Retaining Your Assets in Divorce

Retaining Your Assets in Divorce

After years of working with those going through divorce, we have found individuals with two factors really thrive during divorce.  Those who have (1) knowledge of the relevant facts and (2) realistic expectations are the most ‘successful’ in their divorce.  Without accurate accounting of your finances, you may find that you cannot afford your life, or you could jeopardize the retirement that you have worked so hard for. Conversely, you may find you have more than enough in assets to maintain your lifestyle, and you are secure financially.    With higher-than-realistic expectations you may spend thousands of dollars (or hundreds of thousands) only to find a fair division is 50/50 (or 53/47 but not the 80% you wanted).  For those going through a “gray divorce” or spouses who have worked at home, the financial ramifications can be even more significant for either mistake.

Hurt feelings and fear often combat rational thought – which we totally understand – we were the same way. Divorce is scary! With that in mind, we have created 7 tips to help those in divorce walk away with your financial future intact after you go your separate ways.

Budget your Post-Divorce Lifestyle.

Living separately can be scarier than living together – even if you were miserable!   To ease the fear, remember knowledge is power.   It is imperative to know your monthly income and expenses.   This is particularly important if one spouse has been paying the bills and managing the household finances alone.

Figure out your immediate needs and go from there. At Divorce Strategies Group we walk couples through their post-divorce budget early in the divorce process.  It is important that clients know realistically what they can spend each month following the divorce. This sets them up for a secure financial future and gives them peace of mind.  It can also help you negotiate from a position of power, not fear.

Manage Costs During the Divorce

A typical litigated Texas divorce ranges between roughly $20,000 to $40,000 or more. That is no small chunk of change to most couples.   We have been witness to divorces costing $60,000, $80,000 and more (reference unrealistic expectations and lack of knowledge above).

One way to mitigate the financial fallout of divorce is to choose early mediation over litigation. Mediation is a process in which a mediator helps divorcing couples reach an amicable settlement. The mediator facilitates communication between the parties to promote settlement and understanding between them. Mediation addresses child custody, child support, visitation, spousal support, and property division. The mediator does not act as a judge, attorney, or financial advisor, but assists the spouses in reaching a voluntary agreement. At Divorce Strategies Group our Mediation Process involves a team of experts that will work with you and your spouse to negotiate a divorce settlement that won’t break the bank.

focus photography of person counting dollar banknotes

The issue many attorneys, rightly so, have with mediation is it is done without guidance of someone who understands the law or someone who understands how finances work relevant to divorce.   These are both valid concerns.  We have seen couples negotiate a “do it yourself” divorce only to find they owe thousands later due to mistakes or someone lost out of hundreds of thousands because the agreements were not able to be legally completed (such a restricted stock plan) or the property documentation (such as a pension plan) was not completely correctly, thus the agreement is not enforceable.

To make sure you do it right, we include a Family Law Mediator Attorney with a Divorce Financial Expert to provide the right guidance to you the first time.  Visit Divorce Strategies Group for more information on our process.

Eradicate Debt

If you have joint debt with your soon-to-be ex-spouse, it is best to pay it off before finalizing the divorce.

Shared debts remain both party’s obligation in the eyes of a lender, even if the divorce settlement says only one spouse is responsible for paying it back. If the responsible spouse fails to make the payments, any defaults will show up on the other spouse’s credit history.

If the debt cannot be paid off pre-divorce and becomes only one spouse’s responsibility, the other should continue to have access to the account’s history to make sure it is being paid as agreed.  Better yet, have an attorney create an enforcement action in which you can take over the property or some other property if you are not able to be removed from the debt and your spouse, who was assigned the debt, fails to pay.  An attorney can help you make payment of the debt in your name contractual or binding in some other format.  Debt in divorce can be tricky It is wise to seek legal and financial guidance if you are dealing with large amount of debt or a significant debt (like a home mortgage).

Kids are Expensive

Kids can cost a lot, especially when you have not budgeted their future needs into the equation. Be sure to consider things like cars, car insurance, private school tuition, day care costs, summer camps, extracurricular activities, and even smaller things like school lunch accounts and back to school shopping. These costs add up over time.

woman wearing academic cap and dress selective focus photography

If you have children close to graduating from high school, it is important to be very clear about what each parent is willing to cover in college costs or any other expenses.  Another discussion to have is who will cover health care costs for your children after they graduate high school.  Who will the insurance fall under, who will pay for it, and how will out-of-pocket costs be covered from the time your child graduates from high school until they are fully on their own as a working adult?  Family courts do not cover this time period, but parents sure do, and contractual agreements can be made between the parties regarding this no man’s land of time for older kids needs.

