Financial Infidelity: Catching a Cheating Spouse

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Lying about money can take a harsh toll on a marriage.

I was interviewed for this CNN Money story a few weeks ago. Unfortunately they did not include any of the really great examples I shared from my practice. Instead the author zeroed in on my comments about why financial infidelity is so prevalent and my suggestions for helping couples have the conversations that will avoid it in the first place. Read the rest of the article at CNNMoney.com and check out my previous post on Financial Infidelity.

 

What do I Do With a Home in San Diego When I Divorce? – Part 2

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The last time I posted commentary on the San Diego Real Estate Market and how it can and should effect your divorce financial planning I mentioned an estimated figure of 25% as an average discount from listing price to sales price as one of my major concerns. The next day I received an e-mail from Prudential California Realty including their recent economic analysis confirming my estimates. The table below details the average list versus sale price for all home sales closed in the $1,000,000 plus price range in San Diego County over the last two years. The figure confirms my suspicion that a 20 to 25% disconnect exists between sellers and buyers. All of the realtors I speak to say they are aware of this and suggest being aggressive on pricing. Universally they say the homes that are priced right sell quickly and often above the listing price.

So what about the time line for sales in our current market? Again thanks to Prudential we have some current inventory information. The current inventory can give you some idea of the time it might take to sell  a home in the current environment. From $1,000,000 to $1,999,999 there is an 11 month inventory of homes currently listed for sale. That means that realtors would expect it to take 11 months for all current inventory to be sold. In the $2,000,000 to $2,999,999 price range there is currently 34 months of inventory.

It is a generally accepted belief in the real estate industry that a market with more than 12 months inventory is stagnant at best. Stagnant is not a good term in the real estate business. It means prices have to come down in order to equalize supply and demand. We have too much supply and very little demand. Knock 20% discount from a $2,500,000 listing price to an estimated $2,000,000 sale price and maybe the markets free up.

Give us a call if you are faced with making a decision about what to do with the family home now that you are divorcing. It may be the biggest financial decision you make during the divorce proceedings.

 

Justin A. Reckers can be reached at:

Telephone: 858-509-2329

What do I do with a home in San Diego when I Divorce?

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If you are faced with making a decision to keep or sell your family residence during divorce, the first thing you must understand is how our real estate markets work. San Diego area Real Estate markets tend to run in cycles of 8 to 12 year durations top to top. See what I mean by “top to top” by looking at the chart below which gives you a general idea how cyclical markets work. A cycle starts on the left of the chart at a “top” or boom market and ends on the right side of the chart with another “top” or boom market. In general you want to avoid buying at a top or selling at a bottom.


Take a look at the next chart to see how San Diego’s real estate market has performed over the last twenty-five years. Our last bottom was around 1997. The last top was 2006. The small up tick in 2009 and 2010 is likely based largely upon the increase in demand caused by government stimulus in the first time home buyer credit and artificially low interest rates. The two variables made purchases cheaper on the lower end of the price point and did nothing for the higher end for coastal areas like La Jolla and Del Mar and their inland neighbor, Rancho Santa Fe. I do not believe these areas of San Diego have seen the bottom of prices as of the drafting of this report. Many coastal areas such as La Jolla and Del Mar are seeing an average of 25% discount from listing to selling price. This makes me think the owners and Realtors in these areas believe their homes are worth more than others are willing to pay for them. Until they adjust their expectations these areas will continue to be over-priced and resist making a bottom in prices. Interest rates can only go up from here making it more expensive for buyers to foot the monthly bill, creating another road-block to transactions and further complicating price movement.


There are far more variables, than we can discuss here, involved in determining where the values of real estate will go in the years to come. San Diego real estate is still a good long-term purchase if you plan on living in the property for a long period of time and think of it as a home meant to provide security and comfort rather than an investment meant to earn a return and coincidentally provide you a place to live.

Many divorcing couples are faced with a reality of our current economic circumstances. Their house is worth a lot less than they paid for it 5 years ago. For many that means they are under-water, meaning they now owe more on their mortgage than the property is worth.

Give us a call if you are faced with making a decision about what to do with the family home now that you are divorcing. It may be the biggest financial decision you make during the divorce proceedings.

Justin A. Reckers can be reached at:

Telephone: 858-509-2329

 

Working With Attorneys in Mediation

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mediation, CDFA

In an article from HuffPost, they offer great tips on how to choose a “Mediation Friendly” lawyer. But here are more tips on how to effectively find the right team to help you with your divorce.

 

Ask your mediator for referrals to attorneys they know, respect and have worked with.

The consulting attorney you hire will be the only source of advice regarding your rights and obligations under the law. You need this advice so do not choose the least expensive person you can find. They may even be asked to draft legal documents such as Marital Settlement Agreement or Qualified Domestic Relations Order. Remember, No matter what method you choose to divorce, it is a legal process and legal advice is necessary.

Consider also having a financial advisor help you understand the short and long-term ramifications of settlement options.

Divorce is the largest financial transaction that many people will experience and you will live with the results of your decisions for the rest of your life. Make sure they are made with all of the financial information at your fingertips and expert advice from someone experienced in the financial intricacies of divorce. Google Divorce Financial Planning and look for a professional with Certified Financial Planner and Certified Divorce Financial Analyst credentials.

A financial planner experienced in divorce financial planning will help you gather the necessary data, level the playing field in financial knowledge when one party has not been involved in the family management and even help you brainstorm settlement options to take back to mediation.

 

wellspring divorce advisors

 

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.

What is No Fault Divorce?

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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.

“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, and 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 a couple 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 black mail through unsubstantiated accusations of fraud, cruelty and criminal behavior.  I am told by attorneys in New York and Connecticut that black mail and other legal fictions were common for divorces in New York state until the 2010 adoption of no-fault laws.

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. I was asked to explain what it meant recently and imagine it will take time with television representations like the 1960’s  divorce played out in the AMC series Mad Men. The DVD for Mad Men Season 4 contains “Divorce: Circa 1960s” – A three-part documentary about divorce during a time when the traditional family was the core of American society. I have not seen it yet but friend and colleague, Constance Ahrons, has had good things to say.