way to double your dollar is to fold it in half, but perhaps the
fastest way to halve your money is divorce. Divorce is one of the
problems in financial planning for which people never plan. And
if one starts planning for it, it becomes a self-fulfilling prophesy
and the marriage is doomed.
cuts an estate into two, not necessarily equal halves, but reduces
two people to less than their previous life style habits. One home
may have to be sold, or one party may have to find rent money, while
the mortgage payments shift to one shoulder.
courts will warrant payments for child support, children will be
shared via visitation and custody, motorcar payments will shift,
life insurance policies and bank accounts will have to be re-examined
life insurance policies that name married women and children as
the beneficiary create an irrevocable trust. This is a relationship
of trust that cannot be reversed except if the named beneficiaries
are of legal age. Then they must be willing to sign a release of
their claim to the life insurance proceeds.
is because life insurance is designed as a device to protect dependents
financially by replacing some income, upon the death of the breadwinner.
The law interprets that those who marry and those who have children
from a relationship, have an obligation to provide for them financially.
They cannot be abandoned in law.
children below the legal age are named as beneficiaries they cannot
be released, so while a wife may sign the release, minors cannot.
estates are lost out of spite and animosity, when insurance premium
payments stop upon divorce, because an equitable solution is refused.
property, lands, buildings, cars, household effects also have to
be legally transferred, and sometimes the complication may lead
to abandonment of the property itself eg if the property has an
improper title in the first place. The one who gets the house will
now have to pay for repairs.
addition there may be attempts to cheat one party out of what they
may be entitled to in the divorce. Some assets are never transferred
and that can lead to headaches for heirs, generations later. People
often forget about tax liabilities, liquidity and cash flow issues.
If there is a business involved there are further complications
since the business now has to be valued and brought to the negotiation
if the reason for the divorce is a third person, than one may spend
the rest of life supporting two families, instead of onean
ever greater subdivide of earnings and assets. But it doesnt
always end there: after one dies, heirs from the different marriages/relationships
are likely to fight over the estate, and contest the will in court.
This can prolong probate up to five to ten years.
making a proper will that avoids contest in the courts, it is recommended
that you leave consideration, some dollar amount, for every possible
heir, including any children from clandestine relationships. It
is even more critical, if you have experienced divorce and remarriage.
Remember too that remarriage negates any previous will.
is really an expensive thing. The lawyers make money over your distress.
Mediation is a sound alternative, is cheaper and may actually resolve
the issues and prevent the divorce.