FINANCIAL “DIVORCE SMARTS”
Divorce lawyers stoke anger and fear in their clients, knowing that as long as the conflicts remain unresolved the revenue stream will keep flowing.’ – Craig Ferguson
Even if you are not quite ready to get divorced, or know someone who might be, you need to be informed and Financially Smart.
Deciding to Divorce is a complex process. Deciding how easy or difficult the process will be depends on you and how your spouse responds. How well or ill prepared you are emotionally and financially will dictate how smooth or turbulent the divorce obstacle course will be.
Depending on the make-up of your marriage, here are 10 legal, emotional and financial suggestions with which to equip yourself so that you have (or get) “Divorce Smarts”.
Consult with an attorney and a mediator, or an attorney who is also a mediator.
It’s a good idea, especially if you have children or assets. Choose the right person for you. Someone who represents who you are and your divorce style. If you don’t have easy access to the family funds, start putting some money aside so you can afford to pay an upfront retainer, which is often required. It is best not to navigate a divorce on your own. You wouldn’t perform your own open heart surgery. Would you? Ask lots of questions. Choose the attorney or mediator who will listen and pay attention to your wants and needs. See someone before you are ready to do anything so you don’t make some common mistakes.
Make Copies. Make Copies. Make Copies.
Photocopy every important, relevant financial document you can get your hands on. I would say go back and make copies of documents for the last three years of your marriage. This should include: tax returns, bank statements, pension, stock, portfolio statements, credit card statements and pay stubs to supply your lawyer or mediator.
Avoid Damaging Credit Problems.
If you are using a joint credit card, you are still responsible for any charges made by your spouse. If charges are not paid, those charges can end up on your credit report. Establish credit cards and accounts in your own name to build and protect your credit.
Make Sure You Have Medical Coverage.
Medical insurance coverage usually ends at divorce. If you are on your husband’s insurance plan, you should be able to continue coverage for up to 36 months under COBRA. Under this plan someone has to pay the premiums. These premiums can be very expensive so you may want to consider shopping around for different coverage. Today there are insurance carriers with lower premiums than offered by COBRA.
Take Home and Asset Inventory.
Know what you have! Write down your assets, debts, and what is in your home. It’s helpful to compile lists. The more information you have, the better. Your attorney or Mediator will thank you. You may want to consider taking photos or videos of your home contents. This may help in the division of personal property. You may want to make copies of family photos and CDs. You would be surprised how the division of these items can sometimes cause arguments and stress.
Divorce Has Tax Consequences.
There are important tax ramifications with real estate, deferred compensation and other assets.
If a stock is valued at $3,000, it may only be worth $2,600 in cash after capital gains taxes are paid.
It would not be the same as receiving $3,000.00 in cash in a divorce settlement. In fairly dividing the assets, you must consider the tax consequences before the division. Consult with your accountant to discuss the tax ramifications of your possible asset allocation.
Fully Understand the Assets You Choose.
When you are choosing which assets you want, choose carefully. If you want the house, educate yourself about the fair market value. Keep in mind, you have to make mortgage payments, pay taxes, interest, insurance, utilities etc. Will you be able to afford this once the divorce takes place?
Pensions are usually taxable when you take out the funds. Choose wisely!
Stay in Your Home.
Unless you fear physical or emotional harm, don’t move out of your home. Talk to your lawyer or mediator before you make your move. Leaving the marital residence can have major ramifications.
Consider Different Professionals to Help You.
In some cases you will need experts such as an accountant, appraiser, or therapist. A good attorney and/or mediator will be able to recommend these types of professionals to help you. Divorce in more of an emotional issue than you may realize.
Choose your Friends Carefully.
When you have developed relationships as a couple, you never know who may end up on your spouse’s side and turning on you or even testifying against you later. Consult with a therapist who can keep you thinking clearly in order to focus on your divorce plan. Confide in your therapist and let the friends that were part of your life before your marriage be part of your healing process, not necessarily part of the divorce process.
Divorce can take its toll on you emotionally, financially and legally. Being prepared will give you the tools and the strength to make better decisions. My advice? Try to make your divorce as uncomplicated as possible!
Every woman who thinks she is the only victim of violence has to know that there are many more.
— Salma Hayek
It is often said, “the meek will inherit the earth,” but unfortunately sometimes the meek also inherit abusive relationships. In society we typically think of “meek” as being weak and subservient; but there are also those who have high-powered careers and look dapper in a suit who display characteristics of meekness in other aspects of their lives.
