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Denise French

divorce

Common Ways to Hide Assets in Divorce

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Have you ever wondered if the opposing party in a divorce case has actually disclosed all the assets of an estate?  Do you feel like your spouse might hide assets in divorce?  

Common Ways to Hide Assets in Divorce

This article covers creative ways people have hidden assets in divorce and conversely, ways we have found those assets.  We feel like the best way to talk through a divorce is with integrity and dignity without lying about assets.  Often, doing so could backfire on you.  However, if you feel your spouse is lying about money, here are a few places to look.

Excess ATM Cash Withdrawals

Excess cash withdrawals from ATM’s are fairly common.  One spouse will start taking small withdrawals on a regular basis from ATM machines.  Instead of using the cash for legitimate purposes, they stockpile it and forget to mention this as an asset when walking through the estate valuation.  They claim they have spent all the money and have no cash on hand when in reality they have a lot of cash on hand.   We often are able to track exactly how much cash was spent, on average, in normal conditions and then compare that to the months leading up to the divorce and in the divorce months.

Stealing Hard Assets

Some people will literally “hide” assets.   For example, imagine if a couple has a lot of jewelry that’s been accumulated over the years from various sources. Prior to inventorying, one party takes a few select items from the jewelry box and hopes the other party doesn’t notice anything is missing.

This can also be in the form of hiding items in safety deposit boxes whether they be straight issue bonds in coupon form, stocks in issue form.

hide assets in divorce

Another form of stealing cash is having cosmetic surgery or taking an expensive lavish trip soon before requesting the divorce.

Overpaying Debt Instruments & the IRS

One way to having a cushy safety net is by overpaying the IRS.  An unethical spouse can change their W2 withholdings if you are employed by a firm.  Doing this creates an account you know will be refunded when you do your taxes the next year and it lowers your spendable income today for purposes of child support and negotiation.   If you are self-employed your ability to overpay the IRS can be in the form of quarterly payments from company distributions or again, increasing your W2 withholdings if you pay yourself.

If a credit card is overpaid and the credit balance sits for a while, the credit card company will refund the overpayment, usually in the form of a check. The party that overpaid the credit card can then take that check and cash it. To the other party, particularly those who aren’t close to the household finances, it just looks like credit card debt was paid.

hide asset in divorce

Self-Employed Financial Games

Self-employed parties have many ways to attempt to hide income and assets in their business. Income can be hidden by increasing expenses or by paying a large expense that must be done but wasn’t budgeting for a few more years. For example, buying a huge piece of equipment you had originally planned to buy in a few years will lower your income which could lower the value of your business.

Self-employed people can overpay taxes with increases to their W2’s or increase their quarterly payments to the IRS.  Self-employed people can also delay being paid and sit on a large amount of account receivable until after the divorce.

In Texas and many other states, personal goodwill is not a community asset. Games can be played here to try to increase personal interest and personal involvement in business as to decrease the value of the business in the community estate.

If you are considering divorce, it’s important that you have the right professionals involved. A Master Analyst in Financial Forensics ® (MAFF®) and a Certified Divorce Financial Analyst® (CDFA®) has the training to help uncover shady acts like the ones listed above. And here at Divorce Strategies Group, we have both the hearts and minds to help make sure your financial outcomes in divorce leave you feeling confident. It’s all about having the right people on your team. If you are concerned your partner will hide assets in divorce or need some professional divorce help contact us today.

Mid-Life Divorce: 4 Things to Consider

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Divorce comes with financial implications at any age, but a mid-life divorce can be even more complicated.

Most middle-aged couples have a home, retirement accounts, several vehicles, and investments. You may also have debt in the form of credit card bills, car loans, a mortgage, and potentially even student loans, for yourself or your grown children.

Mid-Life Divorce: 4 Things to Consider

If your finances are complicated, it’s likely your divorce will be as well. Consider the following to lessen the impact of your mid-life divorce on your long-term financial situation.

Consider Your Monthly Income

Divorce can wreak havoc on your finances in general, but for women that have relied on their spouse’s income, the damage can be much worse. A 2017 study found that U.S. women in their 60s that went through a divorce have a poverty rate of 27%, significantly higher than any other demographic in that age range (including widows).

Take the time to inventory your monthly income and personal expenses. Consider your most basic short-term needs, including:

  • Housing costs, including utilities
  • Food
  • Personal care
  • Internet
  • Health care
  • Transportation

Above and beyond those short-term needs, you may want to determine your long-term goals.

  • Do you plan to retire at 60? At 65?
  • Will you continue to make contributions to investment or retirement accounts? If so, how much?
  • Do you intend to increase your emergency accounts?