Divorce during Retirement

Gray divorce is defined as divorcing couples who are 50 and older, and they are on the rise. These couples have their own unique situations and needs for the future. There may be annuities, retirement plans and life insurance policies.  We have had couples retire during the divorce which also brings a multitude of tax issues.

One way to facilitate a smooth transition after divorce is to hire a Certified Divorce Financial Analyst. We work closely with couples during and after divorce to make sure they understand the assets they own, what income can be derived from investments and help them build a firm financial foundation.

Divorce for those over 50 is a critical life situation and likely the biggest financial transaction of your lifetime.  Your divorce could determine your lifestyle for the remainder of your years.  This is not to scare you, it is just important to have counsel if you are in this situation.

Receiving the Assets You Were Awarded

A common assumption people have during a divorce is they automatically own an asset the court has awarded to them.   Just because you were awarded the asset, does not mean you now own it.  There is a process to walk through after the divorce to take ownership and control of the property you were awarded weather that property was a home, a brokerage account, a bank account, or a retirement fund.  Divorce Strategies Group members can walk you through the steps you need to take to claim the assets you were awarded.  This is very important to do as soon as possible so your spouse cannot improperly move or hide funds you were awarded.    It is also important to complete the Qualified Domestic Relations Orders (QDRO’s) while your attorney is involved as these need to be filed with the courts and all parties (you, your ex-spouse and your attorneys as well as the judge) need to sign it.

Plan for Peace of Mind

The goal we have for all our clients at Divorce Strategies Group is financial peace of mind. When working with us, you will know what bills you need to pay every month and how much of your disposable income you can spend. You can spend your money in freedom because you know you have a plan for your budget, taxes, and investing. We can also help you adjust your financial plan if you experience new significant life changes.

Planning and budgeting are not fun concepts, but the fruits of these labors can provide a lot of fun (and security) in your future!!

Schedule a complimentary consultation with Divorce Strategies Group today.  No matter what phase of the process you are in – just starting, in the midst of divorce and have financial questions or wrapping it up and looking ahead toward your future.   We are here to help you thrive after divorce and move on to the next phase with confidence, strength and hope.

THE MEDIATION PROCESS – HOW IT WORKS

THE MEDIATION PROCESS – HOW IT WORKS

Mediation is a structured, interactive process where an impartial third-party helps disputing parties in resolving conflict using specialized communication and negotiation techniques. The mediator is there to aid the parties in reaching their own agreement. The mediated settlement agreement is not a decision by the mediator as to how the divorce should be decided; it is an agreement between the parties as to how the parties’ issues are to be resolved. The mediator’s function is to use the mediator’s legal and financial knowledge as well specialized negotiating skills to facilitate a resolution for the parties.

Usually what happens at mediation is both parties meet with the mediator at the mediator’s office or a special mediation center. Almost all mediators now immediately divide the parties into different rooms. Typically, the mediator will start out with the Petitioner and will spend an hour or more learning about the particulars of the Petitioner’s case. Many times, the mediator will not even try to get an offer of settlement out of the Petitioner during the first meeting. Then the mediator will meet with the Respondent for a similar period of time. This way the mediator becomes completely familiar with the issues that exist between the parties.

With Divorce Strategies Group mediation process, we meet with the parties several times before mediation day to learn about your situation, your wants, and your wishes. We walk through your finances – what you own, what you owe and different options for division. In addition, we meet with each party prior to mediation to discuss the decisions you will need to make with your children in a formal parenting plan during mediation. With Divorce Strategies Group mediation process, we provide two mediators – a divorce financial mediator who understands even the most complex estate issues as well an experienced family law attorney mediator to walk through parenting plan options and oversee the entire legal process. You will have two experienced mediators – each with a different area of expertise, helping you with the decisions you need to make to achieve a resolution to your dispute.

During mediation, the mediator(s) will go back and forth between the parties negotiating a settlement. Skilled mediators can provide particularly helpful suggestions to the parties when an impasse on a particular situation begins to arise. Many times, people go into mediation with the attitude of “my way or the highway.” A good mediator can usually deflect this type of attitude by making suggestions for settlement that neither party thought of before mediation. If an agreement is reached at mediation, then the mediator prepares a Mediated Settlement Agreement which is signed by the parties and becomes binding.

