The following blog was provided by Joyce Fine, PhD, Licensed Clinical Psychologist, Certified Divorce Coach, Collaborative Divorce Facilitator. Dr Fine specializes in psychotherapy with adults, couples, and families, provides psychological evaluations, and works as a coach with individuals and couples deciding whether or not to divorce or those going through divorce to help them make the best decisions possible for all family members.
A Changing Family
I recently met with a couple who wanted recommendations for how to talk with their two young children about their upcoming separation, ideas about setting up their parenting schedule once they separated, and support in moving forward with their separation.
During our third meeting, the wife, whom I will call Katy (no real names are used herein) was very frustrated. She was ready to separate. Her husband, whom I will call Alex, was not. He had hoped they would be able to work out their marital differences. Alex needed more time to digest the reality that Katy had made up her mind and her decision was set.
Ultimately, they were both attached to their home. It represented the foundation of their family and the emotional stability it had offered them. Neither wanted to let it go in the face of the instability and colossal transition they were about to step into, or to be the one to set up a new place with their children, since they both thought that the children would like a new place less, that the children would be less comfortable in a new place, etc.
Many divorcing moms feel that it is their right as the mother of their children to stay in the marital home and a lot of divorcing dads agree to that precedent. In Alex and Katy’s case, Katy was set on leaving the marriage and Alex did not want her to go. In asking him to leave their home, she was asking him to do something that he felt was completely against his own self-interest while their crumbling marriage was already shattering his identity, his hopes for their family’s future, and taking him in a direction that he deeply did not want to go.
Their options
We processed why Katy felt that Alex ought to be the one to move out. The more we talked about it, and came up with “atypical” options, she was able to understand the benefits of her moving from the home:
- She could set up a place free of their marital disappointments.
- She would be leaving Alex’s imprint behind.
- Moving out might enable her to start a new life more freely and fully.
Alex and Katy came in for their next appointment two weeks later. By then, she had signed a lease for an apartment and was set to move in a few days. While Alex was still heartbroken and angry, he was relieved that the discussion of him moving out was over and that he would be able to stay in their home. Her moving out also appeared to enable him to negotiate future decisions with less agitation and sense of powerlessness.
Often, divorcing parties are driven by fear and anger in ways that obscure their ability to think openly, clearly, and flexibly, and they reach toward “common” ways that they have heard divorces are facilitated. This can keep them entrenched in defensive thinking that interferes with decision-making that is best for them and their family. Working with couples to come to the other side of defensive or frightened thinking is critical to their families’ well-being and opens pathways to collaborative movement forward.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.
Dependency Exemptions & Child Tax Credits: We Get Why You’re Confused
/in Divorce Financial Planning /by Sandi GumesonEvery year Wellspring Divorce Advisors receives its fair share of questions around tax time with good reason – it’s a confusing time for many.
With the 2018 implementation of the Tax Cuts & Jobs Act, we’re expecting more than our usual number of questions. That’s why we weren’t surprised when we were asked to provide some clarification concerning dependency exemptions and Child Tax Credits in relation to divorced parents
People are confused because they might have heard that the dependency exemption went away. Yes, that is kind of true…but not really.
Here’s what you need to know
There is some confusion about this,but it is quite simple: Nothing has changed in the new tax law as far as claiming a child as a dependent. It’s the same as it always has been. You can still trade the dependency exemption back and forth each year. There is just no monetary piece of the dependency exemption anymore. However there is a monetary piece to the Child Tax Credit. (Keep in mind that this can only be claimed as long as the child is NOT 17 by December 31st of any given year.)
We understand that there is a lot of misinformation out there regarding what has changed and what hasn’t. Wellspring Divorce Advisors is here to help answer any questions about this or any other issue you might be having regarding the financial aspect of divorce.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.
Who Should Move out When a Family Gets Divorced?
/in Collaborative Divorce /by Sandi GumesonThe following blog was provided by Joyce Fine, PhD, Licensed Clinical Psychologist, Certified Divorce Coach, Collaborative Divorce Facilitator. Dr Fine specializes in psychotherapy with adults, couples, and families, provides psychological evaluations, and works as a coach with individuals and couples deciding whether or not to divorce or those going through divorce to help them make the best decisions possible for all family members.
A Changing Family
I recently met with a couple who wanted recommendations for how to talk with their two young children about their upcoming separation, ideas about setting up their parenting schedule once they separated, and support in moving forward with their separation.
During our third meeting, the wife, whom I will call Katy (no real names are used herein) was very frustrated. She was ready to separate. Her husband, whom I will call Alex, was not. He had hoped they would be able to work out their marital differences. Alex needed more time to digest the reality that Katy had made up her mind and her decision was set.
Ultimately, they were both attached to their home. It represented the foundation of their family and the emotional stability it had offered them. Neither wanted to let it go in the face of the instability and colossal transition they were about to step into, or to be the one to set up a new place with their children, since they both thought that the children would like a new place less, that the children would be less comfortable in a new place, etc.
Many divorcing moms feel that it is their right as the mother of their children to stay in the marital home and a lot of divorcing dads agree to that precedent. In Alex and Katy’s case, Katy was set on leaving the marriage and Alex did not want her to go. In asking him to leave their home, she was asking him to do something that he felt was completely against his own self-interest while their crumbling marriage was already shattering his identity, his hopes for their family’s future, and taking him in a direction that he deeply did not want to go.
Their options
We processed why Katy felt that Alex ought to be the one to move out. The more we talked about it, and came up with “atypical” options, she was able to understand the benefits of her moving from the home:
Alex and Katy came in for their next appointment two weeks later. By then, she had signed a lease for an apartment and was set to move in a few days. While Alex was still heartbroken and angry, he was relieved that the discussion of him moving out was over and that he would be able to stay in their home. Her moving out also appeared to enable him to negotiate future decisions with less agitation and sense of powerlessness.
