In coaching we often suggest clients that they “keep Amy in the backseat” when you’re in a conflict. We are referring to your Amygdala. A tiny almond shaped structure in our brains. Although small, it is mighty. The amygdala controls the fight or flight response in our bodies and brains. Often it acts instinctually and without warning. This is especially true when dealing with a High Conflict Personality (HPC) partner. Our brain unconsciously takes over and we often respond in ways we normally wouldn’t. When we feel lack of control or vulnerability it’s nearly impossible to have thoughtful, well considered conflict resolutions.
There are methods to keep “Amy” in the backseat. Here are three communication tactics that can help you regulate, respond, and rise above conflict.
In divorce cases we see several physical responses that happen when we are faced feeling attacked. I want to focus on two that I see most often.
Approaching conflict with aggression. Aggressive communication is when you state your needs and leave little room for your partner to share theirs. Examples of aggressive communication would be an attempt to dominate the conversation, using humiliation, critical language, and “you” statements in an attempt to avoid your responsibility in the situation and negate feeling insecure about yourself. This method of communication is often seeing with HPC’s.
Fawning is a response that is very common, especially with clients that have suffered past trauma or suffer from PTSD. Fawning is a maladaptive survival response. It is ones need to avoid conflict at any cost. When a client is in a fawning response they often exhibit people pleasing behaviors, deny their truth for the sake of ending the conflict, and feel that they are unworthy and undervalued.
Approaching conflict with either response can is a recipe for disaster. One of you will surely walk away from the conflict feeling “less than”, unheard, and unloved. We can regulate our own physical reactions to regulate our bodies response to threats. Start with a deep breath. Taking a moment to center yourself and regulate your breathing can instantly change the bodies stress response. Take a break from the conflict, find a quiet place, and spend five minutes focusing on your breath, inhaling, and exhaling slowly. You are allowed to excuse yourself from the conversation. The conflicts you are trying to resolve did not develop overnight and they do not have to be resolved in an instant. When you feel your heart rate begin to rise and the walls feel like they are closing in, simply tell your partner you need a moment to gather yourself and acknowledge you will touch back on the topic when you are in control of your thoughts and emotions. There is absolutely no reason These simple tactics can you help you prepare for the response phase of the argument and knock it down to a discussion.
Reasonable, well thought out responses to conflict help us to protect our mental health, self-worth, and sanity.
Now that you have taken a moment to gather yourself, it’s time to gather your thoughts. I encourage clients to take time to look at things from their partners viewpoint. Try to understand the issue and why it is so important to them. At times, the real reason may be convoluted by finger pointing and “you never” statements. For example, my client is angry that her husband forgot it was their anniversary.
She took time and made an effort to make him his favorite meal and buy him a card. How dare he not get her a gift? Is the issue the gift? Is it possible that the gift was the issue on the surface of the problem but really, she feels uncared for, unloved, and possibly unworthy? In true conflict, we must dig deeper to find the issue because it’s rarely floating on the surface of our relationships. Changing our perspective in turn changes our insight.
What if your partner can’t articulate the deeper issue? I suggest questioning them with curiosity. What are you upset about? Can you tell me why you feel like that? and my personal favorite, “what was your expectation of me in that moment?” Try not to interrupt them and stay on the actual issue at hand. Curious questioning does a few things. It gives your partner acknowledgement that you are open to listening and a willingness to let them articulate how they really feel. This can lead to a deeper understanding of their perspective, the opportunity to form a more informed opinion for yourself, and hopefully a resolution in the conflict itself.
How we respond to our partner can make or break the outcome of the conversation. You have the choice to respond in a non-confrontational manner once your partner has finished speaking. “I had no idea you felt that way, do you mind if I address this from my perspective?” or “I would like to avoid continuing to argue about this topic, how do we suggest we fix it?” The goal is to identify the issue, take responsibility only for our actions (if there is any), and stop the conflict cycle in its tracks.
“But Melissa, this just makes it seem like I’m being a pushover! By keeping my cool and not showing a reaction, the other person doesn’t know how much they have affected me with their words or actions.” This is precisely why these methods work. HCP’s are fueled by the ability to incite hurt, confusion, and lack of control on their target. If you have been with your partner for a while, they know exactly what buttons to push to get a reaction from you. They will rely on that pattern to gaslight, stonewall, and trigger you to get their desired outcome. How many times have you ended a conflict and come away questioning yourself, your involvement, and wondering if you really are at fault for the problem?
Let’s change that! By regulating your body’s reactions, thoroughly considering your responses, and responding without malice, you have taken all the control back and on your terms. You weren’t goaded into angry reactions and remorseful words that can’t be taken back. You maintained your dignity, bolstered your self-worth, and you can leave the conversation feeling good about who you are at your core.