Many people serving as mediators are highly experienced attorneys. In order to be a mediator, an attorney must undergo substantial training in the art of negotiation and the ethics of mediation. Another person who is often a mediator is someone with substantial financial knowledge in the specialized realm of divorce finance as well as specific training in family law mediation. At Divorce Strategies Group, we provide both.

There are usually a few rules that go with mediation. First, everything that occurs at mediation is confidential and cannot be used in court. The mediator(s) can never be brought into court to testify one way or another. Furthermore, the parties are barred by the court from stating in court what occurred at mediation. Secondly, when you are discussing your case with the mediator, the mediator is free to assume that whatever you tell the mediator may be discussed with the other side. However, if you have a certain piece of information that you believe critically shapes your case, and the other side does not have that information, and you do not want them to learn about it, you should be sure and tell the mediator that you do not want the mediator to disclose that information to the other side. In that case, the mediator(s) will keep your information private.

As I pointed our earlier, once you sign a mediated settlement agreement it is irrevocable and binding, and a party is entitled to ask the court to enter a final decree of divorce based upon the mediated settlement agreement. That means at the end of mediation day, your agreements are binding. There are no “take backs”. The negotiations – aka the fight — is over. At this point, we usually help the parties decide which accounts are going to be used by whom, timelines for transitioning of accounts and even a timeline for moving out of the marital home if needed and any other pertinent issues.

Usually, a mediated settlement agreement is a shorthand rendition of the parties’ agreement. Afterwards, an attorney will prepare a Final Decree of Divorce based off the mediated settlement agreement and submit it to the court for entry by the court.

Usually, mediation is an all-day affair. At Divorce Strategies Group, we try to walk into mediation knowing where agreements already exist and where the disputes will arise. We then focus on helping the parties walk through the disputes in order to find a win-win solution or a compromise everyone can live with. That way, we are not in mediation late into the evening when judgement is not always clear, and tensions are higher.

At Divorce Strategies Group, our goal is to help parties achieve a settlement for their family and their finances in a softer, gentler fashion. We strive to help you achieve a resolution within a few short months without catastrophic loss to the estate and nearly a year wasted in litigation. For more information on Divorce Strategies Group mediation process, please visit us at Divorce Strategies Group. We look forward to helping you!

OH, DIVORCE DEBT. HOW CAN I EVER REPAY YOU?

OH, DIVORCE DEBT. HOW CAN I EVER REPAY YOU?

Q: My husband and I have a lot of assets—but we also have a lot of credit card bills. Everyone talks about dividing assets in a divorce settlement, but there’s not much said about debt. How does that work in terms of who pays what?

A: You’re so smart to ask this question! Most people don’t realize that during divorce, dividing debt is just as important as dividing assets. Although most states handle property and debt division differently, you can expect debt under a national contract (like with Visa) to be pretty consistent. (Pssst. See our friendly Texas Family Law Code about debt and divorce for specific details).  

 

Here are a few tips to help you get started….

  • Credit card companies are blind. They don’t care if you’re divorced; they just want to get paid. Broadly put: You are responsible for whatever is in your name. If you have several joint accounts, it’s best to pay those accounts with marital assets and either remove your spouse’s name or remove your name so that there is only one owner going forward. The fees for these transactions are small compared to the headache and hassle of keeping tabs on an account you no longer control (but are on the hook for). 
  • The cleanest option for mortgage debt is to sell the house and split the money. If that’s not a viable option, one spouse can “buy the other out” with a buyout refinance (if you want to keep the home you would, ideally, be able to qualify for a loan on your own).   This will not ever be mandated by your divorce decree (even the great state of Texas cannot make a third party lender accept you).

    If a refinance cashout isn’t on the table, one of you can stay in the house while both of you remain on the mortgage. Instead of a clean break from the debt, your spouse would have a “Deed to Secure Assumption,” which can be drafted by an attorney, to provide a layer of protection for the person who isn’t living in the home. This arrangement isn’t for everyone, but it can be the easiest option in tight markets. Details of this type of deed should be discussed with your legal counsel.  
  • Timing matters, in terms of when the debt was incurred. If debt was incurred before the marriage, then it belongs solely to the spouse that created that debt. If incurred during the marriage, then both spouses are equally responsible.  There may be special situations where debt was incurred as a result of paramour activity or “wasting” of marital assets. If that is the case, then an attorney can help you fight that battle during the pendency of your divorce.   