Often, divorcing parties are driven by fear and anger in ways that obscure their ability to think openly, clearly, and flexibly, and they reach toward “common” ways that they have heard divorces are facilitated. This can keep them entrenched in defensive thinking that interferes with decision-making that is best for them and their family. Working with couples to come to the other side of defensive or frightened thinking is critical to their families’ well-being and opens pathways to collaborative movement forward.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.
Divorce & Finances: Can you afford your new life?
/in Divorce Financial Planning /by Sandi GumesonAs Certified Divorce Financial Analysts, Wellspring Divorce Advisors are experts in looking at the entire financial picture during the divorce process. From uncovering and dividing your assets to determining the best course of action moving forward, we help our clients with their finances until the final agreement is signed.
One of the most common questions we’re asked is this: Can I afford my life once my divorce is finalized? Will I be okay?
And there is no one answer for everyone.
A Change in Lifestyle
It does not matter if you’re male or female, working or not working, have lots of assets or very little…divorce often leads to a change in lifestyle. You will have two households as well as the upfront expense of setting up those homes with furniture and household necessities. Childcare expenses could change if the stay-at-home parent suddenly has to go back to work. Your retirement accounts will be affected which means that you might need to change how you save.
But before you panic, let’s take a look at the things you can take control of NOW in order to ensure better success down the road.
Understanding your Finances
One of the most important aspects of the divorce process is developing an accurate budget and understanding your finances. Here’s what you can do:
After your divorce is final, it will be important to review your budget periodically and make sure you are living within your means.
And remember that you’re not alone in the process; Wellspring Divorce Advisors is experienced in creating budgets and available to assist clients in developing a budget for their Divorce and post-divorce life.
Divorce is a stepping stone into a new life. It is important for people to have a game plan so that they can transition into their new independent financial life with success. Let’s make sure you get started on the right foot.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.
Protecting your Assets: How the TCJA will affect the Denver Housing Market
/in Divorce Financial Planning /by Sandi GumesonWith so much uncertainty surrounding the Tax Cuts and Jobs Act, it can be hard to know how these changes will affect you, personally. Yes, there have been changes to alimony and standard deductions in general…but what about how it might affect the Denver housing market?
In many cases, the property you own is one of your greatest assets and is a major factor in divorce proceedings. So, knowing how these changes might affect the Denver housing market is crucial when planning your future.
To get more information about these possible changes, Sandi Gumeson of Wellspring Divorce Advisors Denver turned to real estate expert AK Cotton of Coldwell Banker.
Will the change in tax laws discourage people from buying homes?
The short answer is no, I don’t think it’s going to slow down the market or affect housing prices. The demand in Denver is too high and inventory is too low. At the end of the day, people still want to buy a house and with rental prices, it still makes economic sense. BUT – there are a lot of factors involved in this.
Is there something you would tell a prospective buyer when they’re thinking of purchasing a home, now that the tax laws are changing?
I still think the most important thing is education. Even before this tax reform bill, most homeowners didn’t really understand the financial impact of tax law and how that could affect what they can afford.
What else do you think people should know when it comes to the new tax laws and the Denver housing market?
The original tax bills proposed some pretty major changes that might have had more of an impact on the real estate market conditions. But, during negotiations, the final bill that was voted on protects a lot of our tax benefits as homeowners.
For example:
Thank you, AK Cotton, for your insight and information! For more information about how you can connect with AK, click here.
Sandi Gumeson is a Certified Divorce Financial Analyst® in the Denver area. She is also a CPA (CA License), a member of the AICPA, and a member and on the Board of Directors for the Institute of Divorce Financial Analysts. Sandi’s extensive experience in finance, analysis, operations, budgeting, and forecasting enables her to provide a high level of expertise in understanding the overall financial picture for her clients. To contact Sandi for assistance, call 303-378-9323 or email sgumeson@wellspringdivorce.com.
The Final Version of the TCJA: Here’s what you need to know
/in Divorce Financial Planning /by Sandi GumesonOn Friday, December 15th, 2017 the final version of the legislative text involving the Tax Cuts and Jobs Act (TCJA) was released. This was accompanied by the supporting Conference Committee notes. Here is a summary of how this might affect you in 2018:
Executive Summary
Income tax brackets
Alimony
Capital gains and dividend rates
Standard deduction
Suspension of personal exemption
Phaseout for Child Tax Credits
$10,000 cap on state and local income and property tax deductions.
Mortgage interest deduction
Repeal of miscellaneous itemized deductions
Bill does not amend or repeal Capital Gains exemption for principal residence despite revisions proposed.
Doubled the estate tax exemption
Many of the reforms sunset in 2025.
Commentary
With limitations on deductions for state and local taxes and mortgage interest, far fewer clients will end up itemizing in the coming years.
What does this mean?
This means our process for entering data into Dissomaster (California support calculator) will change. It will be extra important to be sure you do not enter full mortgage interest amounts if the indebtedness is over the $750,000 limit. In the interim you can use the tax settings in Dissomaster to prepare hypotheticals showing support guidelines with non-taxable and non-deductible alimony by doing the following:
We ran a hypothetical guideline calculation with the father earning $20,000 per month and mother earning $3,000 and the combined net disposable income decreases by $600 per month.
There are provisions in the bill that keep taxpayers from accelerating state and local taxes or deductions payments for future years into their 2017 return. So, there is no way to game this change as we may have in the past by accelerating said deductions into higher income years.
Wellspring Divorce Advisors helps individuals and couples address the financial aspects of divorce in a civilized, equitable, and efficient manner by providing expert divorce financial planning and advice.
Contact us to find out how we can help you through this process.