This is not something you can learn overnight. High conflict relationships are volatile, and these methods must be practiced over time. After all, you are fighting your amygdala, its natural response, and it takes time to unlearn unhealthy communication. This is why so many of my clients continue with coaching even after divorce, particularly with co- parenting after divorce. These methods work and can be applied to any kind of conflict that needs resolution.
At Divorce Strategies Group, we offer mediation and coaching services for clients thinking about divorce, in the midst of divorce, and even co-parent coaching. If you can relate to this article, I’d love to talk to you. Complimentary Discovery Session’s can be booked directly through our website.
* If you are currently in a relationship and experiencing domestic violence, this article is not applicable. Please call/chat/text with an advocate by calling 800-799-SAFE or visit thehotline.org.
Are you waking up at 3:00 AM, feeling overwhelmed and panicked by the uncertainty of your future?
Questions and worries run through your mind? “Can I afford to get divorced?” “How do I tell my spouse our marriage it’s over?” “What about our kids?” “How do I tell them?” “How will I survive?” “Do I have to share my retirement savings?” “Do I need to lawyer up?” “What lawyer do I hire?”
The questioning can be endless and in a attempt to find answers, you start Googling. Taking the first steps in a divorce can be terrifying and overwhelming. In researching, something pops up about “Divorce Coaching.” Like almost everything else related to divorce, this is a new term for you.
What is a Divorce Coach?
A Divorce Coach is a trained mental health professional who shepherds you through your divorce. Divorce Coaches have unique expertise in divorce, co-parenting, parenting planning, child development, the impact of divorce on children, and all other issues related to divorce. Divorce Coaching is not therapy. Instead, coaches specialize in helping you emotionally cope with divorce before, during and after the process.
Is Divorce Coaching Right for Me?
For most people, the prospect of a divorce is an overwhelming life crisis. You need to make big decisions at a time when you are emotionally overloaded. The demands and decisions can be confusing. Divorce can require the time and energy of a full-time job (when a lot of women already have full time jobs and are full time moms). In the process, it can also be exhausting to get through each day especially when you are meeting with your legal team or financial advisors to discuss divorce related issues. You don’t know what steps you need to take, how you can figure it all out, or how long it will take. If this sounds familiar, then a Divorce Coach can help.
How Can a Coach Help?
A Divorce Coach can help you understand one of the first and most important decisions you will have to make. You will need to decide which of the divorce process options available to you will work best for your family: a do-it-yourself divorce, mediation, collaborative law divorce, or litigation. The process you choose will dramatically affect your outcomes and the process.
A Divorce Coach will walk the path with you, through the legal process you have chosen, to provide support and guidance when needed. Divorce coaches also offer post-divorce support, addressing issues like co-parenting, setting up a spending plan, and claiming your new life.
One of the first and most painful things you will have to do is talk to your children about the upcoming changes in your family. A Divorce Coach will help you (and often your spouse) structure and plan for this, telling your children what they need to know. The Coach will help you respond to their questions and concerns in age-appropriate ways.
A Divorce Coach will help you build or strengthen your skills to cope with your emotions, especially at meetings with professionals and your spouse. In addition, your Coach can help you develop and hold you accountable for implementing much needed self-care practices. This is critical as they can help you feel more grounded and help you cope during this time of life changes.
A Divorce Coach will help you begin to envision your life post-divorce, as a single parent and perhaps going back to work. The Coach will help you set goals and keep you accountable for them. This type of planning may influence your divorce negotiations. For example, if you need re-training to enter the workforce, this can be discussed as part of your divorce settlement.
Coaching will help you develop skills for the negotiations, which usually come after the information-gathering stage. With the help of your Coach, you will be clear about what is important to you in the final resolution. Identifying what matters most to you and where you can compromise is critical in divorce negotiations, and a Coach can help you do this with confidence.
Your Coach will help you understand and think through the many decisions you will be asked to make. A coach can help you feel brave, confident, and articulate in expressing what matters to you without being hijacked by emotions. This makes the process more efficient and cost-effective!
A Divorce Coach can help you build a new kind of parenting partnership relationship with your soon-to-be-ex-spouse. A Coach can work with you to establish good communication, boundaries, and strategies for dealing with issues that inevitably arise.
A Divorce Coach provides a safe space to emotionally let go, vent, breathe and heal.
How Do I Find a Divorce Coach?
At Divorce Strategies Group we offer complimentary Discovery Sessions to discuss you and your situation. This introductory call with Divorce Coach Melissa Provence allows us to learn about you and pinpoint your immediate needs. Let’s talk!
