies in your case. However, remember that alimony is taxable to you as income. If you end up owing the IRS more at the end of the year, this might not be an advantage.
In addition to dividing assets, you and your spouse will have to apportion joint debt between you. Ask to have your name removed from joint accounts your spouse will be responsible for paying. One way of doing this is to have him move the balance on a joint account into one in his own name, closing the joint account. Your credit may end up being one of the most important assets you take from your settlement, so try to protect it.
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