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.
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.
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.
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.
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!
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!
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.
Over the years I have been doing divorce financial advising, I’ve learned so much from women just like you. It’s so normal for us to ask questions and want information from those who have already been through this overwhelming time in our lives.
I remember talking with my friends (many of whom had been divorced) and wanting them to understand how my experiences left me feeling afraid and alone. I wanted to compare my story to theirs. I wanted to not feel so alone. After so many calls and conversations, I’ve made lists and lists of what I’ve heard being said and I want to share some key takeaways with you. I hope it will help you “cut through the divorce noise.”
1. You don’t need to listen to people who don’t know what’s best for you.
Some well-meaning friends and family want you to quit worrying about everything you’ve got on your mind and “just get back out there.” If you’re not ready, then take it easy. You’ll be ready when you’re ready. There’s a huge, new world waiting for you when you’re ready!
2. Try to separate the emotional part of your journey from the business of divorce.
There are so many ups and downs and it’s important that you have emotional support so that you have a safe place to deal with all of the feelings you’re experiencing. That is the value of a coach or therapist.
3. One of the biggest issues women tell me is that they’re afraid.
Honestly, who isn’t afraid? It means you’re human, but it doesn’t mean you’re not going to be OK. Your fear can actually move you forward and push you to learn new things that you never dreamed you could learn.
4. Feeling lonely isn’t the same as being alone.
The reason some women don’t want to divorce is because they’re afraid of being alone. But the truth is that so many of us were lonely in our marriages! When I talk with women who are divorced, they actually like being alone and just being able to do whatever they want whenever they want!
5. Wanting to find all the answers online.
Many women tell me they are getting all their information online. While I do suggest you read about different options for divorce, for example, I don’t recommend you keep digging deeper and deeper trying to find the answers to all of your concerns. Again, that is where you can get in trouble with inaccurate information. It can lead you to doubt and waste time questioning what is true and correct in this process.
6. If you’re feeling so tired, hurt, and damaged emotionally right now, I’ve learned that so many of you are going to find love again!
Even if you’re not even interested right now, after you’ve worked on the role you may have played in the divorce, it may surprised to find that you’re interested in something new and healthier. It’s human nature to want connection with others. So give yourself time to figure out who you want to show up as now on a deeper level and you will attract what you need.
Don’t Give Up
I want you to know you’re not alone and we all have worries and fears. If I had to summarize what I’ve learned through the “divorce noise” is that we all struggle. But there is light at the end of the tunnel – it just can be a long tunnel and the light can seem so far away, but don’t give up.
During divorce, many women are concerned about financial survival—and with good reason. Studies show after divorce, the wife’s standard of living may drop almost 73% while the husbands may increase by as much as 42%. Many factors combine to lower a women’s standard of living after divorce. Child support may not be adequate to cover the true costs of child rearing, and she might have lost many important years of career growth, making it difficult for her to get back on her feet after divorce. By familiarizing yourself with the ten financial pitfalls of divorce for women, you can save yourself a lot of heartbreak and hassle in the future.
1. Believing you cannot afford an experienced attorney
Divorces are expensive. There is no doubt. The fees involved for a regular divorce with a qualified attorney are expensive – attorney fees, therapist bills, new living expenses and other advisor fees. Further, the funds previously used to support one household must now stretch to support two. If you are contemplating divorce, now is the time to begin amassing the funds you’ll need to stay afloat. Think of a divorce as a long term financial cost and plan accordingly before you file or when you first start to believe you spouse may be checking out of the marriage.
If you are not able to save cash for the divorce process, you still have the ability to hire good support for yourself. You can open a credit card in your name alone, while you are married, and use the marital income to qualify for a card. That card can be used for divorce related costs and at the end of the divorce, it is placed on the marital inventory as a debt of the marriage. You have power!! Contact Divorce Strategies Group on this topic and we will walk you through what to do.
2. Bad timing
Divorce is a marathon event which requires careful preparation. Before you act on the divorce, consult with legal and financial professionals, and read about the subject. Also, think about where you are in life. Did you or your spouse just start a business? Are you or your spouse just about to go back to school for a graduate degree and amass student debt? Life stages like this may cause you to pause on the divorce or act quickly before major community debt amasses. If you’ve been married eight years or just hit the nine year mark and your spouse is the major breadwinner, you might want to stick it out a little while longer before you file for divorce. In order to collect on your ex-spouse’s social security you must be married for at least 10 years from the date of marriage to the actual date of divorce. Finally, don’t just pack up and drive away in a car needing major repairs with old clothes on and kids who need braces. Fix what you need fixed, buy what you want to buy and get your kids situated with what they need before you leave, as much as possible.
