A financial planner has warned anyone going through a divorce not to discuss their finances with their friends and family, as she shared her best tips for processing a legal separation.
Marissa Reale, who specializes in helping women get the best deal out of a separation, has revealed the five things that every separating couple should know in a TikTok video.
This includes not listening to the advice of loved ones, because even if they might have your best interests at heart, 'every situation is different,' she explained.
'At the end of the day your family typically doesn't know estate laws or tax laws or divorce laws,' she told DailyMail.com.
'Plus they don't necessarily understand financial planning. So they might tell you to fight for the house, for example, but that might be the wrong thing to do.'
@getdivorceready Divorces can be tough, but you don't have to feel like a fish out of water. Here are five tips that will make navigating the process easier. Tip 1: Think long term - focus on what's best for you and your family down the road, not just right now. Tip 2: Don't listen to friends and family - although they may have your best interests at heart, ultimately divorcing is between you and your spouse. Tip 3: Have a budget - it's important to know where your finances stand during this transition period. Tip 4: Hire a financial advisor - if budgeting isn't something you're comfortable with, that's ok! Partnering with an expert can help you make better decisions. Tip 5: Don't go to court - if possible, settle outside of the courtroom. Trust me, it'll save you time and money in the end! #DivorceFinancialHelp #divorcefinancialplanning #divorcedwomen #divorcedwomenover50 #divorcecourt #financialaffidavit #DivorceHelp #DivorceTips #DivorceAdvice #divorcelawyer
♬ original sound - Marissa Reale - CDFA, CRPC
Reale shared her top five tips that Americans need to know before going through a divorce
Her first tip was not to make important decisions without thinking about the long-term consequences.
'It's easy to get caught up in all of it and agree to things that won't make sense for you in the long run,' Reale, who has over 15,000 followers on TikTok and has advised over 300 clients, said.
'Number three is every woman should have a budget,' she continued. 'This can help you get more alimony and get more child support - plus you'll know what your needs are going forward.'
Her fourth tip is to get financial advice before bringing on a lawyer.
'Look to hire someone like me,' she said, 'a financial advisor that can help you make financial decisions and know what to negotiate for.'
Finally, she said: 'Settle outside of court if possible using meditation or arbitration. This will save you time and money.'
Reale previously advised that women going through a divorce are too quick to take the home in a settlement and should consider splitting their ex-partner's 401(K) instead.
She said financial illiteracy is the core issue facing most divorcees - meaning they often take a settlement with immediate benefits rather than consider the long-term plan.
Some 689,308 divorces occurred across 45 US states in 2021, according to the latest available data, with couples spending on average $7,000 to dissolve a union.
And the consequences can be disastrous for women. A 2018 study by online marketplace Worthy found that 44 percent of females in varying stages of the divorce process were in debt they were in the process of paying off.
Financial planner Marissa Reale specializes in helping women get the best deal out of a divorce
Separate figures from the United States Government Accountability Office's special report to the Senate found that women's household incomes fall by 41 percent on average following a marital separation.
'Women often want to take the family home in a divorce because of the comfort aspect,' Reale told DailyMail.com.
'But the problem is that the home requires more upkeep and mortgages. I always recommend only taking the home if the maintenance takes up less than 30 percent of your income.'
Often, Reale adds, divorcees overlook the value of asking to split their ex's 401(K) because they are too focused on their immediate security.
This is particularly important for couples who have children because one partner - usually, the wife - is forced to give up work while their infants are young. As a result, they will stop paying into a 401(K).
She also advised what to look out for if you suspect your partner may be hiding financial assets.
She revealed the tax return is the 'number one place to start', and where to look to uncover what assets you own and where they are.
'The first place you want to start is the schedule A itemized deductions,' she said, 'to help you identify unlisted assets or income that you might not know about.'
'For example, on here you have to report mortgage interest so you might see a rental property you didn't know about.'
She explained how this is where the taxpayer has to report gambling losses or winnings. 'If your spouse is gambling, you can also see it here too.'
Reale, who has over 15,000 followers on the platform and has advised over 300 clients about how to get through a divorce, revealed where to look on a tax return to find hidden assets
The next place she advises to look is the schedule B.
'On this form you're going to see any interest or dividends. If there's dividends, that means there's investment accounts,' she explained.
Schedule C is important, she added, because this is where you have to report depreciation.
Schedule C shows profit or loss from a business, and depreciation should normally be added back into the income. Schedule C will show you if there are additional assets in a business you might not be aware of.
'Last, the capital gains and losses will show when you sell a stock, a bond, or anything that creates an investment loss or an investment gain.'
