co-parenting

Health Plans – Open Enrollment & Divorce

October 18, 2020 By Denise French, CVA, MAFF, CDFA, CRPC

If you work for a company which offers health insurance you probably already know about open enrollment. Updates you choose during this time period will determine your health, dental and vision insurance for the upcoming year and your tax savings in deductible plans like Health Savings Accounts (HSA’s). While the timing of open enrollment can vary with different employers, open enrollment is generally the period between November and mid-December. During this time you are able to make changes to your health insurance plans without a major life change. You can choose to renew your participation in your company’s current insurance plans, switch to a different one, and make changes to participants on your plan for the upcoming year. Even though it can be tempting to select the plan you had last year so you don’t have to put in much effort, I’d encourage you to pause for a moment and consider if that’s really the best option from a benefits, tax, and budgetary viewpoint.

It Is important to remember if you are still in the midst of divorce, you will likely need to add your current spouse on your health coverage during open enrollment elections for the new year. If you are under temporary orders (which you likely are) do NOT remove your current spouse from your health coverage right now for the next year. You can remove your spouse from your health insurance coverage in the new year after your divorce is final as that will count as a major life change.

While you will keep your spouse on your current coverage, it’s important to look at your coverage options and make sure you have the right one for you. After you divorce is final in the new year (or the end of this year), you will remove your spouse from your coverage and this will be your plan for the rest of the year. Are the deductibles proper for you? Are you eligible and participating in the HSA? Is this the right plan considering minor children you will have on your plan? This and other issues are important to consider.

1. Evaluate Life Changes

The amount of coverage you need plays a big role here, especially if you previously covered dependents and/or your spouse and no longer need to or vice versa. Some other life changes in addition to divorce could make a difference in the plan you choose during open enrollment include births, deaths and medical issues.

2. Review Beneficiaries

Open enrollment time is a good opportunity to revisit the beneficiaries on your accounts. For example, if you have group life insurance, you may still have your ex-spouse as the beneficiary. Once the divorce is final you will need to remove your ex-spouse from the beneficiary designation unless you want your ex-spouse to be the beneficiary, and in that case you will need to re-assign that person as the beneficiary after the divorce is final. Your ex-spouse will be skipped over on a life insurance policy payout unless they are specifically designated in a divorce decree and/or you rename them as beneficiary on the policy after the divorce is final.

We encourage you NOT to list minor children as beneficiaries on an anything. Minor’s cannot receive payouts without a court appearance and a guardian. Guess who will be the guardian for your children if you pass while they are minors? It will be your co-parent or ex-spouse unless they predecease you. If you want to leave the proceeds to your children you will want to create a testamentary trust (included in your will usually and what I have personally) or a revocable or an irrevocable trust. All of these involve a trip to an estate planning attorneys office which we highly recommend after the divorce is final.

For now, while the divorce is still pending, list your spouse as beneficiary. You are likely under temporary orders to do so. After the divorce is final it’s time to do some estate planning and likely change the beneficiary.

3. Understand the Benefits of the Plans You Select versus Your Needs

This is a great time to make sure you’re getting the coverage you need and you’re maxing out the tax savings from it. Take the time to review what’s included in your plans, any tax credits or benefits you’re eligible for, and options outside of your employer-provided plans. That way, you know you’ll actually use everything you’re paying for. The reality is, it comes down to saving money and being tax-efficient, especially with an HSA.

Another big issue we see with divorcing couples is the deductible and the corresponding out of pocket costs. You may have a fight on your hands (and undue stress from such a fight for you and your children) if your spouse is living paycheck to paycheck and you opt for a plan with a huge deductible. Paying hundreds of dollars to meet the deductible for a simple sick visit to the pediatrician may not go well for an ex-spouse on a limited income or at least be an issue to address while you are in divorce proceedings. Conversely, if there is a large surgery to pay for or a medical issue to be dealt with which is known for the upcoming year, it’s wise to perform a cost analysis on how much it will cost you to have this covered at a higher percent even with a large deductible versus a lower percent of coverage with a lower deductible.

