Tag Archive for: Certified Divorce Financial Analyst

Spousal Support After Remarriage

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Spousal Support

Will I receive spousal support after remarriage?

It may depend on who is getting remarried. The payer or the recipient?

The remarriage of the payer has no affect on spousal support orders. Most divorce settlements do terminate spousal support after remarriage of the recipient. This is not a legal requirement just an assumption made in most cases and the family law code of many states. Some states even see co-habitation with a member of the opposite sex as grounds for modification of spousal support.

Get the facts.

Make sure you understand the financial ramifications of your new romantic interest before you dive into a new marriage. It is not abnormal for recipients of spousal support to postpone remarriage in order to maintain their spousal support payments. If you are still negotiating your divorce settlement but have designs on getting remarried soon here are some thoughts.

How Wellspring Divorce Advisors can help.

We have helped clients negotiate settlements to continue spousal support after remarriage of the recipient. Circumstances of the family financial picture or the health of the recipient party may support such a settlement. Like any negotiation each possible outcome comes with risks, rewards, costs and benefits. Wellspring Divorce Advisors can help you understand each angle and see if your circumstances may warrant continuing spousal support after remarriage.

Here are some examples of settlements we have helped craft.

1.The recipient party is permanently disabled and unable to earn a living for themselves.

In this case the recipient’s remarriage may have no effect on their financial circumstances due to their need for constant medical care. It may also be the payer simply wants to be sure their former spouse can live in comfort regardless of their circumstances and wishes to provide the minimum necessary to support medical expenses even after the recipient’s remarriage.

2. A non-modifiable order has been negotiated based upon other financial factors in the case.

Non-modifiable spousal support orders will include either a specified duration or dollar amount for the support payments regardless of other circumstances. For example if you negotiate a non-modifiable support duration of 10 years and get remarried in year 5 the spousal support would continue after the recipient’s marriage.

3. Some parties negotiate spousal support by agreeing to a total amount to be paid over the life of the order then work backward to determine the amount and duration.

In other words $1,000,000 over ten years which results in $8,333 per month for the life of the payment. Usually these types of settlements assume the continuance of spousal support after remarriage of the recipient in order to complete the full payment of the agreed upon $1,000,000.

 

If you are the payer the IRS makes one important distinction with regards to the termination of spousal support. Spousal support, alimony in their language, must terminate upon the death of the recipient for it to be tax deductible to the payer. They do not, to our knowledge, consider remarriage of the recipient to jeopardize the deductibility of the spousal support payments.

First meeting with divorce attorney: How can I prepare?

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divorce attorney

You can save a lot of money on attorney fees if you are organized and provide your divorce attorney with concise and complete information.  Here are some tips on how to prepare for your first meeting with divorce attorney.

Be prepared to discuss your marital problems with your divorce attorney but keep it concise and honest.

  • The longer you talk about the the lies, affairs and financial disagreements that ended your marriage, the longer your meeting will take and the more it will distract from the legal aspects and business transaction of your divorce proceedings. Talk to your mental health professional if you need a more emotional connection. Talk to your financial expert if you need assistance understanding the family finances and planning for your future. Do your best to simply state. Why, in your honest opinion, your marriage has come to an end.
    • Romantic infidelity?
    • Financial infidelity?
    • Financial Disagreements?
    • Life review?
    • No longer in Love?

An idea of what you want to get out of the divorce proceedings financially.

  • If you do not know what you want; Wellspring Divorce Advisors can build a plan for your financial future and communicate the results with powerful analysis and reports.
  • Some examples
    • Keep the House – Can you afford it?
    • Financial Security – What does this mean to you?
    • Long term spousal support
    • Not to go back to work
    • Children’s college education paid for
    • Financial autonomy
    • Purchase a new home

You should bring the following information to your first meeting:

  • Family information, including the names and birth dates for yourself, your spouse, and your children
  • The date and place where you were married
  • Current employment information for you and your spouse
  • An estimate of financial status including
    • Income (current pay-stubs and last three years tax returns would be best)
    • Expenses (if you have a budget bring it, if not let us know and we can help you prepare one)
    • Assets and Debts (account statements for mortgage, 401K, brokerage accounts, bank accounts, credit cards)

 

We suggest meeting with a Wellspring Divorce Advisor before or immediately after your first meeting with divorce attorney. We will help you put together a complete and detailed picture of your family finances before the attorney heads down the path of expensive formal discovery. We can also help you choose the right attorney and divorce process if you do not yet have one.

Real World Financial Infidelity – Skimming

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financial infidelity

What is skimming?

Skimming from marital bank accounts is the process of slowly transferring marital assets from joint accounts to a secret account in the name of one person. This version of financial infidelity may be considered outright theft and often requires the assistance of an unrelated third party.

Here’s an example of financial infidelity:

Years ago we had a client come to us after becoming suspicious of his wife’s spending habits. He knew something was fishy but wasn’t sure why. His wife spent very large amounts of money at retail establishments like department and grocery stores on her debit card. He became suspicious when he realized she never seemed to have large bags of new clothing and was purchasing groceries only for a family of three.

