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November 1, 2016
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Is Mediation The Right Path?

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Separation or divorce bring about financial, emotional and physical changes for the couple divorcing, and for their families.  How to divide assets, how to arrange future finances, where will the children live, and how should the children be parented and nurtured are just a few of the critical issues which need to be addressed.  As a result, stress and conflict inevitably will occur.  But, the way in which these conflicts are approached and resolved can greatly influence how easily the couple and the family adjusts to the new reality.

This is where mediation can be extremely valuable.  Conflict need not be crippling, nor generate long-term animosity if it’s handled in the right way.  Mediation is a way for members of a family to resolve conflicts in the midst of, or after, a separation or divorce.  At a time when emotions of fear, anger, or hurt may be running high, it is possible to rationally come to an understanding where the interests of all individuals involved are valued and balanced.

Mediators meet the divorcing couple in the middle and stand as a neutral professional.  By clearly defining the causes behind the conflict and keeping the lines of communication open, they promote rational conversation and look for agreeable resolutions.  They work with the couple, and with the children when they are old enough for that to be appropriate, to find the best possible solution.  However, in order for mediation to work well, all participants must be willing to put in an earnest effort towards finding a solution. Will mediation work for your family? Below are some common questions and answers to help you decide if this is the best option for your family.

What does mediation entail?

The role of the mediator is to help people in conflict reach a solution to their problem by finding an outcome that all parties accept.  During the process of mediation, the mediator acts as a neutral member by avoiding taking sides, making judgments, or giving guidance.  Their role is to keep the lines of communication open by allowing all parties a chance to be heard, thus reducing hostile competitive feelings.  Mediators may suggest solutions, however, any and all agreements are made by the members of the family.

What types of disputes are best resolved through mediation?

Mediation is often helpful for couples experiencing conflict during and after a separation or divorce. Mediators can be especially beneficial in the area of parenting by helping mom and dad to understand the needs of the children involved and to determine what is in their best interest.  Mediation is also useful when trying to reach an agreement about the division of property and the allocation of future earnings.  A dispassionate perspective as well as a deep experiential base gives the mediator the tools which most divorcing couples don’t have.  Most people who divorce haven’t done it before and don’t have any experience or expectation on which to rely.  A good mediator has years of experience handling dozen of cases and brings all that knowledge to the table.

Do both parties have to participate?

Yes.  In order for mediation to be a successful process, both parties must realize this is a joint, cooperative problem-solving process and be willing to participate.  Participants must be willing to work together to find a solution that best fits their interests, their spouse’s interests, and of course the interests of any children who are involved.

Will mediation help us get back together?

While feelings about the marriage and separation or divorce may be discussed, mediation is not couples counseling.  The primary focus of mediation is to find solutions that will assist the family members in adjusting to the separation or divorce and to be able to work together to confront future issues as a family. Any doubts about the separation or divorce should be discussed separate from the mediation, perhaps with a counselor.

Are children involved in the mediation process?

Children may participate depending on the topic of discussion, the wishes of their parents, their own wish to participate and their age or maturity level.  It can be comforting for children to see their parents having a constructive conversation that allows them to work together instead of fighting or competing.  It also may be beneficial for parents to involve teenage children in order to better understand their needs and feelings.

Do I need an attorney?

Mediation is not a substitute for legal advice and each participant should be given a chance for his or her agreement to be reviewed by an attorney of their choosing. While the mediator assists participants in reaching their own agreements from a neutral standpoint, lawyers help their clients make informed agreements, understand the law, and complete the legal aspects of the divorce or separation.

Are mediation agreements legally binding?

Mediation agreements can either take the form of an informal working agreement or can be filed as a legal contract.  An agreement made through mediation becomes legally binding when it is incorporated into a court order or divorce decree.  If an agreement previously approved by a judge is to change, it must be filed with the court in order for the change to be legally binding.

What if we cannot come to an agreement?

Mediation may not solve all conflicts between parties; however, even small agreements can be beneficial in the long run.  Mediation can help direct the conversation and narrow down the issues which may require an attorney to solve.  Accordingly, even if mediation does not solve all conflicts, it can reduce the time and legal expenses.

How much does it cost?

Mediation services through a court are typically provided for a small user fee.  Private mediation practices charge an hourly fee which can be split between the parties.  Again, even a private mediator will typically cost less than litigation.

Where can I find a mediator?

Professional mediators in your community can be found through your local bar association, in the telephone directory yellow pages, or through a referral from a family lawyer.  Court-connected services can also be utilized for advisement on the various types of mediation services available to the community.