Now is the best time to get a handle on what you owe to whom. To cover both: Run a credit report on yourself and ask your spouse to do the same. This free report gives a current and comprehensive snapshot of where you are with your debt, as well as your credit score—both will come in handy when it comes to negotiating the terms of your divorce. 

In addition, we recommend calling every credit card company you have an account with to verify who is actually responsible for the account and who is just an authorized user. You want to gather all the information you can today in order to protect yourself in the future. 

And don’t forget—we can help! Contact Divorce Strategies Group for a complimentary consultation to see how we can help you sort through the maze of divorce finance.  

Cryptocurrency in Divorce

Cryptocurrency in Divorce

Coinbase (COIN) went public recently and had the attention of the investment world. Coinbase is a financial technology company that focuses on offering its retail users the ability to buy, sell, and own crypto and digital assets like BitcoinEthereumLitecoinDoge Coin, and other currencies on the block chain. Coinbase reported they have more than 50 million retail users.

The popularity of cryptocurrencies has skyrocketed over the last decade. You can’t watch Bloomberg or CNBC or any other financial news outlet without crypto being discussed. Significant wealth has been created for individuals owning crypto assets as well. On April 16th, 2020 Bitcoin was $7,354. On April 15th, 2021 Bitcoin was $63,214.

Some experts believe we are in the very beginning of a long bull market with crypto currencies and at some point the “crypto standard” will replace our current “gold standard”.  Financial advisors are struggling with how to offer these assets to their clients as a liquid, compliance approved vehicle is not readily available from a trusted source.   This is all rapidly changing.  Some experts estimate by the end of 2021 crypto currencies will become common place in portfolios as large financial institutions begin offering them.

Determining the Value of Cryptocurrency

Naturally, as a Divorce Financial Advisor, I began thinking how these types of assets were going to impact divorce settlements. In addition to Coinbase, investors can buy cryptocurrencies through companies like PayPal, Cash App, Robinhood, and Blockify. These relatively new types of investment vehicles should be examined very carefully by client’s getting divorced, attorney’s negotiating a settlement, and financial experts working for clients.  In addition, sometimes divorces take 6 or 9 months or even a year to finalize. With any asset as volatile as Bitcoin, you will want to make sure the marital balance sheet is updated before any financial agreement is reached.  Imagine the change in value of a Bitcoin holding from my example above. If Joe and Sally are getting a divorce and filed 4/16/2020 and he owned 3 Bitcoin valued at $22,062. A year later, and now that same Bitcoin is worth $189,642.

Analyzing cryptocurrency holdings in a marital estate is going to become more and more common moving forward. It will be crucial for the client, the attorney and the financial expert to work together to examine the potential impacts of taking the crypto asset versus giving it to their soon to be ex-spouse.

Determining the tax consequences will be a major issue as well. What is the tax impact if the crypto asset is sold? Were there any crypto assets sold in the year of the divorce? There could be a huge forgotten tax bill if you are not careful! Investors must report capital gains or losses from sales of cryptocurrencies on Form 8949 and Schedule D just like buying and selling property or stock. However, according to an article in the February issue of  Financial Planning, titled Crypto Creates New Hurdles for Financial Advisors This Tax Season, many firms only send out the gross proceeds of the Crypto asset sales. It is the investors responsibility to figure out their own cost basis. This can create many hurdles when determining a marital estate. This information is crucial to determine the impact of how the crypto asset should be split.

If you are handling crypto assets in your divorce contact us to help you navigate these waters to avoid costly mistakes and tax issues down the road.  Schedule your complimentary consultation today.

 

MEDIATION AND CO-PARENTING: WHY IT WORKS

MEDIATION AND CO-PARENTING: WHY IT WORKS

As difficult as a divorce can be for a married couple, it can be just as upsetting and confusing for the children of the relationship. Not only are you trying to cope with a major life change, but you are also responsible for inflicting as little trauma as possible to the children of the relationship. Parents want what is best for their kids and often fear the effects a potentially long, drawn out court battle can have -with good reason!! Battling parents in long litigation can be catastrophic for the family and for your little ones.

One alternative to a litigated divorce some families find success with, is divorce mediation. Through mediation, you can often talk through each aspect of your divorce agreement without needing to take things to court or work with multiple lawyers and at a fraction of the cost and time of traditional divorce.

Mediation also allows you and your spouse to set an example for your children by reconciling your differences in a healthy and mature manner.

