Great Lakes Divorce Financial Solutions provides mediation services as well as detailed divorce financial analysis and planning whether you are contemplating divorce, evaluating options, or planning for your future. Your source for all information related to divorce financial planning and mediation. Empowering and educating clients to make wise financial decisions.
For more than a decade, I’ve worked with people going through the divorce process. As a result, I can assure you that the anxiety you feel when you think about divorce – that tight feeling in your stomach; the restlessness; the irritability is perfectly normal.
We have a tendency to assume that anxiety comes about as a result of our current situation but, those physical sensations are actually the beginning of anxious thoughts, not a symptom of them. They’re closely tied to our hunter/gatherer past when we were frequently exposed to danger. Because of this, our bodies regularly release small amounts of cortisol (commonly known as the stress hormone) causing pangs of anxiety. Often, these are so short-lived that we don’t notice them. When we’re in the middle of something stressful, such as a divorce, however, these sensations prompt rumination which, in turn, lead us to mistakenly believe that we’re anxious because something’s wrong rather than correctly attributing them to a simple biological process.
This is why so many people find themselves feeling like they’ve made a mistake after they’ve first filed their documents. For many years, my colleagues couldn’t quite understand why so many divorcees – many of whom had been living separately from their spouses for several years and were adamant that they wanted their marriages to come to an end – could become so deeply concerned about their decision after taking this vital first step.
Having suffered from anxiety for several years myself, however, I was fully aware that such feelings are irrational, devoid of logic and a symptom of significant change and the uncertainty it brings. As a result, it was only logical to conclude that this was behind the worries expressed by our clients as well. The changes that concerned them had often already taken place following their separations: both parties had moved into new properties, created co-parenting plans and had been paying separate bills for some time. As their fear and concerns were not logical, though, they began worrying about these very things – things that they had coped with admirably – after the formal and legal process of divorce began. Why? It’s simply a physiological response.
When you realize that the physical sensations of anxiety are caused by our primordial minds and not any real threat, you can refrain from indulging them by ruminating on how your divorce could adversely affect your wellbeing. Yes, it’s a huge change and you’re going to feel a degree of concern from time-to-time and that’s ok – just don’t beat yourself up about it. Instead, when you’re aware of the fact that your thoughts are drifting to a dark place, simply try and think about something else or distract yourself.
Ultimately, I’ve written this article to convey one simple message: that, once you start the divorce process, it’s very likely that you’ll find yourself worrying. This is perfectly natural, though, and is often baseless. If you find yourself suffering from divorce anxiety, remember the words of Mark Twain: “I’ve had a lot of worries in my life, most of which never happened.”
Jay Williams works as a case manager at Quickie Divorce, one of the largest providers of uncontested divorce solutions in England and Wales. He lives in Cardiff, Wales, with his wife and two-year-old daughter Eirys.
If you have found your way to my blog, I’m guessing your marriage did not go as planned. Let’s face it, in life, there are a lot of things that don’t work out as planned. One of the most trying examples is when you plan to spend the rest of your life with someone, and subsequently, file for divorce. Divorce can take a significant financial and emotional toll on a couple, their children, and other family members. In the midst of immediate financial and legal concerns, couples also need to consider ways to help protect their individual financial futures and that of their children’s in the event of death. This brings me to our topic of life insurance and divorce. Life insurance may offer a solution.
How Life Insurance Protects Your Family
While I always bring up the topic of life insurance during the course of mediation, I find that few want to have an in-depth conversation on the topic. Let’s take a look at several different scenarios. After a divorce, if the non-custodial parent who is paying spousal and/or child support were to die, then the custodial parent may be unable to maintain the children’s lifestyle or save for a future college education. On the other hand, if the custodial parent were to die, the non-custodial parent may be unable to afford childcare expenses. Consequently, divorcing couples may want to consider making life insurance policies part of the divorce decree.
Life Insurance and Divorce: What are the options?
The custodial parent may want to purchase a life insurance policy on the non-custodial parent, but if not, transferring ownership and beneficiary arrangements on an existing policy may be another option. The custodial parent may request spousal or child support increases to cover the cost of policy premiums. If the non-custodial parent remains the policy owner, the divorce decree can include arrangements to ensure that the custodial parent is named as the irrevocable beneficiary and that he or she receives ongoing proof that the payments are made and the policy remains in force.
