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10 ways to avoid divorce disaster

Nearly half of all marriages end in divorce. Yet all too often couples hurriedly go their separate ways without crunching the numbers to see how a breakup will affect them five, 10 or even 20 years down the road.

A newly inked divorce decree may help ease the emotional strain of a failed marriage. But a settlement that doesn't make good financial sense could mean you'll have to make some undesirable lifestyle adjustments down the road.

Consider these 10 ways to lessen the financial impact when it's time to call it quits.

Avoid divorce devastation
  1. Settle out of court.
  2. Keep emotions out of it.
  3. Bone up on financial matters.
  4. Deal with debt strategically.
  5. Check financial statements.
  6. Alimony vs. child support.
  7. Revise lifestyle budget.
  8. Don't forget retirement.
  9. Hire a good financial team.
  10. Protect property interests.

1. Agree to settle most issues out of court

In hotly contested divorces where anger and other emotions run rampant, legal fees can quickly eat into assets that could have been used for other things.

A divorce can cost from a thousand dollars (for an uncontested divorce) to hundreds of thousands or more, according to divorce360.com, an online resource for divorce information.

Spousal support, child support and division of property are the top three issues in the majority of divorce settlements, but couples who are able to communicate can arrive at an agreement without an attorney, says Ed Sherman, author of "Make any Divorce Better!"

It's usually best to settle as many issues out of court as possible, he says. Oftentimes, this can be done with the help of a mediator or arbitrator.

Find one with a background as a judge or an experienced family law attorney who understands the laws in your state, Sherman advises.

You still generally need a court to approve any settlement, but at least you'll spend less time and money on legal fees.

Sherman cautions that mediation and arbitration do have some shortcomings, namely when you need emergency monetary support or visitation rights.

In those cases, you may need to seek immediate court assistance.

2. Avoid letting emotions cloud your decisions

For many couples, divorce is an extremely emotional time that can lead to bad financial decisions, especially when it comes to divvying up property.

"The financial decisions we make in divorce that are emotionally based are absolutely the worst decisions that we'll ever make," says Violet P. Woodhouse, author of "Divorce & Money: How to Make the Best Financial Decisions During Divorce."

Woodhouse, an attorney and Certified Financial Planner based in Newport Beach, Calif., says people make bad decisions during a financial crisis because they tend to hang onto things that are familiar, such as a home.

"Two years from now those emotions are not going to be there," she says.

Allow yourself a cooling off period before making financial decisions.

3. Learn how to manage household finances

In many marriages, one partner takes charge of the family finances because it's convenient, but that can mean the other partner is left in the dark about the overall financial picture.

"They need to gather documentation and be fully aware of their financial affairs," says Amy C. Boohaker, an attorney and Certified Financial Planner based in Sarasota, Fla.

"That means in-depth knowledge of not just what your assets are but what your liabilities are."

Bone up on financial literacy concepts. Bankrate's extensive archive of useful articles is free and easy to understand.

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