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Divorce Strategies Group

Denise French

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Ten Financial Pitfalls for Women in Divorce

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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.

Schedule a 30 minute complimentary consultation today to discuss your specific situation or call us at 281-505-8177 to discuss your concerns.

Dividing Annuity Assets in Divorce

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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?

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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!

Divorce and Retirement Accounts

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The valuation and division of retirement accounts in divorce is more complex than most divorcing couples expect.  We frequently see people after the fact who wish they had known better before they signed papers to finalize their estate division.  The details are important.  Below are four common items to know about before you sign on the dotted line.

1. Does a retirement account only belong to the person whose name is on the title?

What if only one spouse worked for most of the marriage while the other was the primary caretaker for the home and children?  If that’s the case, most of the retirement assets are likely only in one spouse’s name. Despite the titling, these retirement assets acquired during the marriage belong to the community estate and are fully subject to division in a divorce.  It is common for clients who own retirement accounts to believe they are entitled to the entire account since it’s in their name. However, money earned during the marriage is a marital asset and subject to division in a divorce within a community property state like Texas.

In contrast, retirement assets earned prior to the marriage are typically considered separate assets and not subject to division in the divorce. In addition, the growth on those separate assets during the marriage is considered separate property (but not the income, yes, it gets confusing). For an accurate appraisal of what portion of a retirement account is separate versus and what portion is marital, a separate property accounting must be conducted.  The burden of proof is on the person making the separate property claim.  All assets, no matter what the title says, belong to each spouse equally if the asset was acquired during the marriage, except for those assets which were inherited or gifted during the marriage or came from a personal injury suit.

2. How will we be taxed if we divide a retirement account?

You are not necessarily taxed on the division of a retirement account. Taxation happens only if you distribute the retirement account outside of the retirement vehicle.  For example, if your spouse has a large 401(k) and you divide it during the divorce, no problem.  You can move these funds into an IRA for yourself without paying any tax and let it continue to grow tax deferred. The same rules apply if you are dividing an IRA.  You only acquire a tax liability when you redeem the funds from the retirement chassy and put them into your bank account or a non-retirement brokerage account.

3. Which retirement assets are best to keep in a divorce?

Not all retirement assets are equal as far as the IRS is concerned, which means what you get to keep in your pocket differs – sometimes substantially- between different retirement accounts! This is a synopsis of the different types of retirement assets we commonly see with divorcing couples in our office.  We also provide a discussion of liquidity as having liquid, available cash is king in a divorce.

Pension Plans

Pension plans typically rate lowest on the list of assets to obtain because those funds are not liquid today (unless you are at retirement age). Further, each plan has its own rules surrounding availability of the pension funds to the ex-spouse. Some funds mandate you wait for your ex-spouse to retire while others will let you retire on your own timeline after you have reached a certain age which can be anywhere from 50 to 65.  Pension plans may also offer a lump sum option at retirement – it just depends on the company or entity offering the plan. There is also the issue of company solvency – will this pension plan even exist when you are retirement age?   It is also important to know if you are entitled to assets if your spouse dies before the pension plan begins – some entities don’t pay you at all if your spouse dies before the payout has started, even with a divorce decree.

It is wise to involve a Certified Divorce Financial Analyst or CDFA in cases with a pension as they can help you understand your options and make those phone calls for or with you.  Know the rules of your potential pension plan before you sign any binding documents

Traditional IRAs

IRA’s typically rank lower on the scale of available, liquid assets because withdrawals are usually taxed at the owner’s highest marginal tax rate and incur a 10 percent penalty until age 59.5 (barring the exceptions of substantially equal periodic payments for those typically 50 and over, death and disability).   There are no divorce exceptions to the penalty as there are in a 401(k) which is why we prefer our clients are awarded the 401(k) assets rather than the IRA assets if there is a choice.

401(k), Profit Sharing Plans and other ERISA-Regulated Plans

ERISA regulated plans (such as 401k’s and Profit Sharing Plans) are one step above the Traditional IRA regarding assets available for liquidity as you can redeem cash from your ex-spouses 401k plan without paying the 10% penalty, but you still must pay taxes.  That is a big savings – especially in larger plans.  You can save thousands in fees by just taking the 401(k) over the IRA if you are in need of cash from the retirement assets.

The down side is a federally mandated 20% withholding on all cash distributions. For example, if you want $80,000 in cash from your ex-spouses 401k, you’ll need to withdrawal $100,000 as 20% ($20,000 in this example) will automatically be forwarded to the IRS.  You are not losing that money – you’d owe it in taxes anyway you are just forced to pre-pay your taxes.  If you do not owe the full 20% at tax time you will receive a refund or if you owe more, they will certainly let you know when you complete your taxes the following year.  The other negative is 401(k)’s can only be awarded via a Qualified Domestic Relations Order or QDRO.  QDRO’s cost an additional fee of $500 – $1,500 and they take time and work to finalize.