Creating a Parenting plan, not a custody battle

 When it comes to deciding the specifics of custody and how each parent will spend time with their children, there are several options. One is fighting it out and going to court for a judge ultimately to decide what is best for you, your children and your family unit going forward.  Often, if things get ugly other professionals are brought in to give an opinion of you as a parent and the other parent – amicus attorney’s (an attorney for the children) and mental health professionals are common place in custody battles. The stress, personally speaking, is breathtaking and the fees add up quickly.  Many of these divorces can cost upward of $60,000, $80,000, and more.   The second option is through mediation and collaborating with a team of professionals  to determine what is best for your kids and your continued co-parenting relationship. Your mediator will work with both of you to create a parenting plan that works best for the entire family.   Mediation is about forward looking at what life will look like for all of you. What are your schedules?  What is most important to you?  What special needs, wants or issues need to be addressed around your children?  This is a place to really focus on the solution, not the blame game or the past.  You are getting a divorce. Emotions aside, there are important decisions to be made about your family. Mediation helps you do this in an effective, timely manner.

Save the dirty laundry for another day

 We often hear concerns that going to court will air all your family’s dirty laundry and past parenting mistakes. Unfortunately, this often causes damage to co-parenting relationships and can lead to anger and resentment. In mediation, the goal is not to place blame for past wrongs, but rather for both parties to focus their energy on working to raise their children in the future. The end result is the desire to preserve the family unit and make positive decisions about your child’s care moving forward.

Co-parenting for better or worse

 You may not be married anymore but you still must have a relationship with the other parent for years to come. Children have a base need to feel safe and secure. Healthy co-parenting during a divorce often involves a lot of self-editing, communication with your ex-spouse, and consistent rules and expectations for kids. Unless there is a valid concern or the wellbeing of a child is in question, there is no room for negativity. Family dynamics are going to change, but it should not be at the cost of your children. 

Mediators don’t take sides

 Most couples fear that the court system is biased and that a contested divorce can end up pitting one parent against the other to the detriment of the children. In a litigated divorce, a judge can ultimately decide your parental rights. Mediation allows for negotiations and more control over the custody agreement.

Mediators are highly trained to act as neutrals in divorce cases. She/he will take both parents worries and concerns into consideration and work with you both to create a plan of action. If you and your spouse are willing to work together for the sake of your child, you can likely come to an agreement in mediation that you both agree is in the best interest of your child.  You are also able to help craft an agreement you are vested in.

If you would like more information about mediation and our collaborative process, please visit our site at www.divorcestrategiesgroup.com.  We offer mediation packages with a family law attorney and a financial expert helping you facilitate a win-win agreement for you and your family.   Please click here to schedule a complimentary consultation to learn more about how this may help you.

5 Smart Financial Tips to Plan a Divorce

5 Smart Financial Tips to Plan a Divorce

Thinking about divorce?  If you are, kudos to you for being here and reading this article.  Careful preplanning can save you time, money, and emotional turmoil.

This is already an emotional and stressful time. If you are like me and many of the people we guide through divorce, this also be a time when your thinking is the cloudiest. It is typical to have trouble understanding simple concepts or even wrapping your head around everyday problems.  That is normal!   Relax, take a deep breath, and know you can do this.  We can help.  Here are 5 simple things which can help you prepare financially for a divorce.

1. Have access to money – liquid cash or credit.

 This is vital!! You deserve to have access to funds for your basic living needs as well as professional support throughout your divorce.   This can mean a credit card in your name only, a separate bank account in your name, or even a stash of cash in a shoebox or safety deposit box.

Many couples function well working from joint accounts during their divorce, but we have also seen vindictive spouses empty joint accounts as soon as divorce is mentioned. You do not want to be left without access to funds to pay for divorce professionals or for basic living needs.  Be smart and take the necessary precautions before you discuss divorce with your spouse.

We do NOT mean hide money – we are simply suggesting you have access to funds which cannot be taken from you by an angry spouse without your approval.   You can open a credit card in YOUR NAME only while still using the marital income to qualify for a larger amount of credit.  There is nothing wrong with doing this prior to filing for divorce.  Be sure to do it before temporary orders are in place (aka when you file for divorce.)  If you have already filed for divorce, check with your attorney on what you can, and cannot do, under the laws in your county.

