Do It Yourself Divorce – What gets lost
There are so many reasons that couples want to complete a divorce process on their own, without professional help. First, they want to save cost. Second, they often believe it will take less time. Third, they may be anxious about involving lawyers – for all kinds of good reasons. Certainly, the state court system in Minnesota has worked hard to develop its on-line forms, and makes them available through their mncourts.gov website.
Some critical things can get lost in DIY Divorce, however. Here are a few of them:
- Financial planning, down to the dollar. The CDFAs (Certified Divorce Financial Analysts) who work in Collaborative Practice as neutrals (like mediators, working with both marriage partners) concentrate on developing a financial plan which will be stable and sustainable for the family over time. There are 3 pieces to this: 1) maximizing after-tax income from deductions, credits and use of Head of Household status; 2) looking at patterns of historical spending by the family, to see if budgets will be short and if so, by how much; and 3) working from the balance sheet to see what can be liquidated with minimal tax impact to pay off debt, car loans, or to pre-fund children’s expenses during the difficult transition to two homes. Sometimes there are phases to this plan: for example, the first 6 months; the second 18 months; and what can be used for a longer term plan after that. No one wants to be surprised that a cash flow plan is leaving them and their children short each month.
- Child Support Calculator. Minnesota uses an on-line Child Support Calculator which is based on gross income (regardless of actual tax rate), who pays for the children’s health insurance, who pays for work-related childcare, and how many overnights each parent is assigned. In cases in which overnights are assumed to be equal, the resulting formula typically assigns minimal support, regardless of actual expenses (who covers school release days, transportation, sports activities, etc.). Modifying the 50/50 overnight schedule by even as much as 5 or more overnights per year can make a difference of hundreds of dollars in the outcome under this Calculator, which creates tremendous conflict between parents. Moreover, the Calculator does not fine-tune itself to tell parents who will be responsible for school field trips, sports, cell phones, car insurance, etc. Most divorcing couples don’t realize that this formula is arbitrary, and primarily intended to help judges make decisions which will be upheld upon appeal. They also don’t realize that they do not have to follow it – couples can create their own financial plan for meeting the children’s needs with some basis in reality, as is typically done in Collaborative Practice. In other words, couples are not bound by law to use the Calculator. But, they do need to create a detailed financial plan which describes how it will meet the children’s needs, as part of the court decree – and that plan needs to have enough detail to be approved by the court system.
- Parenting Plans – even though the Minnesota Parenting Plan legislation has been in place since the year 2000, most divorcing parents are unaware of it, and still struggle with “custody”. And that discussion on “custody” is typically an all or nothing, black/white conversation around “joint custody”, which is assumed to be “50/50 time sharing”. Instead, couples can fine-tune a plan which develops over time as children grow. This plan can address bedtime, homework, activities, flexible parenting time scheduling, future dispute resolution and introduction of “significant others” to relationship with the children and other topics. Parents who reach a detailed Parenting Plan can refer to themselves as “parents” in an actual court decree of marriage dissolution, so long as they attach a Parenting Plan to their decree as part of the official court file. Moreover, parents don’t have to be worried that the schedule set out in the plan will harm them financially – so long as they have reached a stand-alone financial plan based on real expenses, and not “overnights” as assumed by the State Calculator. A sample Parenting Plan can be found on this website through the navigation bar under “Publications”.
- Debt Treatment – the online court forms don’t go into great detail about explaining the difference between “joint credit accounts”, and “authorized user” accounts, or the importance of closing out anything that may be in joint names. This is a critical topic to get right. It is all too easy to miss a joint account which gets used after a divorce, to the detriment of one partner or the other. In Collaborative Practice, the Financial Specialists usually recommend that each partner complete a credit check to flush out all accounts which might be in existence and forgotten, and to help identify whether those accounts are “joint”, “primary with authorized user” or “individual”. Credit experts advise that closing any account which has a lengthy and responsible history will adversely impact a credit rating, and possibly affect the rating of each marriage partner. For this reason, treatment of debt, leaving joint accounts open for a period of time, and tying off joint financial responsibility of any type (overdraft protection, etc.) is important to get right.
These are a few of the important issues that often get missed in DIY divorce. Anyone anticipating a separation or divorce should be thinking about the long term impact of the decisions made, and searching for the smartest result possible, for the entire family. The author of this website offers initial consultations for charitable donations, and many Collaborative Professionals offer a first half-hour of consultation time for free. Reach out to Collaborative Practice through the contact page on this site, or directly to the author of this site at: email@example.com