(MONEY Magazine) – Jane Fox, 41, faced an ocean of financial troubles when she and her husband agreed to part five years ago. She and her two daughters, Anna, then four, and Katherine, 1, resettled in a small, 3 1/2-room Newark, Del. apartment. She had resources: $750 a month in child support, $6,000 a year from her job as a teaching assistant (while she went back to school) and a five-figure settlement from the sale of a small, 30-acre farm she and her husband had owned near Dover. That wasn't enough to satisfy her landlord, however. ''There I was, a grown woman who had co-owned property in the state, being told I couldn't get an apartment on my own merits. I had to go to my father and ask him to cosign the lease. It was insulting.'' Fortunately, after three years of what Fox calls ''a dingy, gray little existence'' driving a 1969 Chevy and clipping grocery coupons, she earned a master's degree in computer science from the University of Delaware and now holds down a high-paying job working on artificial intelligence with Bell Communications Research in Red Bank, N.J. Such a turnaround can be difficult for a newly divorced person. The end of a marriage usually means high costs and financial complications for both partners. Legal fees and the expense of maintaining separate households will almost always lower the living standard of decoupled couples. And while no- fault divorce laws in some states have eliminated the need to prove that one partner has misbehaved, questions of property and support have become trickier than ever. The cost of your divorce will depend upon the kind of lawyer you retain and how much time he has to put into your case. The meters of most lawyers tick at $150 to $250 an hour. At a nationwide legal clinic such as Jacoby & Meyers, a simple uncontested divorce will cost about $500; a divorce with complex property arrangements can run to $3,000 or more for each spouse. You may be able to avoid lawyers entirely by using one of the do-it-yourself divorce kits found at many bookstores. They usually provide sample settlement agreements and tell you how to file petitions and other documents. But according to the forthcoming Divorcing (St. Martin's, $22.95), whose co- authors are San Francisco attorney Melvin Belli and Mel Krantzler, such kits should be used only by couples who have been married less than five years, have no children and have less than $50,000 in assets. If you don't meet the do-it-yourself criteria, you will probably need the help of a lawyer to arrange the division of property, custody and support set forth in the settlement agreement. This agreement must be reviewed by the court, which will generally approve it if it conforms to state law and produces a fair result. (For a review of the idiosyncrasies of state laws, see the table that begins at left.) A competent attorney not only should know what you can expect to get in your state, but -- sometimes aided by an accountant -- may also be able to help you and your spouse structure a settlement that would save money on taxes. (For a guide to divorce under the new federal tax law, see page 92.) Still, you and your soon-to-be ex can limit the amount of legal talent you pay for by avoiding contentiousness. Clients must pay for time their lawyers spend haggling on their behalf, and if no agreement is reached, the couple will have to wage an expensive court battle. Thus you and your spouse should attempt to settle as many issues as possible on your own before bringing the legal team into the fray. You can cut legal bills further by trying divorce mediation, a relatively new, nonadversarial procedure. In mediation, a neutral party helps the husband and wife work out an agreement that is later taken to their respective attorneys, who review it and translate it into legalese. Trained mediators charge between $50 and $150 an hour for six to eight one- or two-hour sessions. You should be able to find a qualified mediator by getting in touch with the American Arbitration Association, which has offices in 33 cities. A referral costs $125. In California and in some other places, judges will refer you to court mediators to help resolve custody and visitation disputes. There is usually no charge for mediation in those instances. Where you live will have considerable influence on the shape of your divorce. In some states, each spouse's entitlement is spelled out in statute, and agreements should be structured accordingly. In other states, legal precedent is your only guide to drawing up an agreement that will pass muster with the court. Judges have a great deal of latitude, however, in interpreting the law, especially in states where there are few governing statutes. In such states it is particularly important for you to arrive at a settlement with your spouse; without one, a judge may impose a compromise whose terms you object to completely. Sometimes judges will rubber stamp almost any terms a couple can agree on. For example, in California and eight other so-called community property states, assets are supposed to be divided fifty-fifty. John Storck, 37, a Costa Mesa, Calif. investment counselor, recently parted from his second wife Sandra, to whom he had been married for only 18 months. Storck contributed almost all the down payment and made most of the mortgage payments on the house the couple bought for $230,000 at the beginning of their marriage. But by the time the pair had split, the house was worth $240,000. Since John wanted to keep the house, he bought Sandra out by giving her the $10,000 increase in value. Only one state (Mississippi) sorts out property according to title -- that is, whoever has his or her name on the asset generally gets to keep it. Most states, however, have adopted the so-called equitable-distribution formula to split assets. Such states require a fair -- though not necessarily equal -- division of marital property. Fairness is determined by a number of factors, including the length of the marriage, the financial contribution each partner has made, the age of the two parties and their ability to earn money on their own. Most states exclude from division any property acquired before the marriage and bequests and gifts made specifically to one of the partners. Unfortunately, laws requiring equitable distribution have been anything but fair for full-time homemakers who cannot prove that they have contributed, say, 50% of the down payment and the mortgage payments on the house. To correct that imbalance, many states have begun giving weight in dividing property to so-called nonmonetary homemaker contributions -- in other words, the labor of running a household and raising children. In some states, women and their lawyers also have been able to claim so-called career assets, which may include a cut of a spouse's business, retirement plan or professional degree. Gayle Garnett, 34, a Staunton, Va. physical therapist, decided not to ask for a portion of her husband's pension, even though state law entitled her to do so, partly because she wanted custody of their six-year-old daughter Lindsay without a fight. Danny LaClair, 33, her ex-husband, who works as a consumer service representative at a utility company, had no thought of challenging custody. He asserts, however, that had Garnett gone after his pension, he might have asked her to return the money he paid toward her college degree. Rather than argue over such claims, they decided to sell their house and divide the proceeds evenly. A settlement may also have to make a provision for alimony for the wife (or, in rare cases, the husband) and child support. Generally, both parents are expected to share in paying child support in accordance with their ability and means. Each state, though, has its own complex formula for determining who pays what. The settlement agreement should also determine which parent pays for camp, private schooling, travel between the two parents and other extras. As a rule, child support stops when a child reaches the age of 18 (in some states 21). But if both parents are college graduates, a court may require the wealthier parent to underwrite the expense of the kids' higher education. In recent years, courts have become rather stingy in granting alimony. Once upon a time, ex-wives could look forward to years of steady payments until they remarried or died -- and in some states and under certain circumstances, they still can. But these days, alimony seldom lasts longer than five years, and wives who are young, healthy and weren't married five to 10 years usually don't get alimony at all. Some states allow so-called rehabilitative alimony, however, to spouses who don't meet the criteria for ordinary alimony. Rehabilitative alimony is paid until the nonworking spouse can support herself -- though not necessarily in the style to which she was accustomed. The court may order it paid only until the nonworking spouse gets specific training or else finds a job. Any wife who does get traditional-style alimony should try to have her lawyer include an income escalator in the settlement agreement, according to Gail Koff, a founding partner of Jacoby & Meyers. That would entitle the wife to a share in her former husband's future raises. The settlement agreement should also require the person paying alimony to take out life and disability insurance so that income will continue no matter what. An agreement can also require one partner to provide health and life insurance to cover the former spouse and kids. Under federal law, health and life coverage provided by your spouse's employer may be continued at group rates for up to 36 months after a divorce, regardless of whether you or your spouse pays for it. But the law doesn't apply if you are covered by another group plan, no matter how inadequate it might be. Sondra Schwartz of Atlanta, who amicably parted from her husband of five years in 1987, lost the health coverage provided by her husband's employer. The medical insurance she gets from her job as an inspector for a chain of gas stations isn't as comprehensive, and because she had breast cancer a few years ago, she expects to pay a lot for additional coverage. After a divorce, both partners will have to rebuild their shattered finances as well as their lives. The task is difficult for those who let their spouses handle all family money matters during marriage. One book that might help the newly single is The Dollars and Sense of Divorce (MasterMedia, $10.95) by Judith Briles. Divorced people should identify their career and savings goals. Once those are clear, a budget should fall into place. Those who are starting over should avoid spending all the money they received in the settlement on living expenses. They ought to reserve some for a future objective -- buying a house, educating the kids or going back to school themselves. That can be tricky, but some have triumphed. Despite her chronically cash- short existence, Jane Fox, the New Jersey computer scientist, managed to hang on to the cash she received in her 1983 settlement, stashing it in Treasury securities. Two years ago, when she and her daughters finally moved out of that tiny Delaware apartment, Fox used the money as a down payment for a three-bedroom house in Monmouth County.