As a divorce attorney and mediator I hear, all too often, people saying about their soon-to-be ex-spouses that, at first, it was all flowers, hand-written cards, and boxes of candy. Yet soon after their wedding night their spouse’s abusive behavior began to surface and they, “never saw it coming.” But if one really takes the time to look and maybe even trust their intuition, there are some red flags—signs that tell you, you may be dealing with an abusive person and it’s probably a good idea not to have a third date or even agree to marry that person.
Here are those five red flags:
- Name Calling: This is a nasty little psychological tactic of an abusive person to try to raise their status over the person they’re mistreating.
- Playing the blame game: Someone who is not able to take responsibility for their actions or missteps is not an adequate partner, especially when they erroneously put the blame for their failure onto you. Failure is a wonderful tool to help us grow and learn from our mistakes, but someone who chooses not to see it that way isn’t growing as a person—and is more than likely growing apart from you.
- Verbal arguments escalating to physical abuse: This one is more than a red flag, it’s a king-sized alarm clock giving you a wake up call that your partner is not the right one for you. If it happens once, it’s more than likely to happen again and it usually gets worse.
- Manipulative: It seems pretty self explanatory, but a potential abuser will prey on your emotions and fears to get you to do their bidding. They might even go as far as forbidding you to see a specific friend or from going certain places. In some cases the abuser will do everything they can to get their future or current spouse to quit their job,—not because they care about their comfort but because they want the other person to rely solely on them so they can leverage that reliance to keep the other person in a weaker position. They subtly separate you from your sources of support – people and money.
- Subtle attacks on your character and abilities: This one is a bit of a wolf in sheep’s clothing. The abusive partner might smile and act very polite while telling you you’re no good at your chosen field, you’ll never achieve your goals and dreams, or you’re not handsome or pretty enough.
Sadly it can take weeks, months, and even years to muster the courage to leave that abusive relationship and dissolve a marriage that should never have happened in the first place. Knowing some signs you may be in a relationship with an abusive person is helpful for two reasons.
- If you haven’t married the abuser, you can get out now before it ever has the chance to end in a messy, expensive, and painful divorce.
- If you’re currently married to an abusive person, it’s never too late to get out. While the divorce process might be scary, pricey, or painful, staying can lead to the death of your spirit or much worse. And if you feel like you might be in a crisis situation, you can always call the Domestic Violence Hotline at 800-799-7233, or the Victim Center at 1-800-394-2255.
If you have any other questions about abusive relationships or need help in the choice you are thinking of making in leaving that relationship, please feel free to call me at 212-734-1551.
I will be happy to advise or help you fight or negotiate the outcome you are looking for.
Money is an emotionally charged topic. That’s why few of us and few couples like to talk about it. When couples come to see me and are considering a divorce, money can actually be, yes, even more than sex, what is driving the couple apart. Money can represent many things. Money is love, happiness, security, control, freedom and lots more. When couples fight over money usually deeper issues emerge. I find that these issues have long been neglected and money has become the vehicle for battle. For most of us, there’s just never enough money. We don’t realize when we enter into a romantic relationship, there often a third party. A silent partner. It’s money!
Before marriage couples discuss where they are going to live, children, careers, and what side of the bed to sleep on, but never money? Money is still a taboo topic. Some people have anxiety, guilt and even shame about the way they handle money. Do you really want to tell a potential spouse you’re an over spender? Not exactly the topic of discussion you want to have before you are walking down the aisle. Most people have complex relationships with their money. We usually learn about money from our families as we grow up and the lessons can be very different. When couples enter a marriage, and have different money styles, they can actually battle and suffer together for years. As the marriage erodes and things begin to explode, that’s when they come to see me. Usually by that time it is already too late. Divorce is on the horizon.
The United States is a nation of overspenders. We live in a market economy and we are led to believe that we are good citizens when we agree to go out and spend our money, lots of it. So much so that we as a country and as individuals are in massive debt. Because many of us feel alienated and disconnected in today’s society, even with social networking sites like Facebook and Twitter, we tend to overspend to fill an emptiness within ourselves. If we are not overspending, than we are usually worrying about money or hoarding it. Money is a complex focal point in many of our thoughts.
Men and women also have different money styles. What sets women apart from men is the different situations women will find themselves in during their lifetime. Women live longer than men. They usually have been in and out of the work force. When women marry they often become part of a financial dependency that can work against them if they are not prepared. Women are primarily the ones who raise the children, and often become the single parent raising the children. Women usually care for aging family members. A woman’s healthy relationship with money is vital in handling all the responsibilities and difficulties she may face.