We completed a cash flow analysis from bank statements and prepared a list of possible avenues for financial infidelity. Principal among them were the large and abnormally frequent trips to grocery stores and Nordstrom.

Here’s what we found:

During our analysis we asked the client whether his wife typically carried around large amounts of cash. We were concerned she could be taking cash out every time she used her debit card at the grocery store. Many grocery stores will allow for $200 of cash to be withdrawn at the cash register on top of a bill for $18.99 in groceries. The total bill then looks like $218.99 was spent at the grocery store on a bank statement. It actually makes a lot of sense for stores to allow these cash back transactions because it helps reduce employees access to large sums of cash and reduces internal costs for accounting and balancing cash deposits.

We also wondered if the spouse could be taking advantage of cash refunds when returning purchased items to department stores. Many stores will give you the option to receive cash or a credit to your card if a debit card was used to make the original purchase. There is typically a limit to the amount of cash refunds they will provide but a small refund here and there can ad up quickly.

Where did the money go?

Once we raised these concerns the client was able to find tens of thousands of dollars of cash withdrawals made through these two methods by comparing receipts he acquired to bank statements. The only remaining question was…Where did the money go? It turned out the cash was being sent to her mother in a different state via US Mail and deposited into an account in the mother’s name. This was a smart move by the wife because the statements would never be sent to her and any interest earned on the account would be on her mother’s tax ID.

This type of scheme is not all that uncommon. A recent Harris Poll done on behalf of the National Endowment for Financial Education saw 26% of respondents admitting to hiding bank accounts or cash from their spouse.

Fortunately for our client there are ways to sniff out financial infidelity.

 

Financial Infidelity: How do I catch my spouse?

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financial infidelity

How do I catch financial infidelity?

1. Ask for online access to credit and bank accounts.

Download full statements for a representative period of time. We suggest at least six months. If online access is not available, get statements from the mail. Make copies for yourself, preferably electronic copies by scanning.

2. Review transactions and note:

  • large cash withdrawals and the location of ATM usage, you may be able to pinpoint the destination of the cash withdrawals if in close proximity to strip club as an example
  • large debt or credit transactions
    1. Location of restaurant, bar and hotel expenses. Large restaurant or bar bills could indicate your spouse was not alone.
    2. Large retail store expenses, say Tiffany’s, might be indication of gifts being purchased for someone else or spending addiction. If you suspect a spending addiction look around the house for clothing with tags still on it either in bags or even hanging in the closet.

3. Get your credit report.

It is possible for your spouse to open credit cards on your credit without your knowledge or consent. Go to CreditKarma.com or www.annualcreditreport.com to get a free copy of your report and look for any accounts you are not familiar with. If you find more credit cards than you were previously aware of this could be indication of large balances and growing indebtedness.

4. Compare your family expenses to net incomes and estimate what you should have in savings.

This may be the quickest way to confirm there are large amounts of missing money or unnecessary indebtedness. If your family’s net income after taxes is $10,000 per month and your expenses are $7,000 per month there should be $36,000 of available savings in a given year. If there is no money in savings or investments, you have reason to be suspicious.

 

Can anyone help me?

If all of these steps fail to return the answers you seek consider hiring a Certified Divorce Financial Analyst at Wellspring Divorce Advisors to analyze the family financial picture and uncover financial infidelity. We will help ensure no stone is left unturned and tell you if there is something to worry about you can move on with peace of mind.

Protecting Your Assets: What is Financial Infidelity?

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protecting

Protecting yourself.

What is Financial Infidelity?

Financial Infidelity is the misuse, mismanagement or misappropriation of marital assets and incomes during a marriage. Financial Infidelity can stem from many causes including:

  • shame from a job loss
  • extra-marital affairs
  • addiction
  • poor communication
  • downright fraud.

What are the signs?

Clients have come to us suspecting their spouse of buying gifts or lavish trips for the mistress, frequenting strip clubs and major gambling losses. We have also had clients learn of their spouse’s transgressions only when they saw the poor condition of their family finances during divorce proceedings.

Regardless of the reason for the suspicion or the reason for the financial infidelity it can wreck marriages and the long term financial security of the victim. A recent Harris poll showed 42% of poll respondents have committed some form of financial deception. 39% hid a purchase, bank account, cash or a document of some type like a bill or credit card statement. 16% admitted to a lie about the amount of debt they had or the amount of money they earned. 25% of couples experiencing financial infidelity in the poll ultimately separated or divorced while 25% said it had no effect on their relationship.

Take care of yourself.

You owe it to yourself and your children to be diligent and engaged in the finances of your marriage if only to fight for what is left in a divorce. Read on for a detailed overview.

  •  Click here for a list of 20 questions we ask clients who suspect their spouse of financial infidelity.
  •  Click here for suggestions of first steps to take if you are concerned about financial infidelity.
  • Click here for some real world examples of financial infidelity from our practice.