In divorce negotiations, who gets what asset can be the most difficult part of the whole process. People sometimes have the winner-take-all mentality, which leads to prolonged divorces. Negotiating is like a dance. One person takes a step backwards and the other one goes forward. The partners move in sync and sometimes apart from each other. They dance around some of the lesser issues to concentrate on what is most important to them. As in dance – flexibility is important. If your spouse is not going to budge on one item, go after something similar, or two smaller ones which may have an even greater value when combined.
Here are tips for negotiating a fair divorce settlement:
1. Lawyers and mediators are quite skilled in assessing and dividing property and investments. That said, consider having a neutral financial consultant on-board to help with a fair distribution. They can look at the assets in totality and advise a balanced split so one party does not get mainly retirement pensions and the other one cash. A few women now in their 50s who got more in liquid assets and very little in retirement benefits are worried about their futures. Who knows what social security payments will be in the next decade and beyond.
2. Look at what your present needs are in order to determine what assets are most advantageous to you. If you are a few decades away from retirement, it may be in your best interest to receive a bigger chunk of liquid funds. This way, you can buy a house and pay off the mortgage. Being free of a mortgage puts more money in your pocket even with property taxes, upkeep, and insurance bills. Perhaps student loans could be paid off if getting a lump sum settlement. If unsure what to do in your circumstance, meet with your own personal financial advisor for guidance in choosing which type of assets you would like.
3. Know the tax consequences of splitting assets, especially retirement ones. It may be prudent for the lower earning spouse to take ones that will be taxed in their lower tax bracket. Compensation can be made for this, but then wealth stays with the divorcing spouses as opposed to the government’s taxation department.
4. Dividing assets is not black or white; there is a grey area where you have some wiggle room. If one spouse is to receive the bulk of household goods, check their value on online sites such as Craigslist. Point out the dings and flaws which lessen their value. If neither party wants furniture and so forth, sell them to split the proceeds. I was allotted more of the furniture, which went for a pittance when I got rid of it later. If splitting a collection such as old coins, determine the worth of each item within it. Some individual pieces can be worth vastly different amounts, so do not just split the collection down the middle.
5. Before starting divorce negotiations, determine what your immediate and long-range financial goals are in order to get the best mix of assets for you. Think about personal ambitions too, which could affect the distribution of assets. If you are needing to update career skills, then funds for courses may be added into your settlement. If out of the job market for a while, see if a Master’s Degree is now the entry level to start back, as it is currently for some professions. You may have to do additional training that will take you out of the workforce temporarily and need money during this period. These are financial issues which could increase one’s divorce settlement. It may be worthwhile to have a career coach on the divorce team to sort out these issues.
6. If your spouse’s request seems reasonable, then grant it. If a joint possession is very dear to you, then be willing to participate in the dance of negotiation. No one gets everything they desire, but negotiating makes getting what is most important possible in divorce.