As we all know, divorce can be complicated. It involves money, custody issues, child support, spousal support, and other legal aspects. You need to educate yourself, protect yourself and empower yourself on these issues. Until you’ve done that, you’re not ready.
For example, do you know how many bank accounts you have as a couple and individually? Any other marital assets you might be entitled to? Consult with at least three attorneys as you explore the option of divorce. “There are economic realities that you have to acknowledge,” says Dr. Phil, “but you are not powerless.”
Dr. Phil’s Questions:
1. Have you done everything you can to save and rehabilitate your marriage?
2. Do you have unfinished emotional business?
3. Have you researched, planned, and prepared yourself legally for divorce?
4. Are you ready to adopt a new standard of conduct with your children?
5. Are you willing to create a new relationship as a co-parent?
Our thoughts.
Here is our take. All of these questions are important to consider before embarking on dissolution proceedings. If you enter divorce proceedings without having them answered the process is guaranteed to take longer and cost more money because the unanswered questions will play themselves out in conflict during negotiations.
Or course, Wellspring Divorce Advisors gravitate directly to question #3 because it deals with money and we agree it is absolutely mandatory to do your homework before filing if possible. Find the family bank accounts, copies of tax returns and investment account statements and research the options available for settling your differences outside of court.
However, we also find it helpful for our divorcing clients to work with a mental health professional as a coach during the process to get assistance with difficult and emotional decisions.
Read the full text at the link below courtesy of Huffington Post.
5 Questions You Need To Ask Before You Decide To 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’s to Blame? The History of No-Fault Divorce.
/in Divorce Financial Planning /by Sandi GumesonWhat is No-Fault Divorce?
No-fault divorce refers to a divorce in which the granting of a dissolution of marriage does not require a showing of wrong-doing of either party. It is therefore not necessary for one party to produce evidence that the other has committed a breach of the marital contract. In other words, you do not have to prove that your spouse cheated or misrepresented themselves in order to seek a divorce.
The Beginning
“No-fault” divorce in the United States originated in the state of California effective January 1, 1970, in a bill signed by then governor, Ronald Reagan. In August of 2010, New York governor, David Paterson, signed “no-fault” divorce into law. Since October 15th, 2010 no-fault divorce has been legal in all 50 U.S. states.
Prior to no-fault rules, a divorce could only be obtained through the showing of fault of one of the parties. Unfortunately it wasn’t just about proving the other party didn’t love you anymore; instead you had to prove one party had breached the marital contract through adultery, abandonment, felony or other culpable acts.
In circumstances where there was no party at fault and the couple simply wanted to dissolve their marriage, they might arrange for what New York practitioners called “collusive adultery.” A pre-arranged time would be set by mutual agreement for Wife to return home to find Husband with a mistress. This finding would offer the evidence of adultery necessary to obtain a divorce.
These types of arrangements were common along with blackmail through unsubstantiated accusations of fraud, cruelty and criminal behavior. I am told by attorneys in New York and Connecticut that blackmail and other legal fictions were common for divorces in New York state until the 2010 adoption of no-fault laws.
The Result
The opposing party would often not contest pleadings or do so only sparingly as a token for the courts. Ultimately judges and some lawyers began to recognize the affect these legal fictions could wind up having on the judicial system considering the dissolution proceedings were started with lying under oath.
The term no-fault may eventually fall out of the vernacular of the American people as no-fault laws have now been adopted by all states in the union.
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.
From Dr. Phil: 5 questions to ask yourself before your divorce.
/in Divorce Financial Planning /by Sandi GumesonAs we all know, divorce can be complicated. It involves money, custody issues, child support, spousal support, and other legal aspects. You need to educate yourself, protect yourself and empower yourself on these issues. Until you’ve done that, you’re not ready.
For example, do you know how many bank accounts you have as a couple and individually? Any other marital assets you might be entitled to? Consult with at least three attorneys as you explore the option of divorce. “There are economic realities that you have to acknowledge,” says Dr. Phil, “but you are not powerless.”
Dr. Phil’s Questions:
1. Have you done everything you can to save and rehabilitate your marriage?
2. Do you have unfinished emotional business?
3. Have you researched, planned, and prepared yourself legally for divorce?
4. Are you ready to adopt a new standard of conduct with your children?
5. Are you willing to create a new relationship as a co-parent?
Our thoughts.
Here is our take. All of these questions are important to consider before embarking on dissolution proceedings. If you enter divorce proceedings without having them answered the process is guaranteed to take longer and cost more money because the unanswered questions will play themselves out in conflict during negotiations.
