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Denise French

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Archives for July 2019

Financial Co-Parenting – There’s an App for That!

July 29, 2019 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

Welcome back to our two-part blog reviewing Creative Financial Co-Parenting strategies.  If you haven’t yet read Part 1 about financial co-parenting, be sure to check it out!  The combination of co-parenting and finances can be a struggle for many, but it doesn’t have to be.

There are a wide variety of apps available which help support co-parenting communication.  In addition, many of these apps offer expense management tools for co-parents as well!

Any and all co-parents are good candidates for using an app.  For those who have a strenuous relationship, use of an app can be particularly helpful.  I have personally used Our Family Wizard for the last 10 years.  I have found it to be extremely helpful!  Here are the details on Our Family Wizard as well as a few other, newer apps on the market today.

Our Family Wizard

Our Family Wizard* is one of the original apps for co-parenting, and often the go-to for court-ordered use of a co-parenting communication tool.  Their “Expense Log” feature is top-notch, tracking expenses, capturing receipts, and it creates a log with the math all done for you.  They have an integrated electronic payment feature, OFWpayTM, though transaction fees apply.  I personally use the expense tracking tool but I do not pay through the app.  Our Family Wizard is $99 per year, per parent.

One of my favorite features on this app is the private journal function.  If your co-parent is behaving badly, brings the kids home really late, doesn’t show up, puts your children in the middle, etc.  you have a journal tool.  I used to journal different examples of what I thought fit into the categories of “parent alienation” or “lack of co-parenting” or “disparaging remarks” and then write what happened which was date stamped.  If I ever went back to court I could just send all the private journals to my lawyer over the years each with a brief summary of what happened which I wrote at the time.

I also love the calendar feature.  I can easily log dentist appointments, doctor appointments, etc.  The only thing I don’t like with their calendar feature is the inability to sync the OFW calendar to my personal google calendar.  If may be an option, but I have not figured it out yet.

There are other features including a communication feature where all communication can go through the app, names of doctors, baby-sitters, or insurance information can also be shared here.  It is a very helpful, robust tool.  I’m so glad we have it written into our decree and mandated for use of expense tracking and the calendar.  I cannot imagine all the years of bills and messages going through email and excel spreadsheets.  If you are looking for a great resource to help with co-parenting and finances, this is a great one to check out.

AppClose®

One of our favorite co-parenting apps is AppClose, a FREE co-parenting app, currently without subscription fees or monthly charges.  It offers a plethora of features helpful for co-parents.  For expense management, I love the “Requests” feature, which allows parents to send, receive and approve child-related reimbursement requests.  This will also create a record of expenses, which can be exported or printed for free.  Wouldn’t that be handy at tax time?  AppClose also has an integrated ipayouTM feature, which can facilitate money transfers between parents, though transfer fees do apply to this feature.

Coparently

Another tool to consider is Coparently.  This expenses tool supports logging of all shared expenses and payments that have been made.  It will also allocate the percentage of contribution per parent, if the payment contributions are something other than 50/50.  The app is $99 per year, per parent, or $9.99 per month, per parent, making it a great resource for anyone hoping to streamline the co-parenting and finances relationship.

Make It Work

There are many more co-parenting apps on the market, though not all have the financial tools included.  Many of our clients have shared positive feedback about using an app – it’s wonderful that technology can lend a hand in co-parenting!

Do keep in mind that use of any of these apps still require basic agreements between parents as to what expenses will be shared outside of any child support paid.  The apps don’t create or enforce the agreements, the simply help facilitate them.

Stay tuned for more blogs on co-parenting and finances before, during and after divorce.  Give us a call at 281-210-0057 to learn how we can help divorcing parents.

Filed Under: Family & Children Tagged With: apps, co-parenting, finances

Financial Co-Parenting

July 14, 2019 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

Parenting children after divorce can be complicated, at best.  There are many things to consider, such as parenting time schedules, transitions between homes, disciplinary responsibility, extra-curricular activities, emergency preparedness, one or both parents re-coupling, and more.

One of the more challenging aspects of co-parenting can be managing finances as it pertains to child-related expenses.  While child support is addressed in all divorce cases involving minor children, there is sometimes confusion and ambiguity as to what child support covers, how to meet the children’s needs and how to maintain their lifestyle despite the divorce.  It’s important to iron out the details of who will pay for what during the negotiations as child support may not be enough.

What is child support for?

Child support is money paid by a noncustodial parent to cover a portion of the child’s expenses.  Texas child support payments are based on the income of the noncustodial parent and the number of children under that parent.  Child support can be used to cover a number of expenses, and the custodial parent has broad discretion in determining how to use child support.