Medical costs can be an enormous part of the annual budget. The good news is you have coverage and choices, the bad news is sometimes those choices, especially in the midst of a divorce, can be overwhelming. To make sure you’re getting the biggest benefit, tax savings, and coverage you and your family actually need, talk to a trained consultant who can guide you through the process.

If you’d like me to help you with health care selections during open enrollment season or any other financial related issues, I’ve opened up more Divorce Strategy Sessions on my calendar in late October and early November for those who are not current clients and want some extra help with financial related issues. In my Divorce Strategy Sessions, we will discuss your needs, your options and your budget so you can make the best choices for you and your future!! Click here to learn more about Strategy Calls and schedule yours today!

Dividing Annuity Assets in Divorce

September 29, 2020 By Denise French, CVA, MAFF, CDFA, CRPC

Dividing community property, or property jointly owned by a married couple, can often be a complicated process, with your financial options dictated by potential tax implications. While some things may be easy to divide, others are not. Some belongings are sentimental, while others — such as annuities — involve complicated financial calculations. Annuities not only involve moving ownership from one person to the other or joint title to single title, they often also involve moving or potentially deleting critical living benefits, guarantees and/or death benefits as well as surrender penalties on top of potential tax liabilities. That is a lot! Annuities in divorce are complex to say the least. We will attempt to unravel the complexities of annuities as they relate to divorce or at least guide you on what questions to ask.

Annuity Phase

While there are multiple types of annuities (fixed, fixed index, variable, immediate and deferred) all types of annuities are typically in either the accumulation phase or the distribution phase. The different phases will determine how value and divide the annuity in a divorce situation.

Accumulation Phase

If an annuity is in the accumulation phase, it is growing. The annuity may be growing by a simple fixed rate – aka a fixed annuity or by a variety of factors in the fixed index or variable space. The key take-away is there is only growth in this phase. Income has not yet started. This is a critical factor in divorce negotiations. In the accumulation phase the annuity can have three main parts – the actual cash value, the guaranteed benefit amount and the death benefit.

Cash Value

This is the actual cash value. This is real money and should be the value on the marital inventory. This value may have a surrender charge affiliated with it which should also be reflected on the marital inventory. If you do not see a surrender charge on the statement, it is wise to call the carrier and confirm no surrender fee exists. Also, if the contract is still under surrender charge penalties, ask the carrier if they will waive the surrender charge in the case of a divorce where the account is divided between the spouses. We have found quite often they do not waive any fees even though the division is pursuant to a divorce.

Guaranteed Value or Living Benefit Amount

In the accumulation phase, this is the living benefit amount. Many contracts offer a certain amount of guaranteed growth for future income. For example, some annuities may guarantee 7% growth, compounded annually with possibly even a high-water mark (meaning the annuity will capture the highest day of market gains in the annuity contract that year plus add the 7% guaranteed growth on top of this value). Sound too good to be true? What is the catch? This amount is not real money – it cannot be withdrawal in a lump sum. It is the value for which a future income stream is derived. In our same example, let’s say the contract grows by 7% guaranteed compounded annually, and when the client is age 65 a 5% income stream can be taken, guaranteed for life off the 7% compounded number. (In some cases, the income stream will also double for long term care needs for a certain amount of time.) In divorce, the guaranteed amount is often erased if the annuity is divided. This can cost the overall estate hundreds of thousands of dollars.

Know if there is a living benefit and if so, what happens if the annuity is divided between the spouses? The living benefit number is often quite higher than the actual account value, but this is not the number to be listed on the marital inventory. It is a phantom number used to derive a set amount of income at a future date. However, because there is an account value it is the actual cash value which is listed on the estate spreadsheet. The annuities are designed to deplete the cash value over time when the income begins if you live long enough, so this number is not listed on the inventory when the annuity is still in the accumulation phase.

