1. Rethink keeping the family home
When dividing assets, both parties may initially want to hold onto the house. This is particularly true in families with children, and especially so for the spouse seeking primary custody.
Ensuring that the kids stay in the family home may seem to be the right decision for their emotional health, but in some cases it simply does not make financial sense.
Kerry Hannon, financial contributor at Forbes, explains why: "[T]he best scenario, according to experts I’ve interviewed, is to sell the home and split the proceeds. The retirement savings stockpiled by your spouse may be substantial and likely to grow in the future. But a home is probably going to cost you money to maintain, and its future value is less predictable."
In other words, a house is not a liquid asset, and it won’t help pay the monthly bills. If cash flow is needed, the right choice might be giving up the family home in order to maintain financial stability.
2. Seek out benefits
If the marriage lasted for at least 10 years, one ex-spouse may be able to receive Social Security benefits from the other (even if he or she has remarried) if they meet specific qualifications, including the expectation of a lower benefit payout than their ex. If one spouse is eligible for benefits and their ex-spouse’s benefit is higher, the eligible spouse will receive a combination of benefits equaling the higher amount.
A benefit as a divorced spouse is equal to one-half of their ex-spouse’s full retirement amount if benefits are distributed at full retirement age. If the spouse receiving benefits does remarry, they won’t be eligible for their ex-spouse’s benefits as long as the subsequent marriage lasts.
If one ex-spouse has a pension or other retirement plan, any amount earned during the marriage may also be included in a divorce settlement. A Qualified Domestic Relations Order (QDRO) recognizes the right of one spouse to receive a portion of their ex-spouse’s retirement assets. The QDRO process can vary by state of jurisdiction; for an idea of how your state handles this division of assets, click here.