How to Cover Your Ass-ets

Even if you’re on your way to divorce and you’re looking at an expensive breakup, there are ways to minimize your financial pain.

By Betsy Schiffman

A prenuptial agreement can save you from exorbitant legal bills from the law firm of That’s-Mine, This-Is-Yours (as coined by Billy Crystal in When Harry Met Sally), but many women lack the foresight to ask for one, or they don’t feel comfortable discussing it.

If you don’t have a prenuptial agreement, it’s not an entirely hopeless situation, says Susan Allan, a divorce coach and certified mediator based in Santa Barbara, Calif. The key, according to Allan, is to encourage your husband to re-enter the workforce at least six months before you ask for a divorce.

“Don’t even think about divorce until your husband has a career and is working again,” Allan says. “I had a client a few years ago who wanted to divorce, and her husband was a drug user. She was going to have to pay him a fortune. I told her the first thing she needed to do was to motivate and inspire her husband to get back to work. Six months later, the guy started working. A year later, he had a career and was earning almost as much as she was. She had acquired a lot of property and homes during the seven years they were married, and at first he said she owed him a quarter of a million dollars, but after about a year he accepted $150,000.”

While it’s also possible to strike a postnuptial agreement after you’ve married, according to one attorney, postnuptial agreements are basically just glorified divorce settlements. They are often struck before the divorce is decided upon and after the wedding dress has been sold on eBay. It could be just as tricky to agree on a postnuptial agreement as it may be to settle a divorce.

“A postnuptial agreement is just another term for a property settlement agreement,” says Wayne Schultz, a financial adviser, attorney and vice president of Your Money Matters Brokerage Services, a financial planning firm in Annandale, N.J. “If people are talking about postnups, it’s usually because things aren’t going well.”

Another trick, Schultz says, is to keep inherited property in your name, which may increase your chances of keeping it at the end of the day.

“In most states, inherited money or property is not subject to equitable distribution unless you put it in your spouse’s name,” Schultz says. “Of course, that’s not going to stop the lawyers from going after it, but it’s something to remember.”

Schultz also says individuals may want to sock away savings in a separate bank account, but he finds few individuals are comfortable with that.

“Divorce attorneys always say you should have a safety account in your own name so you will have something to fall back on. Of course, most people don’t like to talk about that. It’s sort of like saying, ‘Look, we love each other, but if we have to ditch, we’re ready.’ Of course, I’ve talked about this with older couples, and they say, ‘I’d never do such a thing!’ They’re the ones who call me nine months later saying, ‘He locked me out and I’m penniless!'”