Death Benefit

Sometimes annuities have stand alone death benefits or death benefits attached to the living benefits. This means a certain amount is guaranteed at the death of the annuitant. In some cases, the death benefit is the reason an annuity is sold as life insurance was not an option or was too expensive. It is important to know if an enhanced death benefit exists and if so, know this and other relevant facts. Who is the annuitant? What is the death benefit exactly? What happens in the case of divorce if the contract is divided or moved to the non-annuitant spouse? Now that the couples are divorcing, is the death benefit still relevant or should other options be considered? The death benefit should be on the latest annuity contract statement. However, it is not listed as an asset on the marital inventory as it will only be pain in the event of the annuitant’s death.

Income Phase

If an annuity is in the income phase, it is in distribution. The distribution may be a systematic withdrawal stream on a guaranteed basis, a systematic withdrawal on a non-guaranteed basis or annuitized. This set of facts is vital to know in the case of a divorce.

Systematic Withdrawal – Guaranteed Basis

This should be the most common situation with an annuity. The income from the living benefit has been triggered. In the example above, the 5% income stream at age 65 has begun off the 7% compounded annual growth the annuity provided. If this is the case, the annuity may not be divisible without significantly hurting the amount of income the annuity provides on a guaranteed basis. Contact the carrier to determine how, if at all, the annuity can be divided, and the income stream kept intact. The income stream however may be divisible. The division of this works much like a pension on the estate spreadsheet where a net present value of the future income stream is calculated, and this is the number on the marital inventory.

You can also forego a net present value calculation of the income on the marital inventory and split the income 50/50. We recommend contacting the annuity carrier to determine if division can occur at the carrier level so there is little, if any, interaction between the parties. You will also want to ask the annuity carrier what happens if the annuitant dies. The wife may not receive any payout if the annuity is based only on the husband’s life and he dies or vice versa. Some payouts are based on joint life and some are on single life which were determined at the income stream’s inception. It is vital to understand what happens in the event of one spouse’s death.

Systematic Withdrawal – Nonguaranteed Basis

If this is the case, you can likely divide this annuity. It may not be attached to a living benefit guarantee. This is the least likely to exists and rarely seen, but it is a possibility. It is important to call the carrier and determine your options if this set of facts exists with your annuity. The issue will be mainly surrender charge penalties when this annuity is divided if it is still in the penalty period. We would also ask if there are any issues with the annuitant – is it joint annuitant or single annuitant and will this be possible if you change to the spouse who wants the asset or if you divide the contract in half.

Annuitized

If this is the case, the annuity cash value no longer exists – it is only an income stream. Older contracts typically have this. Most newer contracts do not require annuitization because the contract corpus is gone – it belongs to the annuity company. The valuation of this is now just like the valuation of a pension plan. The carrier may have the income based on joint life or single life. They may divide the income in half but when one spouse dies, the income stream may cease for all. The carrier must be contacted to determine what happens at the death of the owner and/or the death of the annuitant. These facts are important to know as they relate to the income stream after one spouse dies. If you do not want to divide the income, one can calculate a Net Present Value of the future income stream as one would a pension and this number should be indicated on the marital inventory as an asset to be offset with other assets.

Owners and Annuitants

Aside from the issues we stated above in valuing and dividing annuities in the accumulation and the income phases, the named owner and named annuitant could alter the course of the annuity division. It is vital to know who the owner is and who the annuitant is (they may not be the same). These set of facts may determine what happens to the contract when this is divided to the non-owner and/or non-annuitant. Some contracts are jointly owned the with joint annuitants or jointly owned with single annuitants – and each carrier can handle dividing these differently. A simple call to the carrier and a discussion with a member of client services advanced team should straighten out these issues, we just want you to know what to ask for.

Summary

We highly encourage you to reach out to a professional who not only understands annuities, but also understands divorce laws in your area. A Certified Divorce Financial Analyst is the perfect person to have on your team if you or your spouse own an annuity and you are walking through a divorce. We at Divorce Strategies Group understand annuities and divorce finance and can help as well. Contact us for your 30-minute free consultation today.

