Weathering the Divorce Storm
It’s time to divorce your spouse, but your spouse controls all of the money. You depend on their income. They control all the accounts. They pay the bills or deposit enough money in a joint account for you to do it. You have little to no savings of your own, not even enough to hire a divorce lawyer. Even if you hire a lawyer it may take 60 days or longer to get in front of a judge and to get orders for economic support. What do you do?
The key to preparing for a divorce is hoping for the best and preparing for the worst. This is especially true if your spouse makes or controls the household income and you worry that when they learn of your desire for a divorce, they will use the money to pressure or control you. If you are in this situation, you’ll need to move cautiously, and prepare for what we call the 60-day divorce storm.
Your spouse makes all the money, controls the bank accounts, and watches the credit cards like a hawk. You want a divorce, but the scrutiny of the finances, and dependence on the income is intimidating, and limiting.
Choosing to divorce your spouse, who controls all the income is a scary proposition. You need income to buy food, pay rent, make a car payment, health insurance, and hire an attorney. If you tell them you are filing for divorce, are they going to keep paying the bills? Maybe, and maybe not.
You will have to face the next questions even to start the divorce process.
- How will you pay your bills if they cut off access from the bank accounts?
- Can you stay in the home, will you have to move out?
- Where will you get the money for the rent, and the deposits?
- Is moving out abandonment or will it prevent you from getting half of the assets?
- How will you get money to hire an attorney?
These are some serious questions. The answers relate to money, and require a legal remedy. If the divorce happens and your spouse blocks you from all finances, then you will need to visit the judge and get temporary orders to keep the money flowing. Unfortunately, this requires time and money to hire a divorce lawyer.
The courts are busy, and a request to a judge may take 60 (or even 90) days before a judge makes an order. The time between being cut off from funds and the day a judge makes an order for attorney fees, temporary income support can be a nauseating 60 days. 60 days can feel like an eternity when bills are piling up.
The best strategy to weather the divorce storm is planning, thinking of contingencies, and then planning some more. Here are our top tips for planning, and handling a divorce storm.
Should you stay in the home or leave? This might be your first question to consider. From a finance and budget sense, we recommend staying in the home as long as you can.
Leaving places financial burdens on you. If you leave, then you’ll need to have money for housing, utilities, food, etc. Your spouse is not required by any laws to pay for your new residence. We may get a judge to order him to pay for these expenses eventually, but again we are talking 60 to 90 days before a hearing will be scheduled for the judge to make this decision.
In spite of financial reasons for staying, there may be emotional or domestic violence reasons for leaving the home. Emotional or physical abuse can make living together impractical or unbearable. If you are in physical danger, then you need to leave. Hopefully, you have friends or family you can stay with until a court order is made. If not, look into the local shelters. The might have additional options to keep you safe.
You may also want to look into filing a temporary restraining order (TPO). A TPO, if granted, will require your spouse to leave. He is still not required to keep up the bills, or expenses of your current residence, but sometimes you can only make the best move and see what happens next. Remember, hope for the best and prepare for the worst.
If you move out, you are not abandoning any rights to the property. The court doesn’t penalize you for moving out. You will still be entitled to an equal division of the equity in the home, the bank accounts, the pensions, and alimony. Community property is community property whether you are in the house or not.
Now child custody is a different issue. If you move out and don’t keep up visitation with the children, you could create a “de facto” custody argument. De facto means this is the custody schedule you have been okay with. So why should a judge change it?
For example, if you move out and for 6 months you only see the children 2 days a week with no overnights. Then you file a divorce, and you ask the judge for primary physical custody of 5 days and overnights a week. The judge is likely to question why they should change the schedule. For the last 6 months, you have accepted 2 days a week. The courts like stability and don’t adjust schedules that seem to work. Be careful falling into this trap.
If you move out, try to see the children regularly. Think of a parenting schedule you would like the judge to order and try and live that schedule. Then when you file for the divorce the judge is going to lean heavily on the current schedule you have had while being separated. If there is a threat to the children, you and your lawyer can seek emergency temporary custody orders.
Legal separation is not needed to move out. This is a common misconception. You can move out of your house without a legal separation. Moving out is called a physical separation, and there is no law against this. Just keep in mind the custody issues discussed above.
Not all, but most spouses will fight to keep as much money as they can. This battle can result in you having a shortage of money to fight your divorce, and to pay the bills. The strategies for stowing away money, or having access to cash is essential for a smooth divorce.
Withdraw the cash, and establish lines of credit. You will need money or credit to hire an attorney and to pay bills. The first place to look is your current bank accounts and savings accounts. All the money in bank and savings accounts earned after the date of marriage is presumed to be community property. This means there is a presumption that half of this money is yours.
Technically you can withdrawal half this community money and put it in an account with only your name on it. This is an aggressive move, but not against the law. Whether you should do this is a difficult question to answer. Talk with a divorce lawyer about the timing of making this money grab, and how much to take.
Credit cards or credit lines are an excellent resource to turn to when needed. The charges on these credit cards are considered community debts, and the court will look to assign the debt to a spouse.