BOX: LEGAL BRIEFS: DIVORCE LAW HIGHLIGHTS

What follows is a look at the idiosyncrasies of divorce statutes and case law in the 50 states. Initials denote whether a state goes by equitable distribution (ED), community property (CP) or title (T) in dividing a couple's marital assets.

ALABAMA (ED) Property acquired by one partner before marriage regularly used by both partners during marriage may be divided. Marital misconduct may bar alimony. A spouse may be forced to pay for a child's private schooling.

ALASKA (ED) The court may award property acquired before marriage by one partner to the other. A spouse's nonmonetary contribution to a family business may be weighed in dividing property.

ARIZONA (CP) A spouse may be compensated for financing a mate's professional education. Alimony may fluctuate with the payer's income.

ARKANSAS (ED) A homemaker's nonmonetary contribution may be considered when dividing property. Marital misconduct may affect the settlement. Alimony may not automatically be cut off upon remarriage.

CALIFORNIA (CP) A spouse can receive property in compensation for financing a partner's professional degree. Cohabitation ends or modifies alimony.

COLORADO (ED) Property division is decided first, and that determines whether alimony is granted. An increase in the value of separate assets may be considered marital property subject to division. Rehabilitative alimony may be awarded.

CONNECTICUT (ED) Marital misconduct is considered in the division of property. A parent cannot be required later to contribute to the college education of an adult child unless the obligation is spelled out in the initial divorce decree.

DELAWARE (ED) A gift or inheritance received by one partner during marriage may be considered joint property. A homemaker's contribution may be considered in property division. Alimony is limited to two years if a couple were married less than 20 years.

FLORIDA (ED) Courts have wide discretion over distribution of property. Homemaker contributions and marital misconduct are considered in property division. Rehabilitative alimony is generally awarded for marriages of short duration.

GEORGIA (ED) Only dependent spouses can collect alimony. Marital misconduct can bar alimony.

HAWAII (ED) The division of joint and separate property such as retirement benefits, gifts and bequests is left up to the court.

IDAHO (CP) Marital misconduct may reduce or eliminate the guilty party's share of the community property. Otherwise, division should be roughly equal.

ILLINOIS (ED) Courts usually prefer to settle spousal claims through property division rather than alimony. Homemaker contributions may be considered in division of property.

INDIANA (ED) The court may award property for financial contribution toward a spouse's higher education. Rehabilitative alimony is usually awarded for only three years.

IOWA (ED) Homemaker contributions are considered in division of property. A court may order either spouse to set aside property for a child. Child support may be tied to the consumer price index. A parent may be required to pay college expenses until the child is 22.

KANSAS (ED) Property acquired by either party before or during marriage, including gifts and bequests, is subject to division. Spousal support may be awarded initially for no longer than 121 months, although extensions of up to 121 months may be granted.

KENTUCKY (ED) A professional degree is not marital property. Unless the court specifically reserves the power to modify alimony, it cannot be changed at a later date.

LOUISIANA (CP) Marital misconduct may bar alimony. A partner without fault and without sufficient means for support may be granted alimony, but only up to one-third of the ex-spouse's income.

MAINE (ED) Court has wide discretion in setting alimony awards. Homemaker contributions can be considered in division of property.

MARYLAND (ED) Homemaker contributions may be considered in property division. Cohabitation ends or modifies alimony. Recipients may have to share military pensions or other retirement benefits with the ex-spouse.

MASSACHUSETTS (ED) Division of property is left to the court and may include assets acquired before marriage. A court may order either parent to educate his or her child until 21 years of age.

MICHIGAN (ED) Courts may divide property acquired before marriage, including gifts and bequests. Marital misconduct is a factor in determining alimony. Child support may fluctuate with the payer's income.

MINNESOTA (ED) Homemaker sacrifices such as forgone job earnings and experience may affect settlements. A spouse may be compensated for financing a professional education. Courts may grant rehabilitative alimony.

MISSISSIPPI (T) Legal title to property does not change after divorce; thus one spouse cannot force the sale of an asset such as the family home that is owned in joint tenancy.

MISSOURI (ED) Homemaker contributions in a marriage of long duration may be considered equal to those of a breadwinner. Both partners may have a claim on income produced by separate property.