Are you concerned about how this is going to work in your family?  If so, here are a few ideas to help bridge the gap if one spouse makes a lot more than the other, or if both spouses make money and the children have an expensive lifestyle neither parent wants to see end.

joint account

Using a Joint Account

The use of a joint account can be a great solution for financial co-parenting.  If one spouse makes a lot more than the other, this enables the non-monied spouse to have extra income for more children’s needs while the monied spouse has the comfort that his/her funds are going toward the children’s activities and needs alone.  Or, if both parents make equal amounts it assures the parents that each are contributing equally to the kids if they both fund the joint account.  Here’s how it works:

  • A joint account is established with both parents’ names on the account.
  • The parents agree on what expenses can be submitted to the joint account, how much each parent will contribute to the account (or one parent if there is a large discrepancy in income) and at what frequency, and special spending rules (such as purchases are capped and/or purchases for certain items only are allowed).
  • The parents agree on an ending date for the account and then decide what to do with the remaining funds in the account. (Many of our agreements use this through college or at least high school, and state that the child will keep any funds remaining in the account upon graduation.)
  • Both parents establish their own login for the account.
  • Both parents have checks and a debit card to access the funds in the account and agree who will pay for replacement card fees and additional checks (either the joint account pays, or each parent pays for their own).
  • The parents determine whose address will be listed as the account’s primary address.

We recently helped a couple walk through this whom we will call Brad and Joan.  They have 3 children.  Their oldest child is in competitive dance, the middle child is in various sports and the youngest child is in a year-round swim team and participates in summer swim league.  They have a busy schedule and an expensive one.

Brad earns over $300,000 more than Joan each year.  Brad agreed to pay Joan the standard child support in the Texas code for three children with “step-downs” as they graduate high school.  This gives Joan a baseline of income to help pay for the mortgage, the utilities, food and minor expenses for the children while they were still living at home.

Brad also agreed to fund a joint bank account for the children on a monthly basis.  These funds are for specific purposes for each child (and there was an overall cap applied toward each child).  The items in their agreement that are to be paid for via the joint account include:

  • Dance Class/Dance Team/Dance Competition/Dance Costume costs
  • Travel related to dance – hotel, airfare, meals during travel alone (for whichever parent was traveling with the child)
  • Private dance lessons which she was doing prior to the divorce
  • Private sports lessons for their middle child which he was doing prior to the divorce
  • Cost of the sports leagues/uniforms/equipment
  • Private swim lessons for the youngest which she was doing prior to the divorce
  • Swim team costs/swim competition costs/swim equipment/suits
  • Back to school shopping in August for clothing, school supplies and backpacks for all three with a cap of $2,000 on that cost each year.

This enabled Brad to cover costs for his children so they could maintain their lifestyle while decreasing the communication needed between the two parties.  At any time, Brad can view the account, what was spent and how it was spent.  It’s a win-win for all.

Establish Written Guidelines for Large Future Purchases

Brad and Joan also agreed to split the cost of vehicles for each child with Brad paying 75% and Joan paying 25% for a vehicle up to a certain dollar amount within 30 days of each child receiving their driver’s license in the future.  They also agreed that Brad would be the parent responsible for negotiating for the vehicle and the paperwork.  This puts bounds on the agreement to avoid argument but doesn’t tie them down to a specific vehicle today for a future purchase.  Additionally, Brad agreed to pay for auto insurance for the children and they agreed that insurance would start within one week of each child receiving their license and agreed to share the information on the insurance cards within 24 hours of receiving it or changing it.

Pay the Vendor Directly

In other cases, we see the monied spouse paying the vendor directly.  For example, we have helped many who agreed to keep their children in private school and the higher-earning spouse paid the school directly.  Often, we see a mandate to keep the child enrolled in the current private school unless they both agreed, in writing, to move the child.  If they moved the child to a different school, the monied spouse would continue to pay 100% of the tuition costs.  We also, in some cases, include the costs of meals, uniforms and fund-raising mandates from the private schools.  In other cases, both spouses worked, and they agreed to pay the private school 50/50 directly with the same stipulations for change in private school institutions.

We’ve also seen where the monied spouse will pay the dance studio, the little league, the gymnastics teacher, the educational tutor, etc.  directly. This decreases the necessary communication and mandates that the child continues to receive the activity or tutoring.  We usually see caps put on the spending so the monied spouse has security while still mandating a certain number of activities or dollar amounts be used for the child’s needs.

financial co-parenting – making it stick

Making It Stick

All of these things are good and wonderful to put in writing, but what if one spouse changes their mind?  What if a new partner comes into the picture and wants to change the details?  The wording of these agreements in your decree is critical.  Make sure you talk to an experienced family law attorney to help you understand how these agreements need to be worded and then enforced if they are broken.  We can recommend an attorney in your area to help you with this.  This is critical!