When is mediation not a good idea?

As stated earlier, mediation is most helpful when both parties are willing to work together and psychologically capable of following through with the agreements they reach.  When there are concerns of abuse, domestic violence, drug or alcohol addictions, or mental illnesses, mediation may not be the best choice. Additionally, if the pain, hurt and anger are so deep that one or both parties cannot commit to dealing rationally with the process and with one another, mediation will be of little value.

Concluding Thoughts

Conflict during a separation or divorce is normal;  very few, if any divorces are totally dispassionate.  There is almost always an emotional component, and there is always a difference of opinion, otherwise there wouldn’t be a divorce.  With differences and emotions come conflict.  But conflicts do not need to inflict greater pain, and they can be resolved peacefully.  If a couple who is separating or divorcing can commit to working things out so that everyone’s interests can be voiced, addressed, and met to the greatest possible degree, then mediation becomes a very powerful tool.  In such situations, the benefits can be enormous, both during the separation or divorce period, as well as into the long-term future.  This is never more true than when children are involved.  A couple may cease being husband and wife, but they will never cease being mom and dad.  So, if at all possible, mediate before you litigate.

 

October 13, 2016
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5 Money Truths for Women

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We all know that life is more complicated than it was in our grandparents’ day.  That’s true across the spectrum of life’s issues, but it is especially true in the area of money and finances.  Today, there are fewer guaranteed options to rely on and vastly more financial decisions to make.  Just a couple of generations ago, investment choices were primarily limited to choosing between stocks and bonds.  Today, we are presented with mutual funds, ETFs, master limited partnerships, annuities, and variable universal life insurance, just to name a few.

It’s no wonder that so many of us are left feeling overwhelmed.  However, just a few basic principles can bring a little clarity to the confusion.

Truth #1: Wealth Is Not Bad

What do you think of when you hear the word “wealth”? The popular media today often portrays wealth in a negative light. The wealthy are portrayed as not paying their fair share, as being greedy, or as taking advantage of others. However, this interpretation of wealth is not accurate.

Wealth, as properly understood, is the accumulation of resources beyond your current needs.  Whatever your financial goals, you will need to spend less than you make (generate a surplus), save that surplus, and invest it so that it will grow to a level which will fund those goals – retirement, college for the kids, your next house, etc.  Simply put, you need to build wealth.

If you have a preconceived notion that building wealth is bad, or if you see it as synonymous with being greedy and selfish, you may subconsciously sabotage your financial future.  You won’t make the wise decisions needed to accumulate a surplus and invest it, and you won’t accomplish your financial goals.

Truth #2: Marriage is Not a Financial Plan

Regardless of whether you are already married or would like to be married someday, marriage is not a financial plan.  All marriages will end (either through death or divorce), so it is important to develop a plan for how your needs are going to be met.  Even if you’re married now, and remain so for decades to come, you need to take an active role in developing a financial plan for how both of your needs will be met.  

Truth #3: Saving a Little is a Really Big Deal

Almost everyone has heard the proverb, “tall oaks from little acorns grow.”  Perhaps a better illustration of the power of saving and investing is found in the lesser known saying:  “The creation of a thousand forests is in one acorn.”

This is the perfect metaphor because it is a perfect example of how savings create savings.  One acorn will give rise to one mighty oak.  But to stop there is to miss the magic of the story.  The mighty oak will bear additional acorns, which over time, and with the help of the wind, rain, and scurrying animals, will be spread over vast distances.  Each additional acorn creates another mighty oak which will create more acorns, and the process grows exponentially.

This is the same sort of magic that occurs with savings and compound interest.  You save a little, and over the course of a year, you’ll earn a little interest on that savings.  But then in future years you’ll earn interest on the original savings, AND you’ll earn interest on the interest.  It compounds!  Just as one acorn begets thousands of forests, so too does saving a few dollars beget thousands of dollars for retirement.

Of course, the opposite is also true.  We skip the $10 and $50 and $100 contributions to our savings because we don’t see them as the large future amounts they really are. We don’t remember that over 20 years, $10 can become $46; $50 can become $233, and $100 can become $466.

To further illustrate the point, multiply that by twelve months of savings.  Saving $50 per month for 20 years can produce a nest-egg of $32,000.  Skip just 3 of those contributions each year, and the nest-egg potential is reduced to $24,000.   Spending that extra $150 per year (instead of saving it) can cost $8,000.  Saving a little is a really big deal.