What does Divorce Mediation Involve?

September 15, 2020 By Denise French, CVA, MAFF, CDFA, CRPC

In Texas, divorce mediation is a confidential process where a neutral third person (the mediator) helps divorcing couples reach a divorce 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.

Denise French founded Divorce Strategies Group, LLC in 2014 and since that time we have continuously guided clients through the divorce and mediation process. We believe mediation is an excellent tool for divorcing couples, especially when there are contentious issues. Our goal is to help you reach a satisfactory agreement with your spouse, without having to endure a lengthy, costly trial. Save time! Save money! Get on with your life.

How does Mediation work in a Texas Divorce?

The goal of mediation is to work through all the issues of your estate and the issues with minor children. An attempt at mediation is strongly recommended and often even required in many Texas counties. In mediation, you will most likely be in separate rooms while your mediator(s) walk in between the rooms. Sometimes, the parties will be in the same room, if they wish to be and it is productive. Without minor children, expect to mediate for a half day. When minor children’s issues are involved, expect to spend an entire day in mediation. At the end of mediation if agreements have been reached a binding, legal document called a Mediated Settlement Agreement or MSA will be signed by everyone. This document is irrevocable and binds your agreements legally. The fight is, in essence, over at this point which typically brings much peace and relief. The MSA is also a tool used to push your agreements through the court system as a judge cannot typically overturn a property drafted MSA.

After the MSA is completed a divorce decree will be drafted by an attorney which reflects the agreements you made in mediation. The divorce decree (which you will review and also need to sign) along with the MSA are presented to the judge in court (or remotely due to COVID-19) and used to finalize your divorce. The mediation document is usually 6 – 10 pages long while your actual divorce decree is 30 – 50 pages long.

Why Should I Use Mediation to Settle our Divorce Conflict?

Mediation is flexible – While we have a process, we acknowledge every family and every divorce is different.
Mediation is future oriented – We are going to focus on where you are headed, not where you have been. Everyone in divorce has some type of pain or fear. We understand and we are happy to listen and help you heal. However, in mediation we will focus on the future.
Mediation works – Mediation has a high success rate, especially when both spouses are open to compromise.
Your information is protected – Mediation is confidential.
You and your spouse are in control of the outcome – Your future in not the hands of a judge hearing only a tiny fraction of your life story.

What sets our firm apart?

The founder of Divorce Strategies Group, LLC, Denise French, has been divorced herself and understands what you are going through! Her divorce was costly and long. Sadly, it was also damaging to her family, her finances and her children. She strives to help litigants avoid the heartache her family endured. This is personal for her. Denise is not a lawyer. She is a financial expert in litigation and fully understands divorce finance in Texas.

Denise works alongside several family law attorney mediators. These mediators, along with Denise, will walk you through every aspect of your child issues and your financial issues to help you achieve a win-win solution for your family. Our partner attorney mediators are Denise Khoury of Guajardo, Khoury Family Law and Manny Caiati of Caiati Law & Mediation.

Denise is a Credentialed Advanced Mediator through the Texas Mediator Credentialing Association with hundreds of cases both as a mediator and as a financial expert in mediation.

The decisions you make in mediation will have lasting, lifelong ramifications for your children and/or your lifestyle and financial wellbeing. We have a proven, 7 step process which involves the help of a financial expert and a family lawyer – both of whom are also mediators. Together, this is a place where you can work through all the child custody issues as well as the financial issues without the fight in court and with proper guidance.

Contact Divorce Strategies Group today!

Before you contact a divorce lawyer, call us. Need more information about divorce and mediation? We invite you to contact our office for a complimentary consultation. We are here to help you in every way possible!

