Going through a divorce during the holidays can be emotionally wrenching, which is why many people don’t do it — they put it off until January.
“People don’t want to upset the apple cart over the holidays, and they want a peaceful Christmas, Hanukkah, or New Year’s. And then, because they don’t want to spend another . . . year with that spouse of theirs, as soon as the holidays are over they pull the plug and file,” says Alton Abramowitz, president of the American Academy of Matrimonial Lawyers.
While there are no hard numbers on how many divorces are filed in January, Abramowitz says it’s undoubtedly a popular time to act, rivaled only by September, when marriages break up after the summer holidays. Yet waiting for the holidays to pass doesn’t all come down to simply wanting a harmonious holiday season. There are sound financial reasons to wait until January.
1. Waiting for the bonus. A husband or wife who waits until January is likely to be entitled to any year-end windfall that might come from a spouse’s job. “In New York, at least, once you file for divorce and you set the cut-off date, anything you obtain afterward is separate property,” says Steven Goldfeder, a matrimonial attorney in New York City.
2. Cool your emotions. The holidays are a time when emotions run high. “If your spouse always has it in her mind that Christmas was ruined, she or he may not be so eager to settle with you,” says Goldfeder. “Your divorce might drag out.”
3. Avoid disastrous shopping. December is the shopping season, and that can spell disaster if an angry spouse is set loose with a credit card. “The spouse served with divorce papers may feel that they deserve some kind of emotional gift because of this horrible thing their spouse did to them,” says Kevin Worthley, a certified divorce financial analyst in Warwick, R.I.
An angry spouse may also be more inclined to want to drain the bank accounts and run up the credit cards.
4. Think about April. At year-end, taxes come to mind. “Obviously, the better records you have, the better position you’re going to be in,” says Andrew Katzenstein, a Los Angeles lawyer, referring to paperwork that you might want to start collecting now.
Katzenstein says that in the past there haven’t been many tax advantages to filing for a divorce in January rather than December. Filling for divorce is just a beginning step, after all. Many couples end up filing their taxes jointly until the divorce is completed.
But tax brackets may go up in 2013, depending on whether the US budget dispute is resolved. So going forward, the calculus may be different. “The person who pays alimony will get more bang for their deduction buck, and the person receiving the payments will pay more taxes,” he says.
5. More time to plan. Whatever side you end up on — paying alimony or receiving it — you need to start preparing. “You should start collecting all of your end-of-the-year statements,” says Worthley. “You really need to know everything — your household budget, your assets, what’s in your checking account, how much you’re paying for the mortgage, all of your debts, and your credit card balances. It’s important to get all of that.”
Your financial records will be needed to determine how much spousal support will be paid out, and how the finances will be divided. “The more information you get, the less complicated it’ll be when you’re negotiating and working things out with a financial mediator, attorney, or judge,” says Deborah Moskovitch, a divorce coach in Toronto.
The turn of the new year can also be a good time to try to salt away some extra money to pay for an attorney, says Worthley.