Truth #4: There Is No Such Thing as Risk-Free

Everyone knows that the stock market is “risky.”  Stocks go up, and stocks go down.  Some stocks can lose all their value, and you can lose your money if you invest the wrong way in the stock market. However, not investing at all carries its own risk – the risk that the value of your money will not keep up with the pace of inflation (the rise in overall prices).  The risk of inflation affects every one of us, and it will always be there.

The long-term average inflation in this country is 3% per year.  That means that something which costs $1.00 today, will cost $1.03 in a year, $1.06 in two years.  That doesn’t seem like a big change, but in about 24 years the price of that item will have doubled.  If your savings are not earning enough to at least keep up with inflation, you will not be able to pay as many expenses (groceries, gas, clothes, electricity, etc.) in the future as you can today.  If you are not earning any interest, your money will be worth half as much in 24 years as it is now.

Risks have to be taken…even doing nothing is a risk.  The key is to balance the risks on both ends of the spectrum – doing nothing vs. investing everything in the stock market.  The good news is that you don’t have to find that balance on your own.  There are plenty of objective financial advisors that can walk you through that decision-making process to find the level of risk that is appropriate for you and your financial goals.

Truth #5: You Have To Start Now – Not Sometime Next Month, Year, or “Later.”

We all put off doing what we don’t want to do, what we don’t understand, or what intimidates us.  Dealing with money and finances can hit all three of those procrastination triggers.

Understanding the resources you have and the debts that you owe, building a budget, and developing a financial plan are all learned skills.  You don’t have to be “good with money” to take control of your financial future.  It requires an investment of your time, and will likely require outside advice, but you can be successful – in fact, very successful!

The time to begin developing financial security is today.  Whether you start small or start big, the important thing is to start.  If you don’t know where to start, call an objective financial planner – not one of the ones who will sell you the latest, greatest annuity, mutual fund or insurance product, but one of the ones who offer advice free from any conflicts of interest.  Most of these objective advisors will give you an hour or so, and a few pointers to get started, for free.

Carpe Diem  

There you have it:  5 money truths that will help you feel less overwhelmed and intimidated by the financial decisions that all of us face.  Though none of these truths are new, they are unknown or ignored by many.  Learning to live by them will allow you to positively impact your financial security. Ignoring them can lead to insecurity at the least, and calamity at the extreme.  Now is the time to take control and chart your own future.  Now is the time to seize the day.

February 5, 2016
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Pasadena Now Article

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DivorceHelp.org to Host Divorce Workshop for Women at Oneonta Church in South Pasadena on Saturday, February 13th, at 8:30 a.m. Following a successful inaugural event in January, the DivorceHelp.org Monthly Half-Day Workshop returns to deliver Financial, emotional and gegal advice for San Gabriel Valley Women facing divorce. Read more here.

January 31, 2016
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What Type of Divorce Do You Want?

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What Type of Divorce Do You Want?

By Jeff Landers (January 28, 2016) Excerpted and reprinted with permission from Forbes

No two divorces are the same; they are different, and to some extent you have a choice as to what type of divorce you will have. Everyone who is going through a divorce wants to have an “easy” divorce. Nobody wants to have a difficult one. But that choice is something which is largely outside your control. You can decide to be reasonable and civil, but you cannot control what your spouse will do. So instead of focusing on something you cannot control, we suggest you focus on what you can – the process you choose to end the marriage.

There are four general categories of divorce: Do-It-Yourself (DIY), Mediation, Collaborative and Litigation. Each has it advantages and disadvantages.

Do-It-Yourself Divorce

The name here is very misleading. It implies strongly that you can divorce yourself. Don’t try this. Divorce is very complicated, legally and financially. You can make mistakes easily, and they are often irreversible; once you and your spouse sign off on the divorce, the court will make that final. If you later discover something that was missed, it will be tough to make your former spouse re-open the divorce. So, please do not try this yourself, but if you insist, then at least engage a separate attorney to look over what you’ve agreed to before you sign the final document.

Mediation

In a mediation, a couple works with a neutral mediator who helps both spouses reach an agreement on all aspects of their divorce. The mediator may or may not be a lawyer, but he/she must be extremely knowledgeable in divorce and family law. In addition, the mediator needs to be neutral and not advocate for one side or the other. So, don’t you’re your “good family friend”; hire a professional. Having said that, here are some of the advantages and disadvantages:

On the “pro” side divorce mediation may:

  • Result in a better long-term relationship with your ex-husband since you will not “fight” in court.
  • Be easier on children since the divorce proceedings may be more peaceful.
  • Expedite an agreement.
  • Reduce expenses.
  • Help you stay in control of your divorce because you are making the decisions (and the court isn’t).
  • Allow for more discretion. Mediation is private; litigated divorce is public.