MONTANA (ED) All property, including inheritance, gifts and assets acquired before marriage, are subject to division. Homemaker contributions may be considered in property division.

NEBRASKA (ED) A spouse may be compensated with property for contributing to the other's professional degree. Retirement benefits may be considered marital assets.

NEVADA (CP) The court has wide discretion over alimony awards. An alimony award may take into account nonvested retirement benefits.

NEW HAMPSHIRE (ED) Marital misconduct may be considered in awarding alimony and dividing joint and separate property. Rehabilitative alimony is usually granted in cases where there are no children or where children have reached age 18. The court can order a parent to finance a child's college education.

% NEW JERSEY (ED) Division of property and spousal support is left up to the court. A spouse may be compensated for financing professional education with so-called reimbursement alimony.

NEW MEXICO (CP) Unvested retirement benefits may be divided. Alimony awards are left to the discretion of the court, but the previous standard of living of the dependent spouse is an important factor.

NEW YORK (ED) The supporting parent's duty to provide a college education for children may extend only to state schools or universities. A spouse may be compensated with alimony or property for financing a professional degree.

NORTH CAROLINA (ED) A spouse may be compensated for financing a professional degree with a property award. If spouses have sexual intercourse with each other after execution of a separation agreement, they may void the contract. Alimony may not be payable to an adulterer.

NORTH DAKOTA (ED) The court may consider marital misconduct when determining alimony awards and property division. Property may be distributed regardless of its ownership. Alimony is left up to the court.

OHIO (ED) Courts have wide discretion in dividing property acquired during marriage. A spouse may be compensated with property and alimony for financing a professional education. Cohabitation usually ends or modifies alimony.

OKLAHOMA (ED) Property held by either spouse prior to the marriage is not subject to division. Spouse may be entitled to some share of an ex-mate's earnings in exchange for financing a professional degree.

OREGON (ED) A dependent spouse's need to improve earning capacity is considered in determining alimony. Alimony may be terminated after 10 years if the recipient makes no effort to become self-supporting. Child support may stop if a minor marries, supports himself or leaves school.

PENNSYLVANIA (ED) Homemaker contributions are taken into account in alimony awards and property division. Marital misconduct is considered in alimony awards.

RHODE ISLAND (ED) Marital misconduct is considered by the court when awarding alimony or dividing property. Rehabilitative alimony is available. Adultery may bar alimony.

SOUTH CAROLINA (ED) Courts give weight to title when dividing property. Marital misconduct may bar alimony.

SOUTH DAKOTA (ED) Property acquired before marriage may be subject to division. Rehabilitative alimony is awarded.

TENNESSEE (ED) A settlement may compensate a spouse for financing a professional degree or for a homemaker contribution. Courts prefer to award only rehabilitative alimony.

TEXAS (CP) Alimony does not exist. Community property may be determined by a jury, which may favor spouses who are victims of marital misbehavior.

UTAH (ED) Retirement benefits may be divisible marital assets. If the spouse paying alimony can prove an ex-mate cohabits and has sexual intercourse with a person of the opposite sex, alimony automatically terminates.

VERMONT (ED) A spouse may be compensated with property for financing a professional degree. Homemaker contributions may be considered in division of property. Courts may award rehabilitative alimony.

VIRGINIA (ED) Vested and nonvested pensions and profit sharing may be considered divisible joint assets. Adulterous spouses may receive permanent alimony. Starting next month, child support will have to be paid until minor is 19 instead of 18.

WASHINGTON (CP) Retirement benefits may be subject to division. Homemaker contributions are weighed in making alimony awards.

WEST VIRGINIA (ED) The court may consider the value of the labor performed in a family business when dividing property. An adulterous spouse may not receive alimony.

WISCONSIN (CP) A spouse's separate inheritances or gifts may be awarded to the other to prevent hardship. Homemaker contributions are weighed in dividing property. A spouse may be compensated with property and alimony for financing a professional degree. Cohabitation with a member of the opposite sex may lower alimony payments.

WYOMING (ED) Property awards are favored over alimony. The court may order part of child support payable to a court appointed trustee who will invest the money and apply income toward support of the child.