When you have the estimate of your monthly expenses, you’ll know exactly how much income you need and will be able to negotiate spousal support accordingly.

mid-life divorce | investments

Consider Your Retirement Accounts and Assets

The division of retirement accounts and assets is a complicated one that requires special care to minimize tax implications. Private-sector retirement plans, such as a pension or 401(k) will require court approval through a Qualified Domestic Relations Order (QDRO) for the division of those assets.

If your marriage lasted ten years or more, then Social Security should be considered as well. If you remain unmarried, are age 62 or older, and your spouse is entitled to Social Security retirement or disability benefits, then you may be able to receive the greater of 50% of your spouse’s benefits or 100% of your own.  This is not something that will be discussed, usually, in the divorce proceedings, but it is a financial issue that should be addressed when planning for your life after the divorce is over.

Each situation is different, so take the time to discuss your specific needs with a financial professional.

Consider Your Home

Your home comes with memories – raising children, hosting gatherings, and more – and it can also provide a feeling of security. When it comes to mid-life divorce, many spouses allow their emotions to cloud their judgment with regard to keeping the family home. With only one income, maintenance costs, property taxes, and the house payment can quickly exhaust your financial resources, so it’s essential to weigh the costs ahead of time.  If you choose to sell, you’ll need to have a value on the spreadsheet of the house.  You can either agree on a value, use comparable house sales (comps), use tax records for the county or get an appraisal done, which is the most accurate.   When you know how much the home is worth, your divorce financial negotiations will be more accurate from the start.

Divorce and 401k

Consider Your Investments and Additional Property

Property division laws vary from state to state, so you’ll need a lawyer on your team that knows the local laws. Texas is a community property state.  Each county, and even each court, can have a different approach to how the estate is viewed in light of each family’s circumstances.    A just and right division of the estate can mean different things with different family situations and different courts.  It’s important to have an experienced family law attorney who knows your court and your judge.

Financial assets, including stocks, bonds, and cash, can often be divided straightforwardly. Complications tend to arise when stock options, real estate, vacation homes, and collectibles enter the scene and separate appraisals for each of those will likely be necessary. If you own a business, you’ll likely need to have that business valuated and it goes on the community spreadsheet as an asset.

Ideally, the goal is to eliminate joint ownership of all of the marital assets. Get independent valuations from industry professionals to ensure a fair value buyout and to lessen the likelihood of conflict between you and your ex.

Professional Assistance for Mid-Life Divorce

No matter what your financial situation, the process of divorce will impact you emotionally, socially, legally, and financially. Contact Divorce Strategies Group today, and we’ll help you clarify your options, create a plan for transitioning into the next phase of your life, and connect you with the resources you’ll need throughout the process. Protect your future – call us today.

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

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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!

common mistakes in divorce

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.

common mistakes in divorce

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.

man bullying woman

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.

common mistakes in divorce

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.

Dealing with a Divorce: Simple Coping Tools

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When I was walking through the divorce process, I felt a wide range of emotions – everything from sadness to shame to relief to anger and back again.  Sometimes in a matter of minutes.  On my best days, I wasn’t being very kind to myself and on my worst days, I was my own worst enemy.  I definitely didn’t have coping tools for divorce.

When you are facing a divorce, some days are just rough.  Maybe you didn’t sleep well, and you start the day off grumpy and things only get worse from there.  Your kids are upset and it’s difficult to get to school, you spill your coffee in your car or traffic is terrible.  You feel pressure and stress with your full-time job and now you must add another full-time job, your divorce process, to the mix.  It’s a lot to deal with!

When you are already emotional from the changes in your life, every little thing that goes wrong can feel much bigger than it is.  If you’re having a terrible day, stop for a minute, take a deep breath and take some time to be kind to yourself.  You can’t undo the bad things that have already happened, but you can turn around your bad day right now.  Here are simple things you can do to be kind to yourself and stop that rough day in its tracks.

coping tools for divorce

Take a Break

When everything seems to be going wrong, you can stop that negative spiral by taking a break.  Get out of the office if you can, go and do some deep breathing in the park or even look out of the window for a few minutes.  A change of scenery can often work wonders.  Practice some deep breathing and maybe have an herbal tea or a glass of water.  If you have the time, adult coloring books are a great way to calm and focus your mind.  Implement anything that makes you feel better and more in control.