However, on the “con” side, divorce mediation may also:

  • Waste time and money. If negotiations fail, you’ll need to start all over.
  • Be incomplete or unduly favorable to one spouse. If the mediator is inexperienced or biased towards your husband, the outcome could be unfavorable for you.
  • Result in an unenforceable agreement. A mediation agreement that’s lopsided or poorly drafted can be challenged.
  • Lead to legal complications. Any issue of law will still need to be ruled upon by the court.
  • Fail to uncover certain assets. Since all financial information is voluntarily disclosed and there is no subpoena of records, your husband could potentially hide assets/income.
  • Reinforce unhealthy behavior patterns. If one spouse is dominating and the other is submissive, the final settlement may not be fair.
  • Fuel emotions. Mediation could increase negative behavior of a spouse with a propensity for physical/mental or drugs/alcohol abuse.

Couples often hear about the wonders of mediation and how it is reportedly a better, less contentious, less expensive and more “dignified” way to get a divorce. However, my biggest problem with mediation is that the sole role and goal of the mediator is to get the parties to come to an agreement –any agreement! Remember, the mediator cannot give any advice. All they can do is try to get you to agree. Unfortunately, not all agreements are good agreements, and in fact, in many cases, no agreement is better than a bad agreement. So unless both parties can be fairly reasonable and amicable (and if they can be, why are they getting divorced???), I believe that mediation is usually not a viable option for most women.

Collaborative Divorce

Simply put, collaborative divorce occurs when a couple agrees to work out a divorce settlement without going to court.

During a collaborative divorce both you and your husband will each hire an attorney who has been trained in the collaborative divorce process. The role of the attorneys in a collaborative divorce is quite different than in a traditional divorce. Each attorney advises and assists their client in negotiating a settlement agreement. You will meet with your attorney separately and you and your attorney will also meet with your husband and his attorney. The collaborative process may also involve other neutral professionals such as a divorce financial planner who will help both of you work through your financial issues, and a coach or therapist who can help guide both of you through child custody and other emotionally charged issues.

In the collaborative process, you, your husband and your respective attorneys all must sign an agreement that requires that both attorneys withdraw from the case if a settlement is not reached and/or if litigation is threatened.  If this happens, both you and your husband must start all over again and find new attorneys. Neither party can use the same attorneys again!

Even if the collaborative process is successful, you will usually have to appear in family court so a judge can sign the agreement. But the legal process can be much quicker and less expensive than traditional litigation if the collaborative process works.

Unfortunately, though, I have found that the collaborative method often doesn’t work well to settle divorces involving complicated financial situations or when there are significant assets. In collaborative divorce, just as in mediation, all financial information (income, assets and liabilities) is disclosed voluntarily. Often the husband controls the “purse strings,” and the wife is generally unaware of the details of their financial situation. When this kind of inequality exists, the door is often wide open for the husband to hide assets. What’s more, many high net worth divorces involve businesses and professional practices where it is relatively easy to hide assets and income. Additionally, the issue of valuation can be quite contentious.

So . . . as a general rule, my recommendation is this:

Do NOT use any of these first three options –Do-It-Yourself Divorce, Mediation or Collaborative Divorce — if:

  • You suspect your husband is hiding assets/income.
  • Your husband is domineering, and you have trouble speaking up or you’re afraid to voice your opinions.
  • There is a history or threat of domestic violence (physical and/or mental) towards you and/or your children.
  • You or your husband has a drug/alcohol addiction.

Litigated Divorce

The fourth divorce option is the most common. These days, the majority of divorcing couples choose the “traditional” model of litigated divorce.

Keep in mind, though, “litigated” does not mean the divorce ends up in court. In fact, the vast majority of all divorce cases (more than 95 percent) reach an out-of-court settlement agreement. “Litigation” is a legal term meaning ‘carrying out a lawsuit.’

Why are lawsuits a part of divorce? Because contrary to popular belief, divorce usually does not involve two people mutually agreeing to end their marriage. In 80 percent of cases, the decision to divorce is unilateral  – one party wants the divorce and the other does not. That, by its very nature, creates an adversarial situation right from the start and often disqualifies mediation and collaborative divorce, since both methods rely on the full cooperation of both parties and the voluntary disclosure of all financial information.