 

2. Gather all the financial documents you can find.

 Financial statements provide a road map to your estate.  They are the building blocks to a marital inventory and proof of ownership or debt.  I am referring to bank statements, retirement and investment account statements, mortgage statements, paystubs, tax returns, insurance policies, credit card statements, and anything else that seems important. Having copies of all this not only helps you stay informed about your financial situation but will save you money when you meet with a divorce professional and already have an organized file of your financial life.

Another reason to gather all the documents you can is to search for hidden assets.  We have had many women come into our office over the years with a box (or boxes) of documents.  One woman was told over and over by her husband they were “dead broke”. He would not even purchase new bed mattresses – he only bought them used.  By going through old tax records, we found $100,000 plus in CD’s and two rent houses she did not know they owned!

Information is power – gather all of it that you can, prior to beginning your divorce.

 

3. Take some time to thank about what you want in your future.

 It can be easy to get so wrapped up in the details of the present you forget about what is next. Do not make that mistake!   Stop and take some time to think about your life after your divorce. In particular – the financial side. Where do you want to live? What are your expenses going to be like? I recommend you put together a budget outlining all your expected living expenses. This will give you some clarity about what you will need moving forward and can lessen some of the anxiety about the future.

It may also make sense to work with a divorce financial advisor prior to filing so you can have an idea of what life after divorce will look like.

 

4. Find a Divorce Financial Coach or Therapist.

This may not seem like it is a financial step, but it is. A professional on your team that will help you make sound decisions can make a big financial impact on your future. Emotions run high during the divorce process and as we said earlier, your thinking will be cloudy. A divorce coach can help you work through those emotions to free your mind up for the business of divorce so you can objectively focus on the financial outcome.  A therapist can help you unbundle why you are in fear or why you feel the way you do and help you overcome obstacles entangling you emotionally.

When I went through divorce I had an amazing therapist guiding me and helping me untangle the feelings I had.  To be able to negotiate from a place of power, I had to get my emotions behind me and look at the situation like a business negotiation.  I worked with that therapist for 2 years after the divorce to help me not pick the same type of person and I didn’t. I am now remarried for nearly 12 years as of this writing and with a wonderful man who is very good to me and my daughter from my prior marriage.

 

5. Finally, think about how you would like to divorce.

If you think it is going to be a battle for every asset and advantage, then adversarial litigation attorneys will be involved, and the cost will be $20,000 – $50,000 or more. If you envision a more amicable process, then perhaps mediation is in your future. It will allow the two of you to talk through the issues and agree between yourselves what works best, saving a lot of money in the process. In either case you may want a financial professional, like a Certified Divorce Financial Analyst®, to be part of your team. The CDFA® can help remove any confusion about your financial situation, present options for the division of your assets, and provide a picture of how a given settlement will impact your financial future today and in the future.

A divorce is probably the largest financial transaction most people will undertake during their lifetime so make sure you are fully informed. These 5 simple things will get you started on the right track and help make the difficult process of a divorce go more smoothly.

For a complimentary consultation please schedule with us online today or call us at 281-505-8177.  Also, to understand your divorce options sign up for Divorce Options in Texas either online or in person in our Woodlands location or Houston location.  More information can be found online at www.divorcestrategiesgroup.com.

4 Tips to Divorce Financial Planning for Women

4 Tips to Divorce Financial Planning for Women

Of all the worries and concerns to think about when going through a divorce, financial planning may not be at the top of your list. It is likely you are working, raising kids, and paying the bills. Many newly divorced women feel the demands never end. Creating a new financial plan is important because you have lost the extra income of your spouse. It is also especially important if your spouse managed your investments and longevity planning. Outsourcing your financial planning makes sense when you are short on time but still need to make sure you manage your money well as you age. We encourage women to consider financial planning for several reasons, but most of all for the woman’s wellbeing and peace of mind. Here are a few tips to get started.

  • Planning at the Beginning

Your financial life after divorce starts as soon as you sign legal paperwork agreeing to a settlement with your ex-spouse. You need to make sure you know what you are signing, because it will have a big impact on your financial future. We recommend meeting with a financial planner to review the settlement before you agree to it. Financial planners can find opportunities you might have missed such as tax breaks or being able to retire earlier than you expected. This process with allow you to understand all your options before you sign the settlement agreement.

  • Planning for Longevity

Women generally have a longer lifespan than men. Financial planning in divorce will create a consistent cashflow strategy and budget. You and the financial planner will create a list of priorities you will need money for such as helping to finance your children’s education.

