4 Huge Money Issues Nobody Is Talking About

    Leslie Dawson, CPA, is an forensic investigative accountant, which means she helps  with litigated matters for the firm of Glenn & Dawson, Walnut Creek, Calif. No, she is not a CSI. By definition, forensic accounting is the application of financial and accounting concepts in a manner useful to courts.

As such and working in the field of family law – specifically but not exclusively in marital law and divorce – Dawson has seen first hand the financial faux pas that divorcing women make. Here is her list of four biggest mistakes that they make.

1. Keeping the family residence.
“This is often an emotional issue with women, probably due to the kids. So, everybody jumps through hoops to arrange the deal where Wife gets the house,” said Dawson, 46. “A year later, Wife realizes she cannot afford it and/or there are too many ghosts/memories and wants to sell the home. By taking Husband off the title at the time of the judgement, Wife has just lost the ability to use Husband's $250,000 "gain on the sale of a residence" exclusion for taxes. This translates into approximately $60,000 more in tax that Wife will have to pay."   

Dawson suggests thinking long and hard about this decision. “See a financial planner and think about this. It is always very emotional, and in general it is a matter of kind of sitting back and really looking at it from a real dollar and cents stand point. Kids can adjust to a new home.”  

2. Not realizing that lifestyles will take a hit after the divorce.
“You have had one pot of money supporting this lifestyle, you now are supporting two lifestyles and both are going to take a hit. You lifestyle is going to take a hit. So will his. You will need to adjust spending and understand that, it is not possible, in most cases to continue living as you have been.” Get a budget in place, and if you don’t know how, solicit the help of a CPA or financial planner or someone who can help run the numbers for you, she said. 

3. The courts will expect you to be self-supporting at some point.
“You will not be able to live on spousal support until you die, unless there are other circumstances involved. At some point, it will end, and it is a really good idea to get a plan. Involve a vocational evaluator and find a career that would be good for you. Come up with a plan. Then go back to the court and say, “I should be able to earn X amount of dollars in the future.”   

Taking the proactive approach helps on several levels, say Dawson, especially in court. “If  a woman can demonstrate that she is attempting to change things by become self supporting, the court might reward that behavior and be more generous with support in the beginning potentially. It looks better if  she is cooperating in the process and being active participant in the future not sit back on her laurels, sooner the woman realizes that the better.”  

4. Not knowing the numbers.
“Get copies of bank statements, credit cards, all tax returns – get a hold on what the finances are...document your joint lifestyle. Start educating yourself about the finances if you haven’t already. You have got to know where the money is, and for starters, many women just don’t.”   


Lenore Skomal is author of nine books and columnist of an award-winning weekly column in the Erie, Pa., Times-News, she also teaches college journalism in Pennsylvania.