The non-custodial parent may wish to keep the policies he or she already has to protect other financial interests. To ensure protection for children from a previous marriage, the non-custodial parent may consider purchasing a new policy on his or her life, naming the former spouse as the owner and beneficiary. If this is done before or during the divorce proceedings, gift tax will not be owed. If the custodial parent is the policy owner, premiums may be tax deductible as spousal support.
Life Insurance and Divorce: What about existing policies?
For existing policies, it is important to remember that the insurance company must be notified of any beneficiary changes. A will cannot be used for this purpose. In addition, should the insured remarry and the policy names the “husband” or “wife” of the insured as the beneficiary, the new spouse may receive the proceeds. If the insured does not remarry and the same policy language is in force, then the proceeds may be paid to the secondary beneficiary. If the insured’s estate is named as the new beneficiary, insurance proceeds may be delayed by the probate process. If minor children are named as beneficiaries, additional problems may arise, as insurance companies generally do not pay minors directly. For this reason, you may want to consider creating a trust for minor children and naming the trust as the beneficiary of the policy proceeds.
Divorce is rarely easy, but with a well-planned strategy, the short- and long-term financial needs of your loved ones can be met. If you need assistance aligning your divorce agreement with your short- and long-term financial goals, schedule a no-cost consultation today. We meet with clients both virtually throughout the United States and locally in Cleveland, OH. Let us help you take control of your financial future.
Great Lakes Divorce Financial Solutions, LLC does not offer insurance products. We do, however, offer comprehensive financial planning to determine if you have the appropriate level of coverage and would be happy to make a referral if you are in need of additional protection.
I often find myself sitting in mediation with couples who are looking for guidance when it comes to creating a parenting plan. The beauty of mediation is that you can create a parenting plan that is going to work best for your children and your family and quite frankly, it really does not matter what everyone else is doing. That said, there are certain elements that, from a practical standpoint, you may want to address. Here is a parenting plan checklist of items to consider.
What is a Shared Parenting Plan?
Before I get ahead of myself, what is a Shared Parenting Plan? It is a written document that details how you will co-parent. If you take the time to think through future parenting challenges that may arise, it can really take a lot of stress out of co-parenting. It’s like a guidebook that you have created for yourselves. When we discuss your plans for shared parenting in mediation, you can determine how detailed to get. There is a Shared Parenting Agreement that will ultimately need to get filed with the Court. However, in mediation, we can explore obstacles that may arise that are not within the jurisdiction of the Court. A well-thought-out parenting plan has the potential to substantially decrease future co-parenting-related conflict. Here is a parenting plan checklist to get you started.
Parenting Plan Checklist:
Parenting Schedule: Who be responsible for the child(ren) and when? I often get feedback from clients that this is going to vary due to work schedules and other commitments. I get it! The key here is to create structure and routine for co-parenting and remember, it will help you to avoid future conflict. Come up with something and discuss how you will handle future adjustments to the schedule. Also, consider who will drive the kids to make the exchange. Will you meet at a neutral location or drop off at one home and pick up from the other? There’s no right or wrong. Remember, this is about creating a plan that will work for your family.
Holidays: What family traditions are most important to you? Keep those in mind as you negotiate who will be with the kids on which holiday. If you both have family traditions on the same day, can you split the day? For example, the kids have lunch with one parent and dinner with the other? You may find it helpful to alternate certain holidays each year.
Birthdays and Other Special Occasions: Consider the children’s birthdays as well as your own birthday. Talk about family parties, graduations, and other special occasions. Depending on the age of your children, this plan may need to be flexible enough to handle numerous changes in your family. The key is coming up with a way of communicating about these events and recognizing that you are both going to have to be flexible, to some extent. Remember, it’s all about doing what is in the best interest of your children and let’s face it, that may not always be the most convenient thing.
School Holidays, Sick Days & Vacations: When your children are school-age, what is the plan for all of those teacher in-service days, snow days and school vacations? What about when your kids are sick?
Travel: For some families, travel is a big topic and for others, it does not come up as much. Do you travel frequently for work? If so, how has that been factored into the parenting schedule? Do you plan to take the children on trips? If so, how far in advance will the other parent need to know? Are there any restrictions regarding where they can go or who can travel with the children?