Clearly, if you are starting out with an adversarial and highly emotionally charged situation, the chances are very high that collaboration or mediation might fail. Why take the risk of going those routes when odds are they might fail, wasting your time and money?

The most important and most difficult parts of any divorce are coming to an agreement on child custody, division of assets and liabilities and alimony payments (how much and for how long). Although you want your attorney to be a highly skilled negotiator, you don’t want someone who is overly combative, ready to fight over anything and everything. An overly contentious approach will not only prolong the pain and substantially increase your legal fees, it will also be emotionally detrimental to everyone involved, especially the children.

Remember: Most divorce attorneys (or at least the ones I would recommend) will always strive to come to a reasonable settlement with the other party. But if they can’t come to a reasonable settlement or if the other party is completely unreasonable then, unfortunately, going to court, or threatening to do so, might be the only way to resolve these issues.

If you have tried everything else, and you do end up in court, things can get really nasty and hostile. Up until that point both attorneys were “negotiators,” trying to get the parties to compromise and come to some reasonable resolution. But once in court, the role of each attorney changes. Negotiations and compromise move to the back burner. Their new job is to “win” and get the best possible outcome for their client.

And don’t forget, once you’re in court, it’s a judge who knows very little about you and your family that will make the final decisions about your children, your property, your money and how you live your life. That’s a very big risk for both parties to take –and that’s also why the threat of going to court is usually such a good deterrent.

Here’s my last word of advice about divorce alternatives: Weigh divorce options carefully. The bottom line is that every family, and every divorce, is different. Obviously, if you are able to work with your husband to make decisions and both of you are honest and reasonable, then mediation or the collaborative method may be best. But, if you have doubts, it is good to be ready with “Plan B” which would be the litigated divorce.

November 12, 2015
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10 Things Every Woman Should Know About Getting Divorced

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Learn what to expect and how to cope with one of life’s most difficult events

By Sherry Amatenstein, LCSW (June 9, 2014) Reprinted with permission from Women’sDay.com

(All names and locations of women interviewed and quoted have been changed)

We all know and can imagine that divorce is difficult. But rarely do we get it told to us straight just how hard it really is. Should you trust your ex? Will your mother-in-law stop speaking to you? Are there any upsides? From experts as well as women who’ve been through it and survived, here are 10 things every woman should know.

  1. Don’t forget to grieve. Even if you initiate the divorce, you will experience sadness.A lot. Emma Johnson from New York City who has a radio show about being a single mother puts it this way. “Even if you know deep down the divorce is the best thing for all parties involved, it is still a loss—a lost love, lost relationship, lost dream that you had when you married and a lost vision for what you wanted your family to look like. My divorce rocked me to the marrow of my bones. If you deny yourself the opportunity to feel this pain, you will never fully heal.”
  2. You will outgrow your married friends. Divorce is so wrenching, it’s understandable why you will want every other relationship in your life to remain the same. But that’s not always possible or desirable. Chrystie Vahon from Portland, ME recalls, “I suddenly found myself distancing from my married friends and them doing the same. Being around them reminded me of my own failed relationship and being around me made them feel guilty for being happily married.” Spending time with other women who have been through the specific pain of divorce can be very healing.
  3. Your ex does NOT have your best interests at heart. No matter how much of a nice guy he is and how concerned he seems that you be taken care of, his main concern is himself. It is essential to get a sharp lawyer who is on your side. Tammy Olmes from Englishtown, NJ, cautions, “because I trusted my ex, I agreed to a mediator instead of getting a lawyer who would have insisted I get everything I was legally entitled to. Don’t think emotionally. You can always relent later, but if you’re too lenient in court you can never get back what you gave up.”
  4. Therapy is mandatory. This is a tumultuous time for you and it’s helpful to avail yourself of what can be gained by seeing a professional. KJ Greenwood from San Diego, CA, says, “Initially I bought into the stigma that therapy was for crazy people. But after finally seeking out a therapist, I’m a much better person than I would ever have been without.” Again, it’s important to gothrough the painful experience, not try and find ways around it.
  5. Avoid a serious relationship for at least two years. Yes, you’re afraid of loneliness but getting back into a relationship right away is just a distraction from the pain and self-evaluation that it is essential. Trina Wang from Poughkeepsie, NY, says regretfully, “The rebound thing is real. I was so afraid of being alone that I fell almost instantly in love. The bubble popped after six months and the man I was involved with got terribly hurt. I just wasn’t ready.”
  6. Your lawyer is not your marriage counselor. He or she may act like your best bud, but don’t forget that there is an hourly rate. This is a business arrangement. Need more convincing? Michael Stutman, President of the Academy of Matrimonial Lawyers, reveals, “Some high-end attorneys will intentionally draw out your case in order to increase the fee.”
  7. Cut all financial ties. It’s not enough just to close out the joint checking and savings account. Do a thorough investigation about what assets the two of you hold together. Julie Browne from Denver, CO, says, “Several years after my divorce, I had a delinquent timeshare payment pop up on my credit report, for the timeshare he had kept in the settlement.” Since her name was still listed, she started receiving collection calls and her credit took a hit.
  8. Suddenly you will have lots of free time.When you’re married with kids and jobs, the one thing you rarely have is a moment to yourself. That changes after divorce. Joan Hilton from Grand Rapids, MI, says, “Sharing custody with my ex was one of the biggest life-changers I’ve ever had. On the weeks my 15 and 10 year old are with their dad, I get to go to my book club, go dancing, work out and I’m starting a new business—it’s awesome.” Initially there was some guilt about not missing her kids enough but eventually she came to a great realization: “We don’t need to be together constantly to know we love each other.”
  9. You also divorce his family. When you marry someone, you marry his family. The opposite is true as well. Browne says, “When my ex-husband and I split, I kept in touch with his mom, who I’d become very close over 7 years of marriage. Two years after the divorce she suddenly stopped communicating with no explanation. That was harder than losing my ex.”
  10. You will eventually feel better. It probably feels like the torment and fighting and crying will never end. But there is light at the end of the tunnel. Christina Pesoli from Austin, TX, and author of the upcomingEmotional Hardbody says, “Getting through the first round of significant holidays, and the first summer when my children were gone for significant chunks of time, was really brutal. But after that things really do get easier.”
November 12, 2015
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How To Keep Divorce From Ruining Your Credit