Sound financial planning may be the last thing on your mind when divorcing but it may never be more valuable. A lawyer may be your first call when you decide you want a divorce. A financial advisor knowledgeable about divorce matters should be your second
In many cases, a divorce has more impact on a person’s current and future financial well-being than any other event in their lives. Sound financial planning may be the last thing on your mind when your marriage ends — particularly if it ends in conflict — but it may never be more valuable.
Divorce happens in an emotionally charged environment. While in this state of mind, you are making financial decisions which will affect the rest of your life. It is critical to have a knowledgeable financial advisor on your divorce team walking along side you and your attorney. Financial planners will give you the overview of financial guidance while your attorney will explain the law and guide you with legal decisions.
In general, for everyone except the very wealthy, divorce will hurt your standard of living. Two households are more expensive to maintain than one, and if one person in the marriage has been a stay-at-home parent, there is less income and assets to go around. In addition, unless your marriage was short-lived and is ending amicably, you have no children and little marital assets and income, you should consult both a lawyer and financial advisor.
Online divorces are dirt cheap but a good idea only for very simple circumstances with mutually acceptable terms. Mistakes made in a divorce settlement have long-lasting financial effects.
Five key issues to consider in divorce
A divorce settlement mediated with a collaborative approach has major advantages over litigation for the divorcing family. It typically costs less and has higher compliance rates than with litigated settlements. It often requires much less time and emotional turmoil.
More importantly, it can save a parent’s ability to co-parent minor children after the divorce. The biggest potential downside is that if the mediation doesn’t work, you’ll end up in court anyway prolonging the ordeal.
2. Budget for the long-term:
A clear understanding of your long-term living expenses is crucial to negotiating support payments and a settlement you can live with. That’s particularly so for parents who retain primary custody of children.
Larger expenses such as tutoring, special needs, extracurricular activities, vehicle purchases and insurance, senior trips and college are among the future expenses which need to be addressed in a settlement. Ideally, child-support payments should be protected by term life insurance.
When you come to the negotiating table, it is critical to think about your expenses not just two to three years after divorce but ten and fifteen years out. The more you can discuss about current and long-term needs — particularly if there are children involved — the better.
3. Watch your assets:
Marital assets are not all created equal. A savings account with $100,000 is worth much more than a joint retirement account that will eventually be taxed or illiquid equity in a home of that amount. Make sure you consider the liquidity and after-tax value of all assets and the different risks that they present.
Holding onto the family home could be a very heavy financial burden. While it may be a source of comfort in a difficult time, it could come back to haunt you. Mothers with custody of children often understandably want to keep the house. Then they come to us, and we walk them through the costs to upkeep the home and a plan to do so, if possible. We also find it valuable to have older homes inspected to uncover are any potential large costs ahead such as termite damage, foundation repair or major plumbing repair.
If there are more complicated marital assets such as private equity, restricted stock, business interests or even cryptocurrency holdings, an advisor is essential to evaluate and advise on those assets.
4. Mind your taxes:
Like everything else in life, divorce settlements have big tax implications. Understanding how different assets and income streams are taxed is crucial to the equitable division of assets.
It is also important to be aware of less obvious items such as pre-paid taxes which may have been paid already out of the marital pot but could be refunded to or used by a former spouse or tax-loss carry forward benefits if a large amount of non-qualified brokerage funds are owned.
5. Update your life:
The key things to address when your divorce settlement becomes final include updating your will, powers of attorney, beneficiaries, and other estate-planning documents to reflect your changed circumstances.
If you have been out of the workplace for an extended period, think about whether you need to return to it and if you need training to help you get back to work. If you need training, it is wise to research how much it will cost and negotiate for that in your divorce. It’s hard telling a stay-at home parent that they should go back to work but in some cases they really should. A person’s largest asset may be their earning capability. It can help you add to your nest egg and enable a better retirement.
A knowledgeable, experienced divorce financial planner can show you where you will be with or without returning to the workforce and if you are working, help you readjust your retirement plan to get back on track.
Divorce Strategies Group, LLC is a full financial planning firm for those engaging in divorce with a forensic accounting arm. We understand the laws as they relate to finance in divorce, and we understand financial planning. In conjunction with our sister firm, French Financial Group, we can help you walk through divorce and emerge with a strong financial plan for your future. Please call us at 281-505-8177 or reach us online to schedule your complimentary consultation today.
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.
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.
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.
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.
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!
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.
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 Bitcoin, Ethereum, Litecoin, Doge 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.
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.
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.
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.
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.