Discipline: Have you and your co-parent been on the same page as it relates to discipline? If not, this is an especially important conversation to have. Even if you have been on the same page, expectations change as children get older. Take time to discuss not only how you will discipline your children but also how you will communicate regarding discipline in the future.
Health Care: Who will carry the children on their medical insurance? Who will be responsible for making any major medical decisions? What about unexpected medical expenses?
Education: Will one parent take the primary role when it comes to education or will you share in this responsibility? Will you both attend parent-teacher conferences? How will report cards be handled? What about decisions regarding public vs. private schooling?
Financial Responsibilities: Everyday expenses are generally discussed in the context of child support. What about other child-related expenses such medical expenses or extracurricular activities? How will you determine who pays for these costs? If you are sharing in the expenses, you’ll want to detail the logistics and percentage each parent will pay. For example, will you be consulting with the other parent prior to committing to an expense? How will you communicate? How long does each parent have to come up with the money to cover their share of the expense? You may find an app such as OurFamilyWizard to be helpful in tracking and communicating regarding these expenses.
Parent Communication: Even the most well-thought-out parenting plan is going to require some level of flexibility and communication. How will you communicate questions and concerns? With what frequency will you communicate?
Create a Parenting Plan that Works for Your Family
This parenting plan checklist might just be a starting point for you. It is not meant to be exhaustive. Remember, the great thing about the mediation process is that it gives you greater control. You are able to make these decisions based on the needs of your children and your family. You do not have a Court telling you how to parent. It also challenges you to think long-term about how to best parent your children moving forward. I got divorced when my children were ages 4, 7, and 9 and my ex and I still have many years of co-parenting ahead of us. Your parenting plan is not going to be perfect and it’s not going to cover every situation that may arise. However, it can create a solid framework for interacting and decision-making going forward.
If you are considering the mediation process for your divorce and would like to learn more, schedule a no-cost phone consultation. We offer mediation locally in the Cleveland-area and virtually nationwide.
Did you know that you don’t have to divide your assets 50-50 right down the middle when you get a divorce? In fact, you may not even want to! As a Certified Divorce Financial Analyst, one of the key items I work with parties on is how to equitably divide assets when negotiating their divorce settlement.
The first thing you should do is create a detailed list of assets that will need to be discussed. If you don’t completely understand the pros and cons of each asset, meet with your CDFA to discuss. Once you know what you are working with, consider which will best help you reach your financial goals.
One way to have greater control over how assets are divided in a divorce is to consider alternatives to the traditional litigation process. An important benefit of processes such as mediation and collaborative divorce is the opportunity to be more creative in your settlement agreement.
Wondering how to divide assets in a divorce? Here are 7 questions to ask yourself:
Do I have a need for liquidity?
What does that even mean? It is imperative that you go through the whole budgeting process before you start looking at how assets will get divided. Certain assets such as a house or other real estate property may take time to sell and would not be your best option if you need cash now. In fact, if possible, I would discourage you from looking at negotiating real estate to meet your cash needs at all.
What are my future income needs?
“Future income needs” is pretty broad. What do I mean by “future?” Future needs could include income you need in the next year or even in a more distant retirement plan. It should all be considered when negotiating how to divide assets in your divorce.
What is the after-tax value of the asset?
I frequently see individuals (and even their attorneys), who show me spreadsheets that detail various account values and that is the only number that they are looking at. When comparing assets, it’s critical to have the cost basis of each asset and to consider the tax impact on tax-deferred assets such as pre-tax 401-K accounts and/or traditional IRAs. Without this information, there is no way to make an apples-to-apples comparison. Additionally, one way to maximize the after-tax value of your marital estate is to award more of the tax-deferred assets to the lower income spouse.
How comfortable am I with risk?
I could write a whole blog post on this topic alone. For that matter, there are whole books on the topic. The important point here is that all assets are not created equal and each has its own relevant risks associated with it. This includes cash! Of course, not all risk is created equal either. Some of the risk factors are detailed in other topics here. As a financial expert, I take time to get to know my clients to determine their comfort with risk. Make sure to take time to consider all of the risks of each asset.
What kind of returns does the asset generate?
