Covering your assets in a divorce

By Scott Reeves

updated 3:23 p.m. ET Oct. 3, 2005

NEW YORK - Bad marriages rarely make good divorces.

Torturing your soon-to-be ex in divorce court takes a little imagination mixed with viciousness and great gobs of money. If you want to make life miserable for the person, you can — often with the help of your attorney, who has a vested interest in litigating every little thing and running up the bill.

"Divorce is a simple division of assets," says Anthony Comparetto, an attorney in St. Petersburg, Fla., and author of Stop Dirty Divorce System. "But for many, divorce becomes a form of insanity. It quickly becomes more of an emotional than a legal issue — and the numbers are so simple."

For some, there is no depth left unplumbed in divorce.

"I once had a woman run into my office and shout, 'He cut the parakeet's feet off!' " Comparetto says. "The sad thing about divorce is that it shows good people at the lowest, nastiest point of their life. If you add a little pressure, some will explode."

If you want to be smart about divorce, do your homework and keep your emotions out of it. Splitting is rough enough without the anger.

Personal finance is promising territory for mischief in the hands of a nasty ex. You can fend off much of your ex's nastiness by taking some basic steps, including:

• Gather and organize all financial records and make copies of everything, one for yourself and a second for your attorney.
• Close, or at least freeze, access to all joint accounts.
• Keep a written record of all expenses run up before and during separation, including bills jointly paid and improvements made to the house.
• Document your net worth and keep a record of cash flow during separation.
• If you suspect your soon-to-be ex is hiding assets, you may have to hire a forensic accountant to sniff out the stash. Warning: This can be expensive, and if your ex is unusually devious, there's no guarantee of success.
• Before you sit down to a settlement conference, make a list of all items you want covered in the agreement. Consider the tax ramifications of forced sales of stock or other investments, and consult with your financial planner as needed.
• If there's something you know your former spouse will want in the property settlement, don't give it away in a futile gesture of goodwill — use it as a bargaining chip and trade it for something you want. The business side of divorce is hardball — and don't forget it.
• Plan to settle out of court. The attorney fees will be significantly less, and the majority of cases don't go to court. Check the settlement against your wish list before signing off.

Closing joint credit accounts and opening an account in your name only isn't difficult and should be done as soon as possible after you decide to split. The Web sites of major banks offer excellent information on the wise use of credit, including Wells Fargo, JPMorgan Chase, Bank of America  and Citigroup.

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