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By Jenny Staton – Lender Direct Sr. Loan Consultant

Not only can divorce lead to emotional strain, it can also cause all sorts of financial problems. All those shared accounts and co-signed loans that once seemed so romantic are now the cause of major issues. The following important tips can help avoid financial damages due to a divorce.

Creditors aren’t interested in how property and bills are divided during divorce. If you have debt in joint accounts with your spouse, you are both responsible for paying it back.

Creditors are not legally bound to abide by your final decree of divorce. A judge’s order does not override what you owe your creditors and most attorneys don’t alert their clients to the potential for problems if one spouse does not follow the court order. Below are some tips that will help keep divorce from ruining your credit.

Allow One month to make these changes:

  1. CLOSE JOINT ACCOUNT:
    Before you separate when possible, close all joint credit accounts. Closing them before divorce proceedings will keep an angry spouse from using the account and running up charges that you may later be held responsible for.
  2. GO FROM JOINT ACCOUNTS TO SEPARATE OR INDIVIDUAL ACCOUNTS:
    You should seriously consider turning all credit cards, gas cards and any retail accounts into individual accounts. Doing this will mean not having to re-establish credit in your own name after the divorce because you will already have it. It can also cut down on the amount of friction once the divorce process starts.
  3. SETTLE WITH CREDITORS:
    Offer to close the accounts by paying a smaller amount than is owed. If this is done, get a letter from the creditor that the account has been paid in full and a written promise that they will not file anything derogatory about the account to the credit reporting agencies.
  4. FREEZE ACCOUNTS:
    If you are not able to pay off or come to a settlement agreement regarding the balance owed this would be your best move. This will keep you from being able to use the account but will also protect you in the long run. Once the divorce is final, the balance owed on the account can be transferred to the party the court holds responsible for the debt. If the responsible party does not pay the debt then you don’t have to worry about it affecting your credit score.
  5. CONTACT YOUR CREDITORS:
    Alert them to the fact that you are going through a divorce. If there is a change of address, make sure they know it so that you will continue to receive bills from all joint accounts.
  6. MAKE SURE ALL BILLS ARE BEING PAID:
    Divorce proceedings can take months and all it takes is one late payment to hurt your credit. Even if you have to pay the minimum on accounts that you know will ultimately be your spouses responsibility it will be worth it.

If you have additional questions on what you should and shouldn’t do when it comes to your credit be sure to check with an attorney or financial adviso. Laws do change, so make sure you know what your options are should it come to the point where divorce is inevitable.

