What to Remember When Drafting a Divorce Order

Jessica Woodruff

So Brangelina are now officially over. Some thought it was a union made in heaven. While others thought Karma would soon catch up with both of them.

Angelina Jolie filed for divorce on Thursday, 22 September. This after a union of over ten years and a marriage lasting just over two years.

divorce

She has asked for sole custody of their children and to grant Brad visitation rights.

7 Points to Remember When Drafting a Divorce Order

1. Specify Security For Spousal Maintenance in the Divorce Order

The tales of the rich millionaire being ‘taken care of’ by their greedy money-loving lover is a canon that keeps most Hollywood producers afloat.

In the event of the spouse’s death, the living parent would become the children’s legal guardian and responsible for all finances given to the children.  It is advised to issue a ‘Guardian Trust’ whereby all money accredited to the children is handled by a guardian, other than the spouse.

Many a divorce court battle has resulted from skipping over this information. Failure to specify what your ex-spouse and children are each entitled to, may result in an undesirable situation where your ex-spouse receives all of your children’s benefits as a result of being their legal guardian.

Make sure ALL your financial requirements and allowances are addressed in court and when detailing the settlement agreement.

2. Specify Which Benefits Are Linked to Inflation

This is linked to maintenance, medical costs and the education of the children.

Medical contribution increases are usually much higher than the consumer price index (CPI), as is the cost of private schooling. A more realistic approach, such as actual costs that are tabulated, should be considered.

3. Any Benefits of a Life Policy Should Be Accurately Described

Names of the particular policies and insurance companies need to be included. Be warned, a change of beneficiary (the ex-spouse) needs to also be validated by the specified insurance company and cannot just be an intended beneficiary nomination.

4. A Thorough Evaluation of All Assets

Due to the high number of divorces, especially in the high net worth market, this has become somewhat of a specialist area. All assets require accurate appraisals by a professional appraiser.

Tip: It is not necessarily a good idea to convert all assets to cash. For example, it may not be a seller’s market in the property world and thus it may not be the best time to sell the family home. You may also get far less for other valued assets which have more of an emotional pull then financial value. It is better to decide who get’s what.

5. A Thorough Evaluation of All Business Assets

This is often a lot trickier to investigate and receive funds from as the owner cannot dispose of assets without the consent of co-shareholders or without burdening his income-earning capacity. Your divorce attorney should ideally partner with an asset expert to thoroughly examine all assets.

Be warned, looks can be deceiving and although the business owner may look flushed for cash, all money could possibly be tied up in debt and assets unbeknown to the spouse.

6. Lastly, Employ a Qualified Financial Advisor and Attorney

Drafting a divorce order can be an extremely complex matter both financially and emotionally. By enlisting the help of your own financial and legal advisor, you are able to make smart decisions about your future.

A lot can change following a divorce and a financial expert may be needed to work out a workable budget and realistic spending allowance. This in order to make sure you get all that you should in the divorce as well as preparing to manage your finances alone in the future.

7. Get Legal Insurance to Cover All Of The Above

Getting a divorce can be a costly process. Ensure you are sufficiently covered.

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