How will each of your assets grow and/or generate income? This goes along with the issue of risk since an increase in return potential also generally means an increase in risk.
How much experience do I have making investment decisions?
Certain assets require greater oversight. Do you want to take on the responsibility of managing investments that your spouse has handled in the past? Do you feel comfortable working with a financial advisor if you don’t have the knowledge?
What is my life expectancy?
According to the Social Security Administration, the average life expectancy of a 65-year-old man is 84.3 years and the average life expectancy of a 65-year-old woman is 86.6 years. How long do you need your assets to last? If you think you may have a good long life ahead of you, it’s important to plan for it. For example, are you considering a pension as one of the assets you’re dividing? The lifetime income could be a critical component of your financial plan. Alternatively, your medical history may lead you to believe that the pension may be significantly more valuable to your soon-to-be-ex.
There is no one “right way” to divide assets in a divorce. The key is to think about what you want and what you will need moving forward and go from there. If you are not sure where to start, contact me for a no-cost consultation. Remember, you only have one chance to get your divorce settlement right for you.
I am thrilled to welcome Rita Abdallah as a guest blogger. After meeting Rita and discussing the challenges faced by those going through a divorce, we agreed that the issue of “speaking up” is an important and relevant topic for our readers. What I enjoyed most about Rita’s post is that she addresses not only the importance of speaking up but also how to do it in a healthy and productive manner. Rita’s insight into how to speak up is key to communicating during divorce.
by Guest Blogger, Rita Abdallah, LISW-S, LCSW-C, ACSW
Harassment and sexual assaults in the workplace dominate today’s news headlines. It has become a never-ending cascade of revelations blaring abuse of power accusations. It is disturbing to learn of the many high-profile producers, stars and TV news anchors who have misused their power and influence. Each story offers us the same important invitation: “Speak up, speak truth and demand accountability.”
The importance to speak out can be applied beyond moments of violence, assault and harassment. Before we find strength in talking about these bigger issues, we must first flex our vocal muscles in everyday encounters. When we are able to speak from a place of calmness, clarity and confidence we build the courage and resilience to manage our other relationships in healthy ways. Read: Developing a Strong Spirit.
How do we speak up?
Let’s understand that emotional responses -our own and others – provide valuable information. They are, however, not a platform from which to communicate. Otherwise, we will end up regretting how we handle conversations in the “heat” of the moment. Maintaining “equilibrium within” allows us the chance to slow down and find a “measured place” versus ramping up negative energy leading to a blowout.
We don’t have to mimic others in the same way they express themselves. The beauty of listening with the heart – not from the head that wants to interrupt and take over – is an increased ability to sort out and tune into the message behind the words and gestures. In this way, we maintain power and dignity, as well as find inner guidance to provide us the necessary clear words and non-combative energy.
Speaking up requires getting in touch with what we value most: our own true selves. When our egos get in the way, we cannot be genuinely compassionate and understanding. Conversations instead revolve around winning and attacking others. We can’t see the bigger picture of why we committed to this partner, friend and co-worker. We lean towards subjecting our dearest friend or associate to our rage, judgment and bad feelings.
Speaking up is synonymous with showing up. The practice of life is about moving forward, falling down and getting up again. We reach for tools like curiosity, wonder and excitement as fuel. Another powerful tool is to be present – not flee – in times of pain, crisis, conflict, and struggle. It is so tempting to walk away from discomfort and confrontation. But if we can fuse and focus our minds and hearts to seek solutions, the outcome will predictably be better every time.
What if we don’t speak up?
When we withhold truth and forgiveness we feel lost and out of sorts. We may even subconsciously see ourselves as weak. Our self-worth begins to deteriorate slowly but surely. All parties will lack a coherent understanding of how to move forward.
If negativity persists perceptions about the “state of the relationship” take over. Once judged as thriving, it’s now barely surviving. During gaps between conversations, unhealthy choices and behaviors insert themselves. Sadly, they offer phony solutions to the changed and radically altered circumstances.
Rather than take a step back to reflect and get a fresh take on a situation, we avoid. Avoidance might look something like:
We schedule commitments so we don’t have to interact with the other person;
We take on new projects so we can claim we don’t have time to meet up and talk for more than five minutes;
We swap-out existing priorities with ones which keep us invisible, distracted and distant.
