May 18, 2000 BusinessWeek Online

"How about a story on what women really can lose in divorce -- a lifetime claim on a man's wages?"

This recent e-mail from a reader made me ponder how women facing divorce could better prepare themselves financially. Indeed, the subject needs addressing, since women generally suffer financially from divorce. It's true that women often end up with the biggest asset -- the house. But the costs of maintaining a house and raising kids can be a huge cash drain, and often, women don't negotiate to get a chunk of any big pay raises their ex-spouses may receive after the divorce. According to Long Island University's National Center for Women & Retirement Research, the average woman sees a 45% drop in her standard of living after divorce, while the average man improves his standard of living by 15%.

With sobering statistics like these, it's not surprising that a niche of financial planning has sprung up to deal with divorce-related issues. Divorce planning, which focuses on financial issues such as taxes, pensions, child support, and alimony, uses special software to help you project the future impact of a proposed divorce settlement. This vital information can help you negotiate fair settlements in the valuation and division of property and financial assets.

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For the do-it-yourselfers, there's a new comprehensive suite of financial divorce-planning software that can be downloaded from www.FamilyLawSoftware.com. "We wanted to create software to help people make smarter decisions at this stressful but critical moment of their lives," says Daniel Caine, president of FamilyLawSoftware.com Inc. Caine and his partner, Wendell Smith, are no strangers to self-help software. They created Kiplinger's TaxCut, the No. 2-selling income tax software, in 1986 and sold it to H&R Block in 1993 for a hefty sum.

Recently, I did a trial run of Family Law Software's Deluxe Edition Bundle, the most comprehensive of the seven software packages you can purchase from the site. I was impressed. The opening page gives you a warm and supportive welcome with simple, easy-to-follow instructions on how to use the program. The easy-to-navigate file tabs across the top of your screen (Life, Law, Calculators, Support, Advisor, Pensions, and Forms), and the highlighted, underlined phrases to click for additional information make for an extremely user-friendly experience.

BATTLE TACTICS. As for the content, I think any software designer would be hard-pressed to top this program. Under each tab, the homepage describes what you can expect from the section. For example, under the Life tab, the goals include helping "decide whether or not to divorce," and helping "understand what your children are feeling and thus parent them effectively." I tapped into the "Help -- I'm Facing Divorce!" section and found a host of answers to frequently asked questions such as "What is the legal process?" "Should I stay in our home?" "How should I find a good lawyer or mediator?" and "What can I do to come out better financially?" I clicked on the last one and found gender-specific advice.

Once I was in the area of Financial Strategies aimed at women, I found yet another comprehensive list of suggestions. They included advice on getting copies of all financial records (and specifics of what's important and what's not), making a list of all your assets (and what those might be), and methods for finding hidden financial assets. One such method is keeping close tabs on all mail that comes to the house, with an eye for unfamiliar bank or brokerage statements.

For the men, the list includes deferring a bonus, deferring a raise, and hiding financial records. But as in the women's section, the authors emphasize that they don't necessarily agree with all of the advice. They include it to give a two-sided picture of the divorce process. So you get both sides of the battle -- but the presentation presumes the woman is always the victim.

SHIFTING SCENARIOS. Other areas under the Life tab include Divorce Negotiations, For the Children, and Remarriage and Blended Families. Under Divorce Negotiations, you'll find sections on custody, alimony, child support, and property division. For each topic, the authors offer a few general tips. For example, for negotiating property divisions, they suggest that individuals agree on valuations, take easy-to-sell assets, pay attention to tax effects, allocate debts, and pay off credit cards. But all of the general tips are linked to in-depth discussions.

The software's Calculators, Advisor, and Pension tabs allow people to play out different "what if" scenarios to make the best-informed decisions possible. For example, with the Calculators, you can see the bottom-line income, taxes, and aftertax net for each spouse, the aftertax impact of a given level of alimony or child support, and the effect of one spouse or the other claiming the children as exemptions. Those are just three of 10 calculations you can do. The Pension Calculator helps you with the all-important issue of valuing defined-benefit pensions, a difficult but necessary task. And the Financial Advisor Calculator helps you plan your finances through a series of easy to understand graphs and charts. It can help you plan how to live on the income you will get, reach an equitable property division, and save money on taxes.

The Law tab addresses the law in a number of states and will answer property, alimony, and custody questions. The Support tab helps you analyze the child-support guidelines in a number of states. And the Forms tab allows you to download the necessary state forms you need to file when going through a divorce.

OTHER RESOURCES. That's just the tip of the iceberg. If you're going through a divorce and have the wherewithal to punch some numbers in your computer, this program is worth the time, effort, and cost. You can choose to purchase unbundled versions of the software components as well. You can get the Divorce Calculators, Child Support Guideline Calculators, Family Law Software Financial Advisor, Pension Evaluator, and the Family Law Software Basic Bundle (which includes everything but Pension Evaluator, $149), as well as the Deluxe Bundle (which includes everything for $199). While the cost per program is reasonable, I think the Deluxe Bundle is the best deal.

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Remember that any ground you cover on your own will lower the fees you pay to your divorce attorney, mediator, or certified divorce planner. Divorce is potentially the biggest financial transaction of any woman's life. Be prepared.

Gutner is Women & Investing columnist for Business Week. She offers advice twice a month for BW Online

EDITED BY BETH BELTON