  • Planning for Financial Confidence

Some women going through a divorce assume they will have to live like a miser because they have an internalized fear. Financial planning gives you freedom by replacing fear with confidence. Investing money is difficult to do when you’re paralyzed by fear, but not investing means you could outlive the money you have now.

  • Planning for Peace of Mind

As financial planners, the goal we have for all our clients is to give them financial peace of mind. You will know what bills you need to pay every month and how much of your disposable income you can spend. You can spend your money in freedom because you know you have a plan for your budget, taxes, and investing. We can also help you adjust your financial plan if you experience new significant life changes.

Another common assumption women sometimes have during a divorce is they automatically own an asset the court has awarded to them. We will walk you through the steps you need to take before you can claim an asset as your own.

At Divorce Strategies Group, our main services to you is financial planning to help ensure you do not run out of money in your lifetime and to help you to take ownership of assets awarded to you in the divorce. We love the work we do because it empowers women to be financially independent for the rest of their lives regardless of circumstances. If you are going through a divorce and are in need of financial planning, please contact Divorce Strategies Group and schedule a consultation today.

Options for Dealing with Debt in a Divorce

Options for Dealing with Debt in a Divorce

Whether you have a career or are a stay-at-home mom, debt complicates a divorce. Nobody wants to be responsible for paying a spouse’s debts, and you want to avoid having any joint obligations on your side. There is a way forward if you are aware of your options.

Keeping the Debt

You have a few credit cards that you share with your spouse. When you look into your spouses’ spending, you discover that they have used credit cards for all kinds of things you don’t: gambling, alcohol, and a few hotel visits that have nothing to do with business trips.

This naturally is frustrating, so you don’t want to take care of the bill. They’re the other spouse’s expenses and they should have to take care of it, but they are not. The bills don’t get paid and time is moving forward and because the credit cards are under your name, whose credit is getting ruined? Yours.

You want to take care of any joint debt like this, so your credit report is clean. You will be compensated for it in the settlement by getting more of the cash, house, 401K, investments, or asset. Until that happens, you must protect yourself and keep paying the credit cards.

Excessive Spending

If your spouse is spending thousands of dollars you did not approve, we call that a “waste claim.” These can be difficult to prove and you will need attorneys to help.

In one case, the husband had bought a BMW and an apartment for his girlfriend. We found proof of that spending through receipts that amounted to tens of thousands of dollars. Our waste claim proved that he was stealing from the estate and he had to compensate the estate. With the help of a financial professional and the lawyer, he paid that claim on the estate spreadsheet and the wife was given more in assets as a result.

Digging for Information

If you know your spouse has spent a lot of money, but you do not know exactly how much or where there are ways to find this data. For our clients, we do a lot of digging, starting with the accounts we know about and looking for fishy transactions, such as massage parlors, prostitutes, or rent in New York when you don’t own property in New York. We look for anomalous patterns, flag them and ask for more information. We look at property records, tax records, and all kinds of paper. If the spouse isn’t forthcoming, your attorney can subpoena what we need.

Years ago we had a client with a special need’s child. The husband would not pay for future horseback riding for their child with Down’s Syndrome which had proved to be very helpful for the child in the past. He said they did not have any money. Through five-year-old tax records and pieces of paper that our client had been collecting for month, we discovered two rental homes, a girlfriend, and $200,000 in Certificates of Deposit.

If you think your spouse is stealing or hiding money, collect any kind of information, no matter how old or small, and bring it in for us to look at.

Want to know more about what to do? Please contact Divorce Strategies Group for a complimentary consultation. We’ll talk to you about next steps so you can receive the assets which are rightfully yours!

Married to a Narcissist

Married to a Narcissist

Many of the people I meet with tell me they are married to a narcissist. As cutting as this may seem, many people are divorcing someone with a personality disorder. One therapist we refer states many people who divorce have issues like narcissist personality disorder because the people who do not have this or other personality disorders are able to work through problems in the marriage and stay married.  So, if you are married to someone you think is a narcissist, know you are not alone.  Also know there is a way out of this with your sanity intact, it will just take a little extra effort.

What Is A Narcissist?

A diagnosis of Narcissistic Personality Disorder can only be given by a mental health professional.  There are signs and symptoms you can identify and read about all over the internet.  A general internet search will typically identify this as a disorder in which a person has an inflated sense of self-importance.  Narcissistic personality disorder is found more commonly in men. Symptoms include an excessive need for admiration, disregard for others’ feelings, an inability to handle any criticism, and a sense of entitlement.