Substance-use is common for many seeking relief from the intensity of speaking up. They mentally anticipate the worst or more of the same, and so they self-medicate their anxiety and depression. Some even tell themselves they do a better job of expressing and managing feelings while under the influence of alcohol or drugs.
The silent treatment is a course of inaction wherein nobody wins. The one initiating silence harbors negative emotions and is overwhelmed and uncertain about their future role in the relationship. Other communication may have been attempted without satisfaction. For the one on the receiving end, this draining tactic supplies no feedback or resolution plan.
Who doesn’t like to complain and gossip when they are hurting or confused? For some reason, we want to be right all the time. Most people use gossiping and complaining as a primary mechanism for feeling better about themselves. If our adversarial partner/friend/co-worker doesn’t agree with us or we have reached an unfortunate impasse in the relationship, we look to the outside “world” to justify our position.
Although we inhabit a social landscape where gossiping and complaining is a typical behavior, it is a poor choice. It erodes trust and creates unnecessary hurt and suffering. It’s one thing to seek out professional help to deal with a situation or learn communication techniques. But if we’re in the business of telling people how wrong someone is, making up false stories or picking on someone in public, we are heading for troubled waters.
Where to go from here?
Identify your feelings without judgment of the person as best you can.
Prioritize your agenda. If you are able to communicate just one thing, consider it a good day. Two things? It’s a great day.
Set a time limit for a discussion and focus on one or two topics at most.
Formulate a simple and achievable action plan.
What words can we use in tough times?
Hurting: “I am not okay.” “I am hurting.” Something doesn’t feel right.”
Confused: “Help me understand.” “Can you say it another way?”
Shocked/Surprised: “I need a minute before I can respond.” Breathe or touch your toes. The chemicals in your brain respond and can quickly return you to a calm place.
Screaming*: Put physical distance between you and the other person. Remain calm and quiet; try not to shut down but to stand in a confident stance. Use your eyes to tell the other person you are listening but are confused at the outburst. After the person is done speaking, try these options:
“Can we regroup in an hour? I need time to respond to what you’ve said.”
“Please don’t talk to me this way. I really want to hear what you have to say and that tone of voice overwhelms me.”
“I’m going to walk away if you don’t stop yelling. Your behavior doesn’t feel right. I don’t feel safe.”
“Why are you yelling? I better understand when you speak with a lower tone of voice.”
“I don’t feel safe and need a minute.”
*Call a trusted friend or 9-1-1 if you need help.
About the Author
Rita is the Founder of Turning Point Services, Ltd., where she researches, writes, consults, and speaks on topics that support individuals, groups and cancer-care professionals. She joyfully delivers presentations to organizations that want to motivate staff and build human potential.
An authority on the topics of happiness, self-care, grief recovery, cancer wellness, cancer survivorship, work-life balance, and conquering the challenges of change, Rita’s helps people express and expand the inner voice.
As a Wellness Coach, clients seek Rita for very personal help and guidance. Her intuitive services such as Angel Readings, Spiritual Clearings and Intuitive Readings have brought greater awareness and comfort to clients.
Rita is the author of “Nurturing Spirit through Complementary CancerCare” for the Clinical Journal of Oncology Nursing. She is also co-author of other clinical oncology articles. Rita has also published writings in Elephant Journal.
A co-founder of the non-profit, Destination Hope, Rita has been instrumental in promoting the art of positive living through humor, support and knowledge for individuals touched by cancer.
Rita holds a Master’s degree in social work from the University of Connecticut School of Social Work and an undergraduate degree from John Carroll University.
She is an Ohio Licensed Independent Social Worker (LISW-S), Maryland Licensed Certified Social Worker-Clinical (LCSW-C) and member of the Academy of Certified Social Workers (ACSW).
Dividing pensions in a divorce can be confusing. For starters, some clients that I see are often confused (even after negotiating their divorce settlement) regarding what type of retirement account(s) that they have. In this blog, I am referring specifically to defined benefit plans. Defined benefit plans are retirement plans where the employee spouse has earned a monthly benefit, which will be paid out once s/he retires. In some divorce cases, the employee spouse and his/her former spouse agree to divide the future benefit via a Qualified Domestic Relations Order (QDRO).