Another option for the court is to deduct these credit card balances from the community property assets before dividing it. The net result is you would get half the assets minus the credit debts, and he would get the debts because he currently has an income to pay the debts.
What if you don’t have credit cards in your name? An often-used trick is to open credit cards in your name with your spouse a co-signer. You are planning a divorce, but until you divorce, you can apply for credit in a spouse’s name.
Different credit cards have different requirements. Some need a spouse’s approval and signature. Other’s only require a social security number and your authorization to run their credit. Be careful with this approach. Your spouse may be alerted to a credit line being opened up with his credit.
Don’t misuse the credit lines. These credit lines should be used only in case of emergencies to get you through the 60-day divorce storm. The court will not appreciate you opening credit cards and spending the money frivolously.
Family and friends can be a great resource. They may be able to help with a place to live and with income. Talk with your family and see if they would be able to help if you become cut-off from funds and need a loan or a place to stay. If they do give you a loan, then make sure to get something in writing to pay them back. This loan may be a debt the community needs to pay back.
In a Nevada divorce, the court will schedule a temporary orders hearing. This hearing is about 60 days or 90 days after a divorce is filed. At this hearing, the judge will look at budgets and make orders of which spouse will pay what. This is often called temporary orders of support. The court may also may temporary orders of custody and look at giving a spouse exclusive possession of the home. Another request at this hearing might be for attorney fees. This is called a “Sargent Motion,” and stems from the case of Sargent v. Sargent. A spouse who makes or controls all the money is required to share some of that income with their spouse to hire an attorney.
Having your own savings account in your own name will help if you are economically cut-off from your spouse. Socking money away may help through the divorce transition until a judge can set spousal support, or temporary income. It may even be a nest egg to use after the divorce.
Your goal should be to save up enough money to cover your budget for at least six months. That might sound like a lofty goal. It is and planning is essential.
Start by finding income to save. Cut unnecessary spending and look to save as much as you can. But now, more than ever, you need to be honest with yourself about the difference between “need” and “want.”
Career choices might be an option. If you are not currently working because that was the arrangement between you and your spouse, you might rethink the arrangement. You might look into career counseling, re-training or going back to school. Do it now while you can.
The other advantage of career planning is the long-term finance effect. Dividing up the assets and collecting alimony rarely leads to a land of riches. At best you will be looking at living your life on half the current assets and half the net income earned by your spouse. A career fills in the gap.
You might look for a small side business. Even if you don’t have time to save up six months of living expenses, it is better than nothing. Uber drivers, or realtors is a common side business we see people turn to.
How much money do you need? The answer affects more than your ability to weather the divorce storm. It is also important when it come to requesting temporary support and alimony from your spouse.
We recommend using a spreadsheet to document bills and expenses to create a budget. You are creating a future budget. Try and think about the expenses your will have. Looks for expenses you can cut. List them all out and then list income you earn, if you work.
The net amount will be the gap you need for the court to order your spouse to cover. Figure out how much money you bring in each month. The court will view this budget when making temporary orders and when making more permanent orders like alimony.
Make sure not to forget the following when working on your budget:
- Car payments
- Insurance (health, life, disability, home/renters, car)
- Essentials for your children
On a side note, when you’re creating a budget for yourself after your get through the divorce storm (because you will) make sure to save for retirement and a rainy day fund.
If you are planning the divorce and need time then you need to keep your divorce preparation under wraps. Change your passwords to your emails, keep your mail private, clear your computer browsing history if you are going to divorce website, and clear your phone history if you are calling a divorce lawyer, and watch your social media.
No changing your status, or making comments about your spouse. Your spouse may have no idea you are planning a divorce. A stray email, or a letter could send up a flare.
You will need documents for the divorce process. To properly divide the assets, divide the debts, and award alimony court will need evidence support the amount of assets.
They court will want to see bank account balances, IRA account statements, mortgage statements, etc. Now, might be a good time gather some of these documents for your divorce lawyer. Copying these documents is not illegal and could save your attorney valuable time and expense. It will save you time and money down the road to get as much information as you can now instead of finding money to hire someone to do some forensic accounting on your behalf.
If you think your spouse might be financially abusive, talk to your divorce lawyer about it. Also start keeping a log of anything that might constitute as financial abuse. Write down what they said or threatened, the date and time, and location.
Know your goals or wishes from the divorce is a tip clients don’t fully appreciate. We know you want a divorce, but we don’t know what you want from the divorce. Do you just want a piece of paper that says your divorced? Probably not.
You want some terms added to that divorce that provides for how the assets and debts will be divided, who will stay in the home, what will happen to the equity in the home, how much child support or alimony you will get, etc.
Well, if we are to ask a court for these terms we should have an idea of what you would like. Divorce is a beginning, not an end. Begin by having a goal in mind and then your divorce attorney will know what they need to ask the judge for.
No matter how ready you are for the whole thing to be over and in the rearview mirror, how well you and your ex-to-be get along, or how simple you think the process will be, you are likely to need a lawyer. Lawyers can help you avoid divorce mistakes that can cost you later.
If you are reading this article because your spouse might financially pressure you, then doubly so. You’ve put years into your marriage and it’s only fair that you have someone to help you land on your feet.