Or course, Wellspring Divorce Advisors gravitate directly to question #3 because it deals with money and we agree it is absolutely mandatory to do your homework before filing if possible. Find the family bank accounts, copies of tax returns and investment account statements and research the options available for settling your differences outside of court.
However, we also find it helpful for our divorcing clients to work with a mental health professional as a coach during the process to get assistance with difficult and emotional decisions.
Read the full text at the link below courtesy of Huffington Post.
5 Questions You Need To Ask Before You Decide To 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.
The Death of an Ex: How does that affect spousal support?
/in Divorce Financial Planning /by Sandi GumesonQ. What if spousal support is payable for 6 years, but one spouse dies?
Payments must cease upon the death of the recipient in order for it to be considered spousal support for tax purposes and tax deductible to the payor. Spousal support can be paid after the death of the payor, typically from their estate in some form, but most settlement agreements and divorce decrees state that it will stop upon the death of either spouse.
Our suggestion.
We suggest the payor spouse be required to carry a life insurance policy to cover the lost cash flow for the payee spouse in the event of premature death. If this isn’t required in your settlement you should ask for it to be added. In the event the agreement can not be modified you should consider buying the policy on your former spouse yourself. You will have to pay for it but the peace of mind is worth the cost.
In order to determine the death benefit amount needed you would do a present value calculation on the stream of cash flow from the spousal support payments.
For example, a $5,000 per month spousal support payment payable for 10 years would have a present value of $471,540. (Call us if you need help determining the right amount of life insurance.)
No matter the route you take for insuring the payments make sure you, the support recipient, are both the owner and beneficiary of the life insurance policy. Losing the cash flow from spousal support can have devastating affects on your ability to maintain your lifestyle.
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.
Paying for College After Divorce: The truth about split finances
/in Divorce Financial Planning /by Sandi GumesonThe struggle is real.
It should come as no surprise that in most divorce cases, paying for college after divorce becomes a challenge for both parents. In fact, a study published by the Journal of Family Issues found that divorced parents contribute about one third of what married parents contribute.
The truth is, students with divorced parents face a greater burden in financing everything; from their first car to a college education to flowers for their prom date…usually finances aren’t what they were before. The reality is that there is often less to go around now that many expenses, like heating bills, are double the amount they were during marriage.
Children must also decide who they should hit up for the money when they need it. Do I ask Mom or Dad? (The really smart ones will ask Mom and Dad in the hope they can collect from both and double their take.)
Sometimes ignorance is bliss.
I was once contacted by a journalist “seeking a student with divorced or remarried parents to comment on how their parents’ marital status has affected their college education and finances during college.” The writer wanted to ask, “Did your parents’ divorce really cause them to contribute less to your education, whether directly or indirectly?”
The kid doesn’t know what they don’t know and it should stay that way. My hope is that all parents will let their kids know they are doing their best to help in every way they can and leave it at that. No child will benefit from knowing that Dad “can’t pay for all of tuition this year because he has to pay Mom Spousal Support.”
Should you even be paying for college???
My advice to all parents is to pay yourself first. Do not even consider paying your kid’s tuition until you have maxed out all available tax deferred retirement vehicles.
Why?
Your kids can get loans at fairly favorable terms and may even get scholarships and grants they will never have to pay back. No one will give you loans to pay for your retirement and you certainly aren’t going to be getting any scholarships to your local country club. For those who absolutely must limit the amount of work your child takes on (outside of being a student), please at least have them work during their summers off.
Need help figuring out college funding with your ex or soon-to-be-ex spouse? Wellspring Divorce Advisors are here to help answer your questions and get you on the right path! Contact us at jreckers@wellspringdivorce.com or 858-523-8249.
How do I figure out how to live on less money after the divorce?
/in Divorce Financial Planning /by Sandi GumesonFinding ways to stretch the family dollar and live on less money is often the hardest part of life post divorce. Here is a place to start:
Create a budget with the goal of achieving the following results.
1. Detail all income and expenses
2. Create guidelines for your spending in each category.
Remember these are just guidelines. If you treat them like rules you may not feel like you’re making a positive change.
3. Create a snapshot of your financial world.
4. Find where you can cut discretionary expenses.
Discretionary expenses include entertainment and dining out and offer the best source of budget cuts.
It will be helpful, even necessary for some, to work through this process with a Financial Planner. You are not alone in your dread for budgeting. Humans are built to think about surviving today at the expense of tomorrow.
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.