Unfortunately, most settlement agreements that I see where pensions were divided do not adequately address the options allowed by the defined benefit plan. To be clear, the options are not consistent across all plans. Thus, it does take some research to know what the options are before they can be considered. The easiest way to avoid some very common mistakes is to request a copy of the plan summary document and written Qualified Domestic Relations Order (QDRO) procedures prior to negotiating the details regarding how a plan will be divided. One commonly missed issue is whether or not there will be a shared interest or a separate interest in the divided pension. Why does it matter? There is a big difference!
There are many pensions that do not require the former spouse to wait to start taking the pension until the employee spouse is retired. Under a separate interest QDRO, the benefit for the former spouse is “separated” from the employee spouse’s benefit. This means that the portion of the pension benefit that is awarded to the former spouse is actuarily adjusted for the life expectancy of the former spouse. Thus, if using the separate interest approach, electing a joint & survivor annuity should not be required by the employee spouse as part of the settlement agreement. The former spouse will already be eligible for survivor benefits based on the separate interest if s/he is predeceased by the other.
Additionally, the former spouse is able to make his/her own decisions regarding the timing and form of the benefit. For example, one spouse could take a lump sum distribution while the other may elect to receive the monthly benefit. Neither choice has an impact on the other spouse’s benefit. Each spouse is still bound by the rules of the plan administrator (in terms of timing and form of the benefit).
On the other hand, the timing and form of benefit are determined by the employee spouse under a shared interest Qualified Domestic Relations Order (QDRO). The former spouse receives their benefits at the same time as the employee spouse. It’s important to note that a shared interest QDRO is the only option if the employee spouse already started receiving pension benefits. Should the former spouse predecease the employee spouse, the benefit amount reverts back to the employee spouse. However, if a joint & survivor annuity was not elected when determining spousal benefits, if the employee spouse predeceases the former spouse, the benefits to the former spouse would cease. In some cases, this may not be avoidable. Regardless, it’s important to fully understand for informed negotiating and financial planning.
If you need assistance understanding your options, contact me for a no-cost consultation. It does not have to be confusing. With clear information and guidance, you can feel confident that you are making informed financial decisions.
February is known as “Divorce Month” and kicks off what is known as “Divorce Season”. Do you know your divorce options?
The holidays are over; the decorations are down and now it’s back to reality. Unfortunately, the reality is you and your spouse face another difficult, unhappy Valentine’s Day which will likely be followed by another awkward angry summer vacation, and then the holiday grind all over again. You don’t want to do this another year. You had a terrible holiday season and now you feel like you are starting this all over – and you just can’t do it anymore.
So, what do you do?
This is the time to do some soul-searching.
Realize the realities of divorce.
You once loved your spouse, you chose this person for a reason. Is there work you can do to rekindle that feeling? Feelings follow actions. If you can act again like you did when you were dating, your feelings will likely change. Some people are willing to do this, some aren’t.
Know that you are still tied to this person if you have children with them – forever.
You won’t be married or live in the same home, but you will always share your children, you will still raise them together, be there for graduation day, see them get married and be there when they have grandchildren – you just won’t do this together.
Still wanting a divorce?
Then determine which action you think is best for you. Most people’s default response is to call an attorney and start a war. This is one of the most expensive divorce options. There are other options.
Explore which option is best for your divorce.
You have the kitchen table approach, mediation, collaborative divorce, and litigation. Whatever you decide, take the time to do your research. Explore all your options, ask all your questions. You only have one chance to get this right. Be sure you secure your financial future after divorce.
About the Author
Denise French is the founder of the Divorce Strategies Group. She is a 21 year veteran financial professional, a Certified Divorce Financial Analyst, a Chartered Retirement Planning Counselor, and a trained family and child custody mediator. Denise has the personal experience of walking through an ugly divorce in 2007 and overcoming many obstacles. Now as a remarried mother of 2 children and 3 stepchildren, Denise strives to help others walk through divorce with hope, encouragement, and strength.
It’s not like you go into your marriage planning for a divorce. Once one spouse (or both) determines that their marriage is over, it often takes years to fully accept and move toward legally ending it. However, that timeline might speed up this year for many. It’s a result of the recent tax reform eliminating the deduction for spousal support.