ROTH IRAs

ROTH IRA’s are the most advantageous retirement asset for liquidity needs during or after divorce. The principal put into a ROTH IRA can be withdrawn tax and penalty-free at any time for any reason.  The earnings on the ROTH IRA are different.  The earnings can be subject to taxation and the 10% early withdrawal penalty (before age 59.5) but you are able to take all of the principal before touching the earnings.  For example, if you have a ROTH IRA worth $40,000 today which you originally invested 15,000 in; the $15,000 is principal and the other $25,000 is earnings.  In this example, you can redeem the $15,000 with zero penalty and zero taxation while the rest can be left alone to grow.

4. Should you consider the value of retirement accounts after taxes when dividing assets in a divorce?

Many attorneys will “tax effect” retirement plans (discounting the account by the recipient’s marginal or effective tax bracket). Left unchecked, the spouse receiving more of the retirement accounts may benefit (possibly unfairly) in negotiations from this practice.  However, if your spouse is not playing fairly and trying to stick you with all the retirement accounts while they take all the cash, a tax effecting is in order.  Tax effecting can be as simple as taking 20% – 28% off the value of the retirement account and dividing that.  Or, it can be as complex as determining your effective tax rate and considering what assets will actually have to be used and tax effecting just those by the actual amount of tax you will pay this year (and possibly projecting out to the next few years).    By preparing financial projections, a CDFA can assess the amount and timing of the recipient’s anticipated withdrawals and tax liabilities from retirement accounts.

Questions About Divorce and Retirement Accounts? Let us help.  Retirement accounts are complicated, especially in divorce. Understanding tax implications and liquidity are critical in divorce negotiations.  You only have one shot to get this right.  Ensure you are receiving the settlement that’s best for you by having the right people on your team. Contact Divorce Strategies Group for a complimentary 30 minute phone consultation to discuss your specific needs.

Good Things Can Come From Divorce

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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!

Divorce Financial Planning – Top 3 Strategies

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Divorce can really mess with your mind. I know because I’ve been there. It is like my brain was removed from my head and placed beside me for about a year. (It does come back!) The intelligent together woman that I once was turned into an emotional, brain-fogged, unorganized basket case. I tried very hard to keep it together, but I was not at my best. I felt paralyzed and incapable of coherent thought when I very much just wanted to focus and plan for my future with my young child. Divorce financial planning in Texas would have been the solution.

What’s a person to do? First things first.

1. Know the Basic Finances of the Home

What’s your role when it comes to the family finances? Do you handle the bill paying? Are you “in the loop” on all your bank accounts or are you in the dark? What about investment accounts or retirement plans? Do you have any? If you’re in the dark, you need someone to help you turn the lights on – and FAST! This is where a Certified Divorce Financial Analyst or CDFA® practitioner can really help.

Has your spouse blocked you from your financial life?  If so, a CDFA® may help you shed light on the situation.  A good CDFA® can walk through your taxes and identify brokerage and bank accounts.  He or she can also walk through any financial statements you have and help you identify where assets may be hidden.  A Master Analyst in Financial Forensics or MAFF® a different type of professional who can help you forensically trace bank accounts or brokerage accounts to look for hidden assets.  There is help available – you do not have to stay in the dark.  One client brought in a box of papers from years of stuffing them in drawers and closets.  We found 3 rent houses and $100,000 in CD money!

If you and your spouse are cooperative, ask for statements on all your asset accounts and your most recent tax returns so you can find a CDFA® practitioner to help you out with divorce financial planning in Texas and bring you up to speed. A CDFA® professional is specially trained in the financial aspects of divorce and will be your best friend in this process!

post-divorce in Texas

2. Think About Your Future

This part will be hard but start thinking about what the next phase of your life looks like. Unfortunately, this has to happen at the same time that you are grieving what you THOUGHT the next phase was going to look like. But if you allow yourself some space, it can actually be healing and fun. You now have the chance to start over again.

What did you used to dream of doing that got lost while you were married? Is it time to go back to school? Maybe a cool downtown loft condo should replace that huge family home that you had to keep clean. Whatever you dream of, you will need your budget and financial picture top of mind. That way, if your dreams outsize your wallet, you know you have some serious planning to do!

3. Build A Single Identity for Yourself

Often through marriage all the credit cards, mortgages, loans, etc. are in the names of both spouses. All of those accounts will have to be closed or converted. Immediately open a checking and savings account in your own name to begin the process of establishing your own financial identity. Be sure to put some things in place while you’re still married because after the marriage is over, your credit picture may not be nearly as strong. Next, find a good rewards credit card to apply for in your name alone so that you will be assured of having access to credit after the divorce and maybe even during if legal fees are necessary.

These steps may seem small but they are valuable first steps to get you thinking financially and looking out for your future. You can get through this, and a little divorce financial planning in Texas help from a CDFA® friend is a great place to start.