Meditation or Prayer

When I was going through this process I used a lot of spiritual tools – specifically mediation and prayer.  I used these tools often throughout the day and any time I had to deal with a divorce issue or my soon-to-be-ex-spouse.  It was one of the most important tools I had.  In fact, several times when I should have been losing my mind these tools provided a peace that surpasses all understanding – I have no other way to explain it.  Meditation can be as simple as turning your back to your computer at work and breathe deeply while concentrating on your breathing for just two minutes.

coping tools for divorce

Plan Something Nice for Yourself

If your day is going from bad to worse, give yourself something to look forward to.  Plan to do something luxurious and relaxing.  You might take a long bath with the good bath oil, splurge on takeout for dinner, book a weekend away or set up dinner with a friend.  I met with my Divorce Care group weekly on Tuesday nights and then dinner was always after.  This was my weekly solace and something I never missed.  I also met with my girlfriends weekly for lunch – just one of many coping tools for divorce I needed to help get through the process.  Whatever it is for you, put it on the calendar and let nothing change those plans!  You need to take care of you in order to better take care of those who rely on you.

coping tools for divorce

Be Your Own Best Friend when Dealing with a Divorce

Take a moment to consider how you’re talking to yourself.  Are you beating yourself up about your divorce?  Everyone has bad days, you need nurturing, not beating up!

Do you believe the terrible things your former life partner is saying about you?  I can relate to that.  However, once I was on the other side of the divorce I realized very few of the accusations or ugly words he spoke to me were true.  People say crazy things when they are scared and in divorce specifically.  Don’t buy it!! More so, don’t reiterate it in your own head with your own voice.  Getting an outside perspective from a friend or counselor can also be very comforting.

Gratitude and Celebrating the Wins

Sometimes it can feel like an achievement to get through the day at all when you’re dealing with a breakup.  If you’re having a bad day, write down all of your wins, big and small.  Focusing on the positive and being grateful can change your perception.  If you took the time to eat lunch, went for a jog, had a family meal with your children, or walked the dog, you are on a winning streak!  Make it fun and pat yourself on the back for all the checks on your list.  I also created a gratitude journal.  At the end of my divorce, I had more pages than I ever expected of things I was personally grateful for.  I was stronger, I had survived and I was better for it, I was out of a loveless marriage, I was free to start over, I was healthy, and my most memorable – I had the entire closet to myself, etc.

coping tools for divorce

Enlist Help

By embracing these coping tools for divorce you’ll find a happier, healthier you.  If you are struggling with your finances as it relates to your divorce, though, we highly recommend calling in a professional.  Contact Divorce Strategies Group today for help navigating one overwhelming part of divorce – your finances and your financial future.

College Planning for Divorced Parents

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This year marks the first year one of our 5 children march off to college.  Wow!  It happened fast.  This particular child is my stepson.  I am paying 100% of his college costs.  Sound familiar?  Scared of having this happen to you?  While I love him deeply, and am honored to be able to participate in this for him, a little planning prior to our big day would have been helpful 13 years ago during divorce proceedings.  What I am personally facing is very common with others who pass through our office.  Many, unfortunately, are not prepared to pay for these costs.

5 FAFSA Tips for Divorced Parents

make it on your own after divorce

Applying for and paying for college can be very stressful for many parents.  Co-parenting is hard enough without the stress of supporting your kids through the college application process.  Often, divorce settlements don’t detail how college expenses will be handled.  In fact, it’s outside of the jurisdiction of many states’ domestic relations courts.  If college expenses are detailed in the agreement, they’re often vague with limited concern around the details adding additional stress.  Enter the FAFSA.  FAFSA stands for Free Application for Federal Student Aid.  The FAFSA is used to determine federal financial aids such as grants, work-study, and student loans.  About two-thirds of students attending college are eligible for some form of aid.

The key to maximizing the financial aid your child will get is understanding and completing the FAFSA correctly.  Providing too much information is actually the most common mistake that divorced parents make.  If you report the income for too many adults, you could seriously hurt your chances of getting financial aid for your child.

collaborate together

1. Collaborate with your ex

Work together with your ex to maximize the financial aid opportunities for your child.  I know that co-parenting is hard.  I co-parent my kids with my ex and I really do understand the ups and downs of this situation.  If you can really set your differences aside and put your kids’ education first, there are opportunities to work together to maximize the financial aid available to your child.

If you are not able to do this on your own, consider working with a mediator to work through how you will maximize your child’s opportunities for financial aid.

2. How the FAFSA identifies the custodial parent

The custodial parent for the FAFSA does not have to do with who has legal custody.  For the FAFSA, the custodial parent refers to the parent who has the child for more than 50% of the time.  If a child lives with each parent an equal amount of time, then the parent who provided more financial support over the last 12 months should be identified as the custodial parent.  If the custodial parent is remarried, the income of the stepparent is also reported on the FAFSA.  Below is an infographic that the U.S. Department of Education provides to help you to determine who should be listed as the parent on the FAFSA form.