November 12, 2015
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Divorcing After 50: What You Need To Know

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Reprinted with permission from Fidelity.com’s viewpoints 3/13/14

For people over 50, the divorce rate in the United States is on the rise. Just one in 10 people who divorced in 1990 was age 50 or older; twenty years later it was one in four, according to Dr. Susan Brown, professor of sociology at Bowling Green State University and co-author of “The Gray Divorce Revolution.”1 “If late-life divorce were a disease,” says Jay Lebow, a psychologist at the Family Institute at Northwestern University, “it would be an epidemic.”

Reasons for the surge in splits vary. Increasing longevity offers more risk that couples might grow apart; the kids have grown up and moved out, taking with them reasons for staying together; more women are working, with some of them out-earning their spouses; and, there’s less stigma to calling it quits.

Whatever the reason, later-life divorce hits women especially hard. After a divorce, household income drops by about 25% for men—and more than 40% for women, according to U.S. government statistics.2 “Gray divorce can be economically devastating, especially for women who have been out of the labor force,” says Dr. Brown.

At the same time, retirement is more expensive when you’re solo rather than half of a twosome. On a per-person basis, the cost of living for singles is 40% to 50% higher than for couples, according to the American Academy of Actuaries.3 And another consequence of a mid- to later-life split is that there’s less time to recover financially, recoup losses, retire debt, and ride out market ups and downs. Meanwhile, women’s life expectancy is climbing into the 80s, meaning that they may be living longer with less.

So how can women over 50 protect their financial future when they go solo? Here are a few dos and don’ts to consider:

Seven divorce dos:

  1. Plan ahead.Careful preparation before your divorce may pay off. For instance, having a financial planner or accountant work with your divorce lawyer or mediator can help you make the right decisions about a divorce settlement that includes a more comfortable retirement.

 

  1. Gather all records.“The three most important words during divorce are document, document, document,” says Ginita Wall, a financial planner and co-founder of WIFE.org (Women’s Institute for Financial Education). Make a clear copy of all tax returns, loan applications, wills, trusts, financial statements, banking information, brokerage statements, loan documents, credit card statements, deeds to real property, car registrations, insurance inventories, and insurance policies. Copy records that can trace and verify your separate property, such as an inheritance or family gifts.

 

  1. Know what you owe.Hidden debt is a common nasty surprise among divorcing couples. In the nine states with community property laws—Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin—you’ll be held responsible for half your spouse’s debt, even if the debt isn’t in your name. You may also run into trouble in a non–community property state if you and your spouse hold credit cards or loans jointly. Get a full credit report to make sure there are no surprises on it. Annualcreditreport.com provides free credit reports every 12 months from each of the three credit bureaus.

 

  1. Document your household goods.Take photos of valuables around the house—jewelry, art, Oriental carpets, the sterling silver tea set. It’s not unheard for divorcing spouses to hide assets from one another.

 

  1. Get your fair share. Half of everything is yours—if you acquired it during your marriage—whether you want it or not. Even if you’ve always abhorred that LeRoy Neiman painting your husband insisted on buying, it can be used to trade for something you do want. If you helped put your husband through graduate school, law school, or medical school, you may be entitled to some reimbursement for the cost of his tuition.

 

  1. Keep close tabs on legal and adviser fees.What you pay your divorce advisers will come out of your settlement, so make sure you keep track of what they are spending on your behalf. Remember that your lawyer is a paid professional who is billing you at an hourly rate. Be mindful of the time your lawyer spends with and for you.

 

  1. Check Social Security benefits.Although many age-50-plus women have had successful careers, their ex’s earnings may provide a larger Social Security benefit. You are eligible to collect those benefits if you meet the following conditions:
  • You must be age 62 or older.
  • You must have been married for 10 years or longer.
  • You must not be currently married.
  • Your own earnings must not entitle you to receive a higher benefit.

And there’s more good news for divorcees. According to the Women’s Institute for a Secure Retirement (WISER), you can receive your share of your ex-spouse’s Social Security benefits without filing any special papers at the time of the divorce, and—as long as you remain unmarried—you will qualify for those benefits even if your ex marries again.4

Four divorce don’ts

1. Don’t necessarily hold onto the house. Your house may have sentimental value, but keeping it doesn’t always make financial sense, especially if it’s a stretch to pay for the upkeep and property taxes. Compared with a well-diversified retirement savings account, a home is more likely to have ongoing and unexpected expenses, and its future value isn’t assured.

divorce_donts_ver82. Don’t ignore tax consequences. Should you take monthly alimony or a lump sum? Should you take the brokerage account or the retirement plan? Should you keep the house or sell it now? Who should pay the mortgage until it sells? You may need to consult an accountant or tax adviser to determine what makes sense for your situation, and if there’s a chance that your past joint tax returns omitted income or overstated deductions, you may want to consider an indemnification clause to protect yourself in case of an audit.