BOX: Bottom Line Splitting up the tax bill

To carve up family assets and income fairly, you have to know their true worth -- after taxes are taken into account. In addition, familiarity with the tax aspects of divorce will help you to keep as much family money as possible from the Internal Revenue Service and therefore leave you more to divide. Twice in the past three years, Congress has altered the tax rules for divorce. It pays to keep up with such changes, even if you are already divorced. In one case at least, you can elect to apply a new rule retroactively. Here's how it all sorts out: Alimony. It is deductible for the person who pays and taxable to the recipient. New tax rules, on the other hand, make it easier to reclassify a property settlement as alimony. It is usually in a divorcing couple's interest to do that, since a property settlement generates no tax deduction for anyone. Starting in 1984, to claim $10,000 or more in alimony in a given year, you had to be obligated under your settlement to pay that amount every year for six years. Under the 1986 law, though, payments need continue for only three years and can decline by as much as $15,000 a year. So if Mr. Diddle pays his ex-wife Dee $50,000 the first year, $45,000 the next and $40,000 in year three, he has settled $135,000 on his wife and won big deductions. If Dee Diddle's lawyer is smart, she will try to squeeze Mr. Diddle for more to compensate for the fat write-offs he is getting. Those who divorced under the old 1984 rules may elect to be covered by the current law.

Property settlements. Before 1985, transfer of property in a divorce was treated as a sale. Thus if Mr. Diddle gave Dee $100,000 worth of stock in the Doughboy Doughnut Co., which he had purchased for $60,000, he would have had to pay taxes on the $40,000 profit. Now, however, exchanges are treated as gifts, and neither party pays taxes upon divorce. But the taxes will have to be paid eventually, making a highly appreciated asset worth less than the recipient might think. If Dee Diddle dumps Doughboy a year after her divorce, she will have to pay taxes on any profits over the original price. On the other hand, if Dee had pressed for the family home instead of the stock, she could have cut her taxes when she sold by rolling the profits over into a new house within two years, or perhaps by taking advantage of the $125,000 capital-gains exclusion for those over age 55. Child support. This is neither deductible for the person who pays nor taxable to the person who receives it. The IRS will be watching for child support masked as alimony. If it is determined that money called alimony is really intended to support a child, the deduction will be lost. Therefore, alimony should not be lumped with child support in a settlement agreement. Exemptions for the kids used to be taken routinely by the parent in the higher bracket, even if he or she didn't have custody. As long as that partner paid more than 50% of a child's support or the former spouse signed a waiver, he or she could qualify for the exemption. Now, however, the parent in the lower bracket may be the only one who can take the exemptions. Reason: dependents' exemptions will be phased out this year for single taxpayers with incomes of more than $89,560.

BOX: What to Do When a marriage ends

Zsa Zsa Gabor may know the ropes, but for most people, confusion about how to proceed when spouses call it quits can add to the pain of divorce. The following checklist, devised with the help of lawyers, financial planners and family counselors, can ease the transition to single life.

While you and your partner are just thinking about a divorce -- Start putting away savings in an account of your own. This will give you ready cash in the event that your spouse suddenly stops contributing to household bills. -- If you do not already have credit in your own name, get it. Apply for credit cards, and, if necessary, have a friend or relative other than your spouse cosign a small bank loan. -- Make an inventory of all separately and jointly owned assets including investments, cars and furniture. This tally, along with an enumeration of outstanding debts, may be necessary to determine a division of property. Have your bank verify a list of the contents of any joint safe-deposit box.

Once you have decided to get a divorce -- Notify banks and brokerages where you and your spouse have joint accounts of your intent to divorce. Ask that no brokerage transactions be carried out without the written approval of both you and your spouse. -- Close out joint charge accounts, or, if you wish to keep the accounts open, notify the creditors in writing that you will no longer be responsible for your spouse's purchases. -- Try to negotiate an agreement with your spouse on the division of assets, child support and visitation rights. If you want child support or alimony, work out a budget of your monthly and yearly expenses that your lawyer can use to make your case. -- Collect the names of experienced divorce lawyers from friends, the state or county bar association or other attorneys. Interview at least two candidates. By all means, question them about their fees.

After the divorce decree becomes final -- If you haven't already done so, rewrite your will to name an heir other than your spouse. -- Review your health, life and disability insurance coverage. Change the beneficiaries on policies you own unless your settlement requires you to continue to protect your ex. Replace any needed protection you have lost. D.W.E.