3. No records
The three most important words during divorce are: document, document, document. Try to obtain copies of all financial records before your divorce begins. Make a clear copy of all tax returns, loan applications, wills, trusts, financial statements, banking information, brokerage statements, loan documents, credit card statements, deeds to real property, car registration, insurance inventories, and insurance policies. Also, copy records you can use to trace your separate property, such as an inheritance or gifts from your family. The corpus and the capital appreciation of these assets should remain your separate property as long as you can document them. Copies of your spouse’s business records can be a treasure map illustrating where hidden assets, if any, are buried.
4. Overlooking assets
Texas is a community property state. That means every dollar earned during the marriage belongs equally to each spouse. It matters not that the income went into your bank account, a business, a 401k or a second home – those funds belong to each spouse. Half of everything is yours! Even if you don’t want an asset, it can be used to trade for something you do want. Inventory safe deposit boxes; track down bank and brokerage accounts; keep pay stubs, retirement plans, and insurance policies. Don’t overlook hobbies or side businesses that might have expensive equipment or generate income.
5. Ignoring tax consequences
Tax consequences are one of the most overlooked or forgotten issues in divorce finance. Most financial decisions have tax ramifications. Should you take the brokerage account or the retirement plan? Should you keep the house or sell it now? Don’t ignore the hidden tax costs of divorce in making these decisions. Your situation may require some calculation by an accountant or divorce financial planner to determine if you are really getting the best deal. And, if there is a chance your past joint tax returns omitted income or overstated deductions, you may want to seek an indemnification clause to protect yourself if the IRS decides to audit.
6. Thinking ignorance is bliss
During divorce ignorance is not bliss, it’s expensive. As painful as it may be, diving in and participating in the process can help you recover more quickly from the divorce because you will have a healthy sense of control over the process, be focused on practical things, and be working with your ex to get things done. Also, taking an active role in the negotiations can help you achieve a better settlement. You will also likely have less conflict and litigation after the divorce, better compliance from your ex, and better sharing of information about the children. Your attorney will give you valuable legal advice which should weigh heavily into your decision making process, but all of the decisions are ultimately up to you.
7. Mixing money and emotion
This is really tough for women who were hurt during the divorce, however, it is crucial. Try to think of this from an unemotional, business like perspective. This is likely the largest business transaction you will make in your life – treat it as such. View your attorney as a paid professional rather than a friend or confidante. When your grief is overwhelming, go to a friend or support group, not to your attorney, who is billing you at his or her normal hourly rate. In addition, revenge is not helpful in long term planning and financial negotiations. It will not make you happy to declare war on your ex – it will likely just make you broke. Making the effort to bring the divorce to a successful conclusion with as little rancor as possible can help you financially today and in the future.
8. Not fighting for what’s legitimately yours
Divorce negotiations are not only about survival; they are about molding your long term financial future. It’s important to not let wanting to please others or look like “the good girl” get in the way of taking what is legitimately due you. You have to insist on getting what you legally deserve. Even if you hope you will eventually be able to reconcile with your ex, it is not guaranteed (you are getting divorced after all). Letting him keep all of his 401k because he’s worked so hard could put you in the poor house when you are older while he enjoys a great life. No matter your feelings, stand up for yourself and get your legal share. If you reconcile, that’s fine. If you don’t, you’ll still be able to take care of yourself financially. Taking what is rightfully yours (50% at least) is not being greedy, it is protecting your future and honoring your own value as a human being. No matter what your spouse says, you are worth it!
9. Taking the payment overtime versus the lump sum
Receiving a guaranteed, monthly, court ordered income sounds great doesn’t it? Yes, but what if your spouse loses his job? Becomes disabled? Quits his job and moves overseas to work? What if he just stops paying? What if his industry goes through 2 years of consolidation and he is laid off time and time again? What if he starts his own business? We feel like getting a lump sum is much better than a series of payments – court ordered or not. If he stops paying the court ordered support, guess what you have to do to get him to pay it again? Yes, go back to court. At some point, those court costs can be more than what you would get from him in the first place. Take the up-front money instead of the income when given a choice. You can create your own income stream for that lump sum payment or use it for other financial needs in the future.
10.Not getting good professional advice
Right now, you need all the help you can get! Divorce can be very complicated, so don’t try to do it all yourself. Hire an attorney who can give you excellent advice—even if he or she is expensive. Engage a divorce financial advisor to help you make wise financial decisions and create a roadmap for your future. Find a good therapist to help you emotionally. Don’t skimp now on matters which will affect the rest of your life.