Although understanding and recognizing the characteristics involved is helpful, this knowledge will not give you the help you need to divorce and save your sanity. It can be frustrating and emotionally draining.

It did not start out this way. They may have started out showing you how much they loved and cherished you. You believed it would always be that way. When did it change? Do you wonder if maybe they will change their mind and go back to loving and cherishing you like they used to? It is normal to hope for that, but it is likely keeping you frustrated and stuck. And, if you are reading this, it is probably not going to happen.

And Here’s Why . . .

If you are dealing with a narcissist, you have likely already tried everything! Not only does it get tiresome it can wear down your own self-esteem. It takes a massive amount of your time and energy with nothing in return!   Bill Eddy, LCSW, Esq., creator of New Ways for Families and founder of The High Conflict Institute has 4 Tips on How to Deal with a Narcissist Without Getting Stuck and Disliking Yourself:

Do not call them a “narcissist!”

As tempting as this is, it absolutely backfires and makes things worse.  Instead, they become obsessed with proving you are the one with the problem.

Do not argue with them.

You do not need to defend yourself because it is not about you.  It is about them and their personality.  They have no insight into their own behavior and see things in all or nothing terms.  They see themselves as the victims and they feel it is your fault.

Set limits on what you will do.

You have probably spent years trying to figure out how to placate a narcissist, right?  Bill Eddy has a saying he uses…”FORGETABOUTIT!” You are not going to change them so work on changing how you react to them.

Do get support and consultation.

Your self-esteem may be worn down from all the insults, criticism, embarrassment, and shame.  Bill Eddy suggests getting help from professionals like a coach or therapist.

How to Move Forward

You will need a step-by-step course of action. You may have to cut ties and build some distance emotionally. The key takeaway is you will need support and guidance on how to successfully navigate this difficult time. You will not want to do this alone.

Please reach out for your complimentary initial consultation.  We will give you the information and confidence to decide how to best move forward and have the life you deserve – a life of joy, love, and peace of mind.  Contact us today!

 

What is a QDRO?

What is a QDRO?

A Qualified Domestic Relations Order (or QDRO, pronounced “qua-dro”), is a judicial order in the United States, entered as part of a property division in a divorce which divides a retirement plan or pension plan by recognizing joint marital ownership interests in the plan, specifically the former spouse’s interest in that spouse’s share of the asset.

QDROs apply only to employee benefit or pension plans subject to the Employee Retirement Income Security Act (ERISA), the American federal law governing private sector pensions. Domestic Relations Orders or DRO’s divide military retirement pay and Federal civil service retirement plans. A QDRO or DRO may provide for marital or community property division between the plan participant (the employee or former employee) and the alternate payee (the spouse of the employee or former employee). IRA’s, ROTH IRA’s and SEP IRA’s are not subject to ERISA and therefore are not divided typically with a QDRO but rather paperwork from the issuing company.

QDROs and DROs must first be issued by a State-level domestic relations court. The QDRO or DRO is a separate document in addition to your divorce decree. It must be signed by both parties in the divorce as well as their respective attorney’s and the court. Once it is signed by all parties, the QDRO or DRO then needs to be sent to the company’s plan administrator. It must meet the standards of the plan to which it applies. Each company or issuing entity will have their own wording for QDROs and DROs.

Generally, you must have a separate QDRO or DRO for each plan. Each retirement plan is governed by different rules depending on the plan type (i.e. 401(k), Pension Plan, 403(b)). Each QDRO or DRO must be tailored to the requirements of each plan.

The timeline for receiving your awarded funds from a QDRO or DRO is approximately 90 days. We highly encourage you to request the QDRO/DRO process begin as soon as you have completed the mediation process or a decision on the estate has been determined. It is common for a QDRO/DRO to be sent for pre-approval. This is where he QDRO/DRO is completed but not signed, instead it completed with the plan participants information and the divorce decision as far as division is sent to the administrator for pre-approval. This process takes approximately 30 days. Once pre-approval is completed, you know your QDRO/DRO will be approved. We then encourage you to have the QDRO/DRO submitted in conjunction with your divorce decree. This tends to speed up the process and prevents the frustrating delays we have seen multiple times.

If you are in the midst of or finishing up divorce negotiations, we encourage you to schedule a complimentary 30-minute consultation to discuss your situation. We can potentially help you avoid costly delays and frustrations in the QDRO process.