It helps greatly to utilize a financial professional as you iron out the budgeting and monetary details, but then have an attorney draft the document into legal wording to assure your agreements are enforceable.

How to keep track of these expenses?  What’s the best way to communicate?  Check out our favorite divorced family communication tools for sharing calendars, tracking expenses and handling reimbursements.

We want to help you be the best co-parents possible at Divorce Strategies Group!  Contact us today to learn more.

Filed Under: Divorce Finance, Family & Children Tagged With: co-parenting, custodial parent, divorce, finances

An Alternative for the Small Business Owner

July 8, 2019 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

[three_fourth_last]Unique challenges that other, regular W2 employees don’t have plague small business owners and divorce. A business owner’s divorce attorney (or their spouse’s divorce attorney) will often ask that a business valuation be completed. Not only is this another time-consuming item on the divorce check-list, but it’s an expense typically ranging between $7,500 – $20,000. The appraisal may take weeks if not months to complete and much information will be requested of the owner. This can be overwhelming to the business owner who is already exhausted due to the time, emotion and costs of the divorce itself.

Small Business Owners and Divorce

There is an alternative to the comprehensive business valuation report which can help the small businessperson save both time and money while providing the attorney with a reliable, third party number to use in mediation. This is the Calculation of Value Report. According to the National Association of Certified Valuation Analysts (NACVA), a Calculation Engagement occurs when the client and member agree to specific valuation approaches, methods, and the extent of selected procedures and results in a Calculated Value.

calculation of value report

What will a Calculation of Value Report include?

The calculation report will perform a deep dive into the financials of the company as any business valuation should. The report will be short, typically 6 – 8 pages and if conducted according to the standards of the NACVA it will include the purpose of the report, description, ownership size, nature, restrictions and agreements of the interest being valued as well as a calculation date and report date. It will include the scope of work, calculation procedures, hypothetical conditions/assumptions and the reason for their inclusion. It will include subsequent events which are considered and denote if reliance on a specialist was required. It will include a statement of the financial interest and whether or not the author is obligated to update the report. Finally, it will be signed by the valuation analyst who is responsible for providing the report.

The calculation report should show normalized financial schedules for the subject company. The owner’s compensation, as well as other balance sheet and income statement non-recurring items, should be reviewed, researched and normalized. The company documents including financials, tax returns, corporate documents, buy-sell agreements and other articles of incorporation should be reviewed. An interview with the owner will still need to be conducted, although they are usually done remotely via a zoom meeting or facetime on a smart-phone. The calculation report will also include any discounts for lack of control if the owner is not the sole owner and discounts possibly for lack of liquidity.

Typically, two of the three approaches will be used whether it is the Asset Approach usually using the Adjusted Net Assets Method, the Income Approach using either the Capitalization of Earnings or the Discounted Cash Flow Method and/or the Market Approach typically using the Guideline Public Company Method showing both the Seller’s Discretionary Earnings Multiple and the Revenue Multiple. The financial schedules showing the numbers will be included in the report as well as a list of the sources of information utilized to derive the calculated value.

calculation of value report

When would the Calculation of Value Report be appropriate?

These reports are often used in mediation. They provide a way to save time and expense as they are produced in a shorter time period and cost less than a full conclusion of value report. We offer these reports for a flat rate between $3,500 – $5,000. A word of caution, these reports may not be accepted by the courts but can be morphed into a full report if court becomes a necessity.

Overall, this is a way to save time and expense while providing a calculated value of the subject company based off its historic, current and expected financials.

Small Business Owners and Divorce Services

Please look around our website and blog pages at www.DivorceStrategiesGroup.com for helpful information regarding small business owners and divorce finance or to schedule a consultation to discuss how we can help you with the financials of your divorce.

Filed Under: Dividing Property, Divorce Finance Tagged With: business valuation, divorce attorney

Helping Children Navigate Divorce

July 1, 2019 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

Divorce isn’t always easy to navigate for the couple who is going through it. It can be messy, stressful, hurtful, and… just not fun for anyone involved. So, imagine how your children might feel. Helping children understand divorce can be tricky, but there are some tips you can use for success.

Leaving your children out of your divorce as much as possible is always the best option. Depending on how old they are, they might be more involved than they should be. They may also pick up on the conflict between you and your former spouse.

Unfortunately, this can create a lot of problems for children. They may start to feel guilty or gravitate toward one parent over another. It can also cause some long-term emotional and psychological problems.

How can you get through a divorce in a healthy way without emotionally harming your children in the process?

Consider some practical suggestions for helping children understand divorce.

CLICK HERE TO CONTINUE READING

Filed Under: Family & Children Tagged With: children, divorce

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