Dear Moneyologist,

My wife of 21 years informed me that she wants to divorce. We jointly own a home with nine years left on the mortgage. Our savings account contains a large sum of readily available cash that we use for emergency funds, college tuition and living expenses for our son -- and as a hedge should one of us lose our job.

She says she wants to use all of the savings to buy her own place and that she would help me continue to pay the mortgage on our current home should I choose to continue to live there (and I do plan to stay put). I will have to fully cover all the household expenses and, since her salary is higher than mine, leaves me barely covering expenses on my own.

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“ I’m scared to death of losing my job and having nothing to fall back on without savings and am three years away from full retirement. ” — B.P. in Maryland

She would cover half of our son’s college expenses (for two more years until he graduates). There is more than enough money in the savings to completely pay off the current mortgage. I’m scared to death of losing my job and having nothing to fall back on without savings and am three years away from full retirement.

What in your opinion would be the better use of the savings? I don’t see that she can take the whole amount since it is in both our names. Should it be split 50/50 or is it better to eliminate the current mortgage and defer her getting her half when the current home sold sometime in the future?

B.P. in Maryland

Dear B.P.,

Forgive the wedding reference, but there are so many ways you can slice this cake. And it sounds like you’ve made up your mind, you just haven’t realized it yet.

The slice of cake marked “savings account” does not go to your wife: No-one gets to plunder all these accounts, period. This is where co-dependency ends and a new life of independence begins. You don’t have to manage your wife’s expectations, you only have to manage your own, and she may or may not agree with you. There may be lots of room for compromise when it comes to paying for tuition for your son, or how long you decide to hang onto the family home, whether you should use the savings account to sell the house now, but if you feel like your savings provide you with peace of mind, especially as you earn less than your wife, stick to that. (Americans should have around six months of emergency savings in the event that something bad happens, yet most do not. Don’t be part of that 63%.)

There’s a lot you can do to prepare for this split. While you await the negotiations, take an inventory of your life insurance policies and retirement accounts (including IRAs and 401(k)s) and think about who you might want as a beneficiary in lieu of your soon-to-be ex-spouse. In addition to the divorce decree when you or your wife decide to file papers, you may need a “Qualified Domestic Relations Order” — a court order that requires workplace retirement benefits or IRAs to be split. You’re not alone. (I say that a lot because (a) it’s true and (b) it’s important to remember. More baby boomers are getting divorced, studies show — one-third of boomers are now single — and will likely be more concerned about retirement given they are closer to retirement age, currently 66.

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When you consult a divorce lawyer, think creatively. Will you be doing any renovations on the home? If so, that should be deducted from any final sale. If you alone are paying the mortgage and your wife does receive some amount of money to put a down payment on her own home, then your wife shouldn’t benefit from the full sale price either. Your wife has very clear ideas about what she wants from this divorce. It may not be what she gets, but you should also know exactly where you draw the line and areas that are open for negotiation. You can only succeed in these negotiations if you know what you want before you enter them, and realize what’s at stake.

I have enlisted a divorce lawyer to give it to you straight. “If she is the one who wants out, you should address your concerns about a strangling mortgage and consider using some if not all of the assets to pay it down,” says Randy Kessler, an Atlanta-based lawyer who wrote the book, “Divorce: Protect Yourself, Your Kids, and Your Future.” He suggests locking in the amount she would receive whether the home increases or decreases in value. “Your wife wants out so you should insist on what makes you feel secure, especially since she makes more money.” What’s more, Maryland is not a community property state, meaning the assets may not be distributed 50/50; obviously consult a lawyer, but if you earn less than your wife, you may be entitled to a higher settlement.

It could also be worse. You had 21 years together. I hope they were happy. Spare a thought for this recent letter writer who only had two days.

Do you have questions about inheritance, tipping, weddings, family feuds, friends or any tricky issues relating to manners and money? Send them to MarketWatch’s Moneyologist and please include the state where you live (no full names will be used).

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