Tax Reform & Divorce
When tax reform was passed in December, the tax deduction for spousal support (alimony) was eliminated. However, for marriages that are terminated by December 31, 2018, the tax deduction will be grandfathered. After that, there will be no more deduction for spousal support. Like the way child support is currently treated, it will be tax neutral to the payor and to the receiver.
For marriages where there is a large discrepancy in income between the two parties, this could mean a lot less income to go around. It could also mean that the payor will be agreeable to a much smaller amount of spousal support. Don’t misunderstand. This is not a negative for one party or the other. It is negative for both. Less income to go around generally means less income for both parties (not one of the other). This could be particularly tricky for those who are duking it out in court as the timeline is not in their control.
I’ve always been a proponent of a dissolution when at all possible and this just further showcases the greater control a couple has when choosing to file for dissolution rather than a divorce. For more information about the difference between a divorce a dissolution, check out my blog post on the topic. Does a dissolution mean that you must be in full agreement regarding how your case will be settled? Absolutely not. You still have options to get the professional support you need to reach an agreement while maintaining greater control over your timeline.
Maintain Greater Control In Your Divorce
Mediation is a great option for those who need someone who can facilitate the conversation between the parties. If there are complex financial issues that need to be addressed, I recommend using a mediator who is also a Certified Divorce Financial Analyst (CDFA), who can serve as a Financial Neutral.
If you would like to have your attorney at the table representing you, consider a Collaborative Divorce. The Collaborative Divorce process entails a series of meetings. At each meeting, the attorneys who represent each of the parties, alongside their clients, work through a structured agenda to come up with a settlement that meets everyone’s needs. A Financial Neutral may also be involved to provide unbiased financial analysis. Other team members could include a Parenting Coordinator and/or Communications Coach. The team is designed to meet the needs of the parties who are ending their marriage. The Collaborative approach is a great way to make sure the parties have the information and support they need. That way they can make the best possible decisions for themselves and their families.
Regardless of how you choose to move forward, know that there are ways for you to maintain greater control during the divorce process. And, if you might be seeking or paying spousal support, you may want to run the numbers to see how much the change in the tax treatment of spousal support could impact you. If you need assistance with this, contact our office.
Parenting is a tough job in the best of circumstances. Shared parenting after a divorce is a whole different ballgame. When I first went through my divorce, dealing with the most basic kid issues felt like preparing for battle with my ex again and again. It was exhausting. Quite frankly, I did not want to contact him every time I received information from the school or one of the kids was invited for a playdate or any other issues that regularly arise.
I first learned about OurFamilyWizard at a conference for divorce financial analysts and as soon as I started learning about the features and benefits, I was sold. (Please note, while I promote very few services, this post does include affiliate links.) I was further impressed by how widely the app is accepted by the courts.
OurFamilyWizard is an app that is designed specifically for people like you who are co-parenting with their ex. It is designed for parents who care deeply about their children. It is designed for people who don’t want their kids to be stuck in the middle of a constant battle. Features include things like a shared parenting calendar, an expense log, and even a directory of information such as phone numbers for doctors, teachers names and contact information, etc.
If you are thinking that there are lots of apps that can track those things, you are right. However, this one is designed specifically with you in mind. Many courts actually recommend it and some even order its use because it is a great source for documentation. The company has been able to show that families who use OurFamilyWizard are less likely to return to court as the tool helps parents to resolve their own parenting-related problems.
As parents, we have to continue to communicate well after the divorce is finalized. Shared parenting can be a source of a lot of angst if you are already having difficulty getting along. Even if you are getting along well, OurFamilyWizard creates a transparent structure for communication and information sharing so you can avoid future miscommunication. It limits the need for texting, which can often lead to miscommunication. Additionally, the courts can monitor all of the communication, if necessary. Just knowing that someone is monitoring communication has a way of improving individual’s behavior in his/her communications. OurFamilyWizard takes it one step further by having a Tonemeter to assist in improving the tone of communications. Let’s face it. It’s often the “tone” of a message that can escalate an issue.
If you want more information, take a minute to check out their website. You’ll be glad you did.
Divorces have a reputation for being messy and pitting couples at each other’s throats. Much of the controversy surrounding divorces stem from the allocation of assets and other financial concerns. You can reduce the associated stress when you use a Financial Neutral in collaborative divorce cases.