 

3. Don’t forget about health insurance. If you’ve been covered by your spouse’s policy, you may face a gap in coverage after your divorce and before Medicare kicks in at age 65. If you don’t have coverage of your own at work, you can continue your spouse’s existing coverage through COBRA for up to 36 months, but your cost is likely to be substantially more than it was before the divorce. It may also be more expensive than the health care coverage you can get from your state’s health insurance exchange under the new Affordable Care Act, so it’s best to check. Couples who can’t afford new, separate health insurance policies may want to consider a legal separation instead; that way, you can keep your ex’s health insurance but separate the other assets.

 

4. Don’t immediately roll over your ex’s retirement account into an IRA. If your divorce settlement allocates assets under a qualified domestic relations order (QDRO), you can make a one-time withdrawal from your ex’s 401(k) or 403(b) without paying the normal 10% tax, even if you’re under age 59½. If you think you’ll need money for unavoidable divorce expenses, you may want to make the withdrawal rather than doing a rollover. Otherwise, if you roll the money into an IRA and then need to tap it for divorce costs, you’ll be subject to the standard 10% early withdrawal penalty.

November 10, 2015
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Make Your Child’s School Your Ally During Divorce

By | Blog

School is a second home for children. And when the true home is in turmoil because of divorce, that second home can become a refuge, or an outlet for negative feelings.

That’s why it’s important to let your children’s school know if you and your spouse go through a divorce. Forming a cooperative relationship with the school will open doors to resources that will help your child get through the process in the healthiest way possible.

Teachers – Make sure your child’s teachers know about this major change. Children are less able than adults to separate their emotions about an event. (And many of us adults aren’t great at it!) They may be feeling fear, insecurity, guilt, or any other emotion on a daily basis. This may impact their focus at school, self-esteem, friendships, and academic performance. Many children feel safe with their teachers. Teachers in the know can watch for any signs of distress, alert parents to performance changes, and offer a shoulder to the student.

Guidance Counselors – Counselors are trained to help during challenging times. Let them know so they can offer support.

Support Groups – Some schools offer special support groups for children coping with divorce. If your school does not, consider enrolling your child in a group just for children.

Be sure to talk to your child before he or she returns to school after hearing the news of your divorce. Make sure he or she is aware of any changes in routine. Let them know to whom they can speak at school if they have questions or are feeling sad.

September 10, 2015
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No-Fight Ways To Divide Property During Divorce

By | Blog

Every divorce is different, but for some, divorce is an ugly tear, and leads to disagreements about who should get what. Divorce is emotional, but when dividing property and assets, it’s best to leave emotion aside and focus on a fair split. After all, the more you can work out together, the less you spend on lawyers.

Here are several options for how to divide property during divorce:

Sale — For some, it’s easiest to sell everything, divide the money and start over.

Choose — Make a list of all marital property. Flip a coin to see who goes first, and each person takes turns choosing items.

Make a Deal — One spouse gets the car and furniture in exchange for giving up the house, for example. Work out a way to barter for things in exchange for others.

Appraisal and Choose — Have one spouse place a value on each item. The other gets to choose the items up to an agreed upon amount of the total value. For example, if you have decided to split everything 50-50, the spouse would choose what he/she wants up to half of the items.

Appraisal and Choose II — You might have a third party decide the value of items for you, and then you can take turns choosing items until you reach your set limit.

Auction/Bid — Either openly or in secret, each spouse can bid on items. Whoever bids the highest gets the item. If one person ends up with items valued at higher than his/her share of the total, he/she can pay the spouse to even things out.

Mediation — After trying one or two of the above methods without success, you might turn to a mediator to help guide you through the process. An outside party can bring the non-emotional perspective you need to fairly separate your stuff.

Arbitration — No luck with mediation? You might try arbitration. You and your spouse will present your arguments and let the arbiter decide. Beware: It’s a legally binding decision.

Want to learn more about dividing property, assets, and retirement plans during divorce? Check out our divorce workshops where an attorney, a therapist, and a financial adviser give you the straight talk on what to expect during divorce