3. Remember the custodial parent criteria when creating your parenting schedule

Consider college financial aid when making your parenting schedule, particularly if there is a substantial difference in income between the two parents.  If the child is with the lower-income parent more than 50% of the time then the child will report the lower-income parent as the custodial parent. This is a common occurrence since the higher income parent tends to work more than the lower-income spouse.  This could decrease the expected family contribution and increase how much aid they’ll get.  It’s worth considering as you prepare your parenting schedule.

graduation diplomas

4. Get prepared ahead of time

The FAFSA will ask for the date of your divorce and other basic information such as the child’s social security number, parents’ social security numbers, etc.  Having tax returns, bank statements, and investment account statements handy will make completing the application easier.

Don’t wait, either.  While the deadline for filing isn’t until June 30, you can complete the process as early as October 1.  Keep in mind that the earlier you file, the more likely it will be that your child will receive grants and scholarships, as those tend to be allocated early on.

5. For the recently divorced

If you are recently divorced, take the time to contact the school directly.  If your change in marital status happened after your FAFSA was filed, there may be additional aid available to you.  You never know unless you ask.

Contact a Professional

For more information about FAFSA tips for divorced parents, or to get started with your application, visit https://studentaid.gov/h/apply-for-aid/fafsa.

If you are struggling to navigate co-parenting your children when it comes to your finances, it might be time to reach out to a professional for guidance. Contact Divorce Strategies Group for a consultation today.

CDFA™ Professionals can help to create financial settlements that work – both now and in the future

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A Certified Divorce Financial Analyst™ (CDFA™) professional can help you address the financial issues of divorce with reports that can help achieve settlements that work today – and in the future. If you are considering hiring CDFA professionals, read on for more information about how he or she can help you.

A CDFA™ professional can:

• Complete the detailed financial work for the client and the client’s attorney, making case preparation and settlement easier
• Provide in-depth analysis of the short- and long-term financial effects of a proposed settlement
• Work as a consultant or expert witness

woman with people in background

About CDFA Professionals

A Certified Divorce Financial Analyst™ (CDFA™) professional has:
• Graduated from the Institute for Divorce Financial Analysts™
• Extensive financial expertise in the fields of financial services, accounting, or law
• Received specialized training in the financial issues of divorce
• Fulfilled continuing education requirements

Founded in 1993, the Institute for Divorce Financial Analysts™ (IDFA™) is the most established and recognized designation in financial planning for divorce. In order to become a CDFA professional, a candidate must successfully complete a series of exams based on a self-study course offered by the Institute, be in good standing with his or her firm or broker/dealer and any governmental regulatory agencies, and complete 20 hours of continuing education courses every two years.

How a CDFA Professional help a Family Law Attorney?

CDFA professionals help lawyers and their divorcing clients address the special financial issues of divorce with data that can help achieve equitable settlements. A CDFA pro is trained to:
• Produce powerful case exhibits in the form of spreadsheets and graphs
• Give lawyers professional support to make sure they’ve covered all the financial “bases”
• Provide litigation support to divorce lawyers
• Serve as a financial expert on divorce cases
• Analyze the financial implications of different divorce settlement proposals
• Create a rock-solid personal financial analysis for the client
• Make sure the client understands the short-term and long-term financial impact of different settlement proposals

How a CDFA Professional can help the divorcing client

• Separate vs. Marital property
• Valuing and dividing property
• Debt, credit, and bankruptcy
• Retirement and pensions
• Spousal and child support
• Options for the Matrimonial Home
• Tax problems and solutions

The Experts Talk about CDFA Professionals

“However the divorce [financial analyst] enters the process, the participation of a financial specialist can benefit both clients and lawyers, according to Sandra Morris [former president of the American Academy of Matrimonial Lawyers]. While the [CDFA] wades through the financial morass of a divorce, the attorney is freed up to focus on legal issues.”
– Lawyers Weekly

“The professions of divorce financial analysis and matrimonial law have a long, prosperous future together. The skilled CDFA brings rationality to an irrational situation.”
– Frederic J. Seigel, Esq.
Partner, Fitzmaurice & Seigel, CT

“CDFAs can provide invaluable information that allows the court to arrive at a fair, equitable, and just resolution – not just at the moment of trial, but down the road as well.”
– Honorable Kathleen M. McCarthy, JD
Family Court Division Judge, MI

“[CDFAs] watch out for tax snafus, help clients obtain health insurance after a split, and demystify tough-to-value private-equity or hedge-fund investments.”
– The Wall Street Journal

Local Financial Support for Your Divorce Needs

Denise French - Local Financial Support for your Divorce NeedsWe at Divorce Strategies Group are here to help you with your divorce case whether you are the client or the attorney. We not only have the professional experience to expertly help you navigate through the divorce financial and tax maze, but we also have the personal experience of walking through divorce ourselves with a complex financial estate.

Contact us for more information and resources on divorce, and to schedule your consultation.