Good Things Can Come From Divorce

August 10, 2020 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

Let’s face it. Change is tough for many people and divorce changes just about every facet of your life. Divorce can often test one’s ability to handle change to an extreme. Some people struggle more than others with change. They fight it, avoid it, fear it, and sometimes feel guilty about it. These notions would make anyone want to keep things as normalized as possible. One would think only adrenaline junkies and dysfunctional people would want to disrupt what could be a perfectly normal situation. However, change can be very positive and powerful, especially if you have been in an unhappy or abusive marriage. Here are five truths in my life I’ve experienced with change. Hopefully this will help readers cope with their own life changes.

1. Change is inevitable

While divorce may not be inevitable, relationships will evolve. Whether you cling to what you have or long for something more, change is unavoidable. Nothing can or will stay the same. You have power when it comes to change. Your actions or reactions to change will determine how positive or negative the change is. Get comfortable with the notion of change as part of the evolution of life and stop resisting.

My divorce meant not only losing a spouse, but losing his entire family, the life I had envisioned and dreams I had of being a stay at home mom. Oddly, I have a relationship with my ex-spouses family today. It’s different than it was, but it’s good. I also had the chance to be a “stay at home” mom for a year, and I found I really didn’t like it. I love to work and I’m a better mom because of it. I own two businesses today which I never would have had the chance to own if I had stayed in my marriage – he would not have given me the freedom to explore these opportunities. What was the absolutely worst thing in 2007 is a gift today.

2. Change helps your brain stay healthy

Science suggest our brains need new and varied problems to work on. When our minds aren’t working out problems, solving mysteries, or figuring things out we can become weak. Change is one of the best ways to keep our brains healthy. This means our lifespan will be healthier, and our mind will not be as susceptible to diseases like dementia. It’s good for your brain to embrace the change in your life as a puzzle you can solve.

I certainly fought the divorce in the beginning, and I went through the stages of grief for at least a year if not longer. No doubt, there was a grieving process to walk through. However, my divorce also brought about new changes which were fun and unexpected, like meeting new friends and having a fun, loving social environment. I was also able to thrive with my career after the divorce which meant learning a lot of new things and experiencing new challenges. When I was no longer subject to emotional abuse I was able to really thrive and grow.

3. Change creates maturity

Sometimes change comes with a price tag. Sometimes change comes with a penalty. Sometimes change requires risk, and sometimes change is forced on us. No matter how change occurs, it causes us to grow. From learning we are tougher than we realized and having to do some difficult things – change creates maturity.

When my divorce was over I made a list of gifts. To my suprise, I had three pages of small, single spaced gifts. Many of them had to do with personal strength and fortitude. I’m so much stronger today. While I certainly would not have chosen this path voluntarily, I’m so grateful today for it.

4. Change teaches you to overcome fear and anxiety

Whether stepping out towards change in doubt or being pushed into the unknown without your consent, change can be scary. The devil we know is easier to manage than the one we don’t. Once the fears are faced, they are often scarier in theory than reality. Change teaches you to overcome fear and anxiety as you learn new coping skills or how to talk yourself through fear.

I was a single mom of a 2 year old child when my divorce was final – that is big change. It was scary. Looking back I’m convinced there is no stronger force than a parent protecting their child. Being a single mom of a young child drove me to bigger and better things with my career. It also lead me to be a better mom and person. I no longer fear financial insecurity (for the most part). I no longer fear being alone. I no longer fear many things – all because of what I went through.

5. Change gives you choices

Once the spirit of change is validated and embraced, change can become part of your normal routine. If you choose something and don’t like it, that isn’t the end of the line. Change things again! From changing your coffee order to the brand of cereal your family eats this week, change can be fun. From picking a new wall color to a new genre of book to read, change can be exciting. From changing where you volunteer your time or which organization you donate to, change can matter to more people.

