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Linda Leitz: Women, divorce and money: Financial independence is best whenever possible

By: Linda Leitz
March 19, 2017
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photo - Linda Leitz - Business (2014)
Linda Leitz - Business (2014) 

Basic mathematics will tell you that if a couple divide all their assets and income, they don't each end up in the same financial situation after the split. If they do this division of finances through a contentious divorce that ends up in court, they each won't even get half.

Women have made progress in getting equal pay for equal work and having fulfilling and lucrative careers, if they so desire. And while men aren't always the primary earner in a couple, many divorces still result in a woman who does not have a career that will allow her to be self-sufficient and who has not been involved in the family finances.

Whether you feel your marriage is solid or not, it's good to understand the family finances. You should know what the regular bills are, what the income is for the household and what assets and debts are owed.

Even if you're not in charge of the family money, you need to be a signatory on all accounts and know how to access everything online.

If a divorce might be in your future, get educated about your household finances. In Colorado - and many other states - money that's acquired during a marriage is marital, whether it's in one person's name or in the name of both spouses. Inheritances, gifts or what a spouse brings to the marriage is considered "separate property" and generally doesn't have to be divided as long as it has been kept only in that spouse's name.

Growth in separate assets is considered marital since it accumulated during the marriage, but loss of value isn't marital, nor is spending down separate assets.

A big mistake often made by a wife who has been the primary parent is insisting on keeping the house where the kids live. Assets are divided in an equitable manner, which means fairly. Many cases end up with the total of assets and debts divided in such a way that each spouse gets about half the value of their household net worth. So it's not reasonable to assume that you'd receive half the assets, plus the house. You do need a place to live, but you also need cash for emergencies and retirement assets. Being well-positioned financially better allows you to be a good parent - financially and as a role model - than putting all your financial eggs in keeping the family house.

Colorado statutes have a formula for spousal maintenance, which is another name for alimony. These guidelines aren't intended to equalize income for the two households after divorce but to have them with comparable means. And both former spouses are expected to utilize their skills to be gainfully employed.

It's not easy to start over after the trauma of a marriage ending. But being able to take care of yourself financially is more secure than depending on a former spouse.

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Linda Leitz is a certified financial planner. Questions for this column can be sent to gazette@itsnotjustmoney.com.

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