Your first Christmas or other major holiday after divorce can be tough, and it will no doubt be different. I still remember my first Christmas without my child. I was able to negotiate having my child for the very first Christmas after divorce, but the second one was without my child, and it was a whopper. The first holiday without our children provokes a special circle of emotions. It was, frankly, awful. However, I am proof you can survive the first one and learn how to thrive for many more after. The key is finding the tools which help you cope and creating new routines.
So, my friend, if you’re going through this, I really feel for you right now. It will get better (I know, it doesn’t feel like it, but it will) and hopefully these resources for getting through your first holiday after divorce will help.
Tools to Cope
While it may sound silly, coping tools, in my experience, really do work. I’ve tried many different tools and have found some to be more beneficial than other.
First, be kind to yourself. This is a new affair and it’s tough. If you notice negative self-talk tell that voice to kindly shut up, go away and leave you alone. That voice is a lie. You are a survivor. You have this. You deserve a little self-care. Bubble baths, naps, facials, massages, quiet time – do what you can to provide yourself with a little self-care on a regular basis.
When circumstances around me are spinning out of control, grounding myself in reality is very helpful. It provides a level of safety and security when I cannot control the circumstances or people around me. I do this by connecting to my physical surroundings. Standing in the grass barefoot and focusing on the feel of the grass, counting the number of legs on chairs in the room, focusing on the physical shape of objects or touching something hot or cold in the room are all examples of grounding tools I have used.
Journaling is another tool I have used over the years which has proven helpful. I had a special chair in my bedroom which was soft and comfortable during and after my divorce. I would read an inspirational saying or daily book of quotes and then journal about how those quotes applied to me. I would also just start writing some days. When life was really stressful, I commited to journaling at least 10 minutes per morning. Some days I started off by writing, “I’m having the feeling of…..”. Journaling not only helped me unpack my emotions, it helped me sort through what I wanted and needed. Some journaling entries were vents, some were profound, and some were just silly.
When I am in stress, deep breathing really helps. I use the breathing I learned in yoga class – deep breathing in the nose and out of the mouth. Count to 5 on the breathe in, hold for a count of 3 and then exhale for a count of 5. I use my apple watch a lot which actually tells me when my heart rate is elevated and tells me to breathe. If my watch is not on and I’m feeling anxious, stressed or scared, taking two minutes to breathe helps me relax, calm down and focus.
I would not have been able to survive divorce without my friends. I had 6 women on speed dial and I called them daily for a while. If all of your friends were from your married life, I encourage you to reach out to groups where you can make new friends. There are multiple groups for divorce recovery, one is DivorceCare.org. I personally went to this and found it very helpful. I also reconnected with friends from my past who I knew were single. Lastly, Divorce Recovery for Women is another resource specifically for women after divorce to help them connect, learn and thrive.
Even if you have great friends, reaching out to others in your same phase of life for support and encouragement can be very helpful. We do life better together and walking through one of the most difficult things in life is better done with others by your side.
Professional Therapy or Life Coach
Going to therapy or a life coach also has proven very beneficial in my life. I went to therapy for 2 years during and after my divorce, and on and off since then. I’ve received so many good tips tools and walked through how to build my own self esteem in therapy. I also learned why I picked the men I did, and how to change my “picker”.
A healthy routine of eating well and exercise is another great coping tool. We all know we should do it, but really doing it is important especially during stressful times. I joined hot yoga when I was in the divorce process and it was so helpful. I have also joined other group exercise classes or just ran on mu own. The best thing I found was to create a routine, so my body knew what to expect each day and when as far as working out, eating and working.
How to Share with Family, Friends and Co-Workers
Talking to your friends, family and coworkers about your divorce, especially if it is recent, is something you will no doubt have to deal with. Be prepared for this. Having a script prepared will allow you to present only what you want when talking about your divorce. Decide what you do and don’t want to share, prepare a script and follow it. I had a standard script for why the divorce happened, how I am doing and my thoughts on dating again. These are the three main topics I was repeatedly asked about so I had a set script for each. This helped me move on and avoid saying anything I would later regret.
Social media is inherent to our days, as much as breathing or drinking water it seems! So, before you post that rant or that picture…think long and hard about it! Make sure that you’re keeping your social media usage reasonable, so you don’t have to explain anything or show pictures to anyone that you don’t want.
I hope you find courage, peace, and joy in these tough times. You can do this! We are here to help. If you would like help finding a support group or getting your life in order contact us. We are happy to help you. We get it, we’ve been there. If you are a women we also encourage you to check out Divorce Recovery for Women for helpful information, workshops and meet ups with other women in your life circumstance.