When my divorce was final I made big changes to my house – I repainted rooms, moved furniture around, rearranged the cabinets and made changes to the yard. These small changes made a big difference. Small things like which cabinet your plates are in can help facilitate change in your head and heart which can give you courage for more change. In my first marriage I really wanted multiple children. As a child I was much younger than my siblings and as a result raised as an only child. I did not like it. I decided very young I would have no children or multiple children – but not an only child! Even though my first husband and I had decided on two or three children when we married, after our first (and only) child was born he decided he didn’t want any more. Well, guess what. When I remarried it was to someone with three young children, and now we have five!! Talk about an evolution of change. It is a beautiful blended crazy mess which this extrovert absolutely loves.

There are many truths about change – some scary and some not so much. Embrace the concept of change, and it will lead to enjoying the realities of change. We at Divorce Strategies Group are here to help you navigate changes from married to single. Schedule a strategy session or call us at 281-210-0057 to schedule your first mediation session today. No matter what your situation we strive to help our clients walk through divorce with confidence, strength and courage!

Lets Just Live Together

February 2, 2020 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

We have 5 children in our blended family and now the first of them is about to hit his 20’s and looking for Mrs. Right, I’m concerned!!! Millennials and Generation Z young adults could be the first generations of children-of-divorce. By 1983, all but 2 states had adopted no-fault divorce laws and over the next decades, the divorce rate rose to our now norm of about 50%. That resulted in many of those kids watching their parents’ divorce and suffering the emotional consequences that often accompany that. When you really consider the early years, there were few resources available to couples and families on how to go through the process in the most humane way. But let’s face it, even with the resources today, there are still plenty of ugly divorce tales out there.

So, for a lot of these kids, as they grow past their 20’s and into their 30’s, a very interesting trend is persisting. The divorce rate, the number of divorces per marriages, continues to rise but the actual number of divorces each year is dropping steadily. Why is this? Because young people are not getting married! They are choosing instead to be in serially monogamous, long-term relationships, often including children and joint home purchases, but forgoing the tradition of a recognized marriage. I understand. They don’t want to go through what their parents went through so the heck with marriage! However, the result of this when life doesn’t go as planned can be disastrous. No burden of marriage also means no protections of marriage.

Consider this: Josh and Beth have been together 4 years and decide to have children. They agree that Beth will stay home and care for the kids while Josh finishes his degree and works nights to support the family. Once he’s done and gainfully employed, the kids will be a little older and Beth will then go back to school and finish her degree.

Well, life happens, and three years into this fabulous plan, Josh is about to graduate and drops the bombshell on Beth that he’s been having an affair with a fellow student. He’s in love and just can’t go on like this. He’ll be a good dad to their children but he’s leaving her. (Didn’t see it coming, did you?) Oh, and by the way, last year they bought a home but since Beth had no income, they didn’t want her low credit score to drag down their interest rate, so the house and mortgage are in Josh’s name.

So, what’s Beth entitled to? She’s like entitled to child support. The house was purchased by Josh and now that Josh is about to finish school and have a great job he can move on with his life in house. But they had plans! They had an agreement and she sacrificed her education to pay for his! Too bad. Had they been married, she could have been entitled to half the equity in the home, possible reimbursement for half of his education expenses and a portion of anything they acquired during the marriage. But boy, isn’t she lucky that she doesn’t have to go through a divorce? Josh kicked her out a week later and she and the kids had to move home with her parents.

Now, Texas does recognize common law marriage, but you will likely need an attorney to determine if you are married or not. What does that mean for Josh and Beth? It means Beth hires an attorney to prove they were married while Josh hires an attorney to prove they were not – after they fight about being married or not they then go on to fight over the house, the debt, the kids and anything else they own. What does that sound like? It sounds like the litigated divorce the parties set out to avoid in the beginning by not legally saying “I Do”.

This is SO REAL!! We highly encourage young people who wish to cohabitate take the time to visit an attorney to walk through the legal ramifications of this prior to moving in together. A simple Cohabitation Agreement can change many things. There are free ones available all over the internet or you can visit a family law attorney for more specific advice pertaining to your set of facts. Never move in with someone without one! It could end up saving you your entire financial life.