What is a Collaborative Divorce?
A collaborative divorce is a divorce process where each party is represented by an attorney that has been trained in the collaborative process but rather than taking a specific position, the parties and their attorneys work together to come up with solutions that are in everyone’s best interests. There is an agreement not to go into litigation. If the collaborative divorce doesn’t work out, then the parties can choose to go for litigation but are required to hire new attorneys that were not involved in the initial collaborative agreement. That’s a big incentive for everyone to keep moving forward toward an agreement.
As part of the collaborative divorce process, neutral specialists are frequently consulted to provide relevant information, so the parties can make informed decisions. For example, a mental health professional could be consulted to give advice relating to the welfare of the children. There could also be a Financial Neutral who provides financial education and analysis around key financial issues.
Who is a Financial Neutral in a Collaborative Divorce?
A Financial Neutral is a financial expert, who is usually a Certified Divorce Financial Analyst (CDFA), meaning the individual has extensive education in the financial and tax implications of financial decisions made during a divorce. The Financial Neutral provides educational and informational advice that will enable the parties to make wise decisions about their assets and their cash flow.
Clients may begin the collaborative process by first engaging the collaboratively trained neutral professional or by first retaining collaboratively trained attorneys. If the Neutral is hired first, both parties must agree to the same professional as the Neutral is hired jointly. To prevent any issues of bias, the Financial Neutral cannot have worked for any of the parties in the past. For example, the parties should not hire their financial advisor or tax accountant. The Financial Neutral also agrees not to work for either of the parties in the future.
It is worth noting that the Financial Neutral does not have to be someone local. Many, including Great Lakes Divorce Financial Solutions, are offering their services virtually. Meeting with your Financial Neutral virtually can be a convenient and cost-effective solution.
The Benefits of a Financial Neutral
The following are some of the reasons why you should hire a Financial Neutral for your collaborative divorce case.
In traditional divorce cases, the couples each hire a separate financial expert to give them advice on financial matters such as business valuations, separate property tracing, dividing assets, etc. With a Financial Neutral, the couple jointly hires a financial advisor, reducing the costs that they would otherwise incur if they hired separate advisors.
Helps Parties come to a mutual Financial Settlement
With a Financial Neutral, the parties work together to come to an agreement regarding their financial assets. Since the Financial Neutral is working for both parties, the focus is identifying a balanced financial settlement that is mutually beneficial to the parties.
A lot of people depend on their attorneys to advise them on financial issues like taxes, and the IRS. Attorneys might have gotten experience on these issues over the course of their practice. However, this isn’t their expertise and as such, they might not be as knowledgeable as you might want.
The Financial Neutral helps the parties collect financial data that would be relevant to the eventual settlement. This would involve things like preparing a report on the assets, income, and debt of the parties. The report is usually supported by backup documentation the spouses provide. The Financial Neutral also helps couples come up with current and projected budgets that can help guide further discussions about support.
Identify and Analyze Future Child Expenses
In a divorce where there are children involved, the Financial Neutral can help the couples identify future expenses related to childcare. For a lot of couples, funding the child’s post-secondary education is usually a major issue. The Financial Neutral can advise the couple on their options for financing their child’s post-secondary education.
Financial Modeling and Projection
The Financial Neutral considers not only the short-term implications but also the long-term implications of financial decisions and creates various models for property division, maintenance, and child support. The parties are then at liberty to choose which of these models suit their own unique needs.
Often times, individuals are concerned about how the divorce affects their retirement and future financial situation. To remedy this, the Financial Neutral can prepare long-term financial projections for the parties. This way, they would be able to see how the divorce affects their finances in the long term.
Offering Financial Input in Settlement Deliberations
During the team deliberation, the Financial Neutral in collaborative divorce cases will chime in with the relevant financial information. S/he can inform the deliberators of how certain assets appreciate or depreciate over time as well as how taxes affect the decisions the parties want to adopt.
There is also less financial conflict at this stage since the Financial Neutral works for both parties. This is compared to a situation where there are two diametrically opposed financial experts trying to fend for their individual client. In the end, the parties merge the Financial Neutral’s advice with the legal advice of their attorneys, leading to a more sophisticated and nuanced divorce settlement.