Advice for Divorcing Men: Common Mistakes in Divorce and How To Avoid Them

September 16, 2019 By Denise French, CVA, MAFF, CDFA, CRPC Leave a Comment

What’s a man to do? You’ve decided to divorce and now you are finding that there are multitudes of services that cater to helping women during a divorce. Granted, we still live in a society where the more-likely scenario is that the husband has handled the finances during the marriage and the wife needs a little more hand-holding. But this is not always the case and men can struggle to find the resources they need.

Even if you have handled your family finances for the entire marriage, you still need to be sure you understand your financial options as well as your legal ones. With the help of the right financial expert, you’ll find there are still some helpful tax laws that can make a creative and amicable settlement very appealing. The following are some common mistakes in divorce to avoid that, in my experience, has saved lots of money for my clients!

Mistake #1: Thinking that the assets are all yours because she didn’t work.

Oh, this is so hard!! You have fought rush hour traffic, dealt with stressful deadlines, clients and bosses. You’ve hired and fired people. You may have enabled your wife to stay at home and raise your children (and maybe play tennis with her friends). You have contributed a lot!! However, and this is hard, it’s not all your money. Texas is a community property state which means that half of every dollar that enters the house via income during the marriage belongs to you and half belongs to her – no matter if it went into the house, the bank, the 401(k) or any other asset. It’s a marital property issue. Even if you begged your wife to get an outside job for years and years and years and she just refused. Grab a beer with your buddies, bark about it (I understand) but in the end, it is what it is. The more you fight that the more you are going to waste money.

Mistake #2: Making promises too soon.

One of the most common mistakes in divorce is making promises too soon. I see this so often. DO NOT MAKE PROMISES BEFORE YOU KNOW THE FACTS!! She will hold you to them until her last dying breath even if they are unreasonable, unjust and even unattainable. Do not tell her you will give her anything until you know the law, your rights, her rights and your living arrangements/budget post-divorce. Do not, out of guilt, tell her you will financially take care of her for the rest of her life and make sure she is okay because she will remember that, and it will be brought up again and again. You are also hindering your wife more than helping her by promising things you cannot or will not keep. If you have children, you are going to co-parent for the rest of your lives. Don’t start that post-divorce parenting relationship by promising things you cannot or will not deliver. It hurts her and it hurts you. Don’t do it.

Mistake #3: Refusing to give up retirement accounts.

A lot of times, men get emotionally attached to pensions and retirement plans and will negotiate a settlement that lets them keep those assets. I understand it is a reward you’ve earned for a lifetime of hard work. But remember, both pensions and retirement assets are taxable income when you receive them. If you are earning significantly more money than your spouse for most of your life, chances are you will always be in a higher tax bracket than her. Take advantage of this fact and give her the ENTIRE settlement in retirement assets adjusted for HER tax rate instead of yours. This strategy has saved couples that I work with tens of thousands of dollars in taxes and they get to share in the benefit.

Mistake #4: Being a bully.

Our society has come a long way on how we regard bullying. Even with that knowledge, fear can show up in the negotiation process as anger and I see lots of men that make the mistake of thinking that being angry will strengthen their case. Gentlemen, it’s just a bad, bad idea. You’re both scared. Make sure that you work with a CDFA® practitioner, or Certified Divorce Financial Analyst® practitioner that will incorporate future financial planning into your settlement negotiations and everyone’s fears can be addressed fairly.

Mistake #5: Not asking for help.

The last tip I have for you is to realize that you don’t know what you don’t know. Men are often motivated by saving money and will attempt to have a do-it-yourself divorce where they draw up their own paperwork. Bad, bad, bad idea. There are so many intricacies, both financial and legal, to the divorce process that you will save thousands of dollars by making sure that you cover all the bases the first time. At the very least, consult a professional to be sure your decree is enforceable.

At Divorce Strategies Group, we want to help EVERYONE in the divorce process to have a kinder, gentler, much more affordable process. Let us help you avoid those common mistakes in divorce. Book a strategy session to learn your next best steps.