So what’s your money style? If you haven’t thought about it, maybe it’s time! Get in touch with your money style before you make important decisions in your life.
If I can help you and your spouse get in touch with how to manage money issues if you are facing a divorce, call me 212.734.1551. I will be happy to share amicable ideas on how to settle your money issues.
Women are more financially successful than ever before!
But even with all this success women are still leaving their financial futures in the hands of men or ignoring it altogether. This needs to stop.
Women’s financial needs are actually different from that of men. Women face unique challenges that men don’t. For example:
1.) women live longer than men. on average 7 years longer so they need 20% more retirement income;
2.) women earn about 25% less than men;
3.) since women are still the primary caretakers for children, more women than men take time off to raise kids as well as care for aging parents, which results in lower total earnings, reduced Social Security benefits and less savings.
4.) because of motherhood, women save less money than men;
5.) women are more conservative in their investments;
I tell my clients it’s never too late or too soon to start planning your financial future. I often introduce them to a financial advisor to help them get started.
It is important to educate yourself. Take stock of your household finances, your income, your investments and your debts. Take a look at your social security benefits and what they will be when you retire.
You can use some of the retirement calculators on websites like MsMoney.com to calculate what you will need to retire.
Take the first step. Start today!
You can’t make someone be a mom under these circumstances. That would be so bad for the baby. There are many people, including Lamar Sally who would welcome the chance to be a parent. So why not separate the parenting issue from the finances, as much as possible, sit down in a room without two lawyers who will start from opposing positions, and find out what each person really wants and needs.
Keep out the judge and the fighting cocks.
Come up with a plan that could work for both of you.
Keep the money in the family. Done!
Take the less aggressive and less expensive approach.
“Sherri Shepherd” by US_Navy_100527-N-1831S-236_Whoopi_Goldberg,_Elisabeth_Hasselbeck_and_Sherri_Shephard_hosts_of_the_ABC_talk_show,
U.S. Navy photo by Mass Communication Specialist 3rd Class Ash Severederivative work: Licensed under Public domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Sherri_Shepherd.jpg#mediaviewer/File:Sherri_Shepherd.jpg
Do you have a will? Is it current?
You would be surprised at the number of people who don’t have one. Of course, part of this can be explained by the fact that people do not like to think about death – especially their own. So they put off preparing a will, and put it off, and put it off.
This is separate and apart from the number of people who have a will but have not updated it, to include changes such as a marriage, the birth of a child, grandchild, or changes in to whom they wish to leave something.
Then there are the people who say, I have nothing to leave anyone. Even so, a will appoints an Executor, so that someone you know and trust is managing your affairs, rather than a state agency.
As a matrimonial lawyer, I see this issue coming up all the time, from different perspectives. The person who has forgotten to take his/her former spouse out of a will. The person who needs a prenuptial agreement leaving something to a new spouse and to existing children from a previous marriage. Almost all of my clients need and can benefit from preparing a new will.
So, while you’re thinking about it, find a lawyer who specializes in trusts and estates, prepares wills, and does estate planning. Make an appointment for a consultation and just go in. He or she will know how to guide you and make the process less daunting than it may seem.
If you are thinking of Separation or Divorce and have questions on updating your Will, call 212.734.1551.
photo by: nuttakit
One of the topics we’ve discussed extensively is child support as part of divorce cases. The divorce process, which should only affect the couple, sadly also affects the children in the family. One of the most important parts of the process is resolving child support.
The court’s foremost consideration in divorce cases that involve children is maintaining the children’s standard of living. As much as possible, resolutions revolving around children are aimed at having them feel the least amount of pressure during the divorce process.
New York state courts use a standard guideline in calculating the non-custodial parent’s child support award. This is based on his/her gross income and the number of children involved:
- 17% for one child
- 25% for two children
- 29% for three children
- 31% for four children
- at least 35% for five or more children.
For a combined parental income amount over $141,000, the court may consider either the standard guideline percentages and/or other factors in setting the full child support obligation.
With all of the factors considered in the divorce process, the parents often overlook “extra” items in the child’s present and future expenses:
- Childcare: babysitter, nanny
- Education: private school, college, books, supplies, SATS
- Summer Camp
- Health Insurance
- Unreimbursed medical and dental expenses
- Extracurricular Activities: Sports, dance, or music lessons.
- Life Insurance
A skilled attorney should prove knowledgeable about the New York state statutes, but the right attorney for you should help you see the important matters you might have overlooked.
Getting the right kind of advice about child support will not only help you protect your child from the effects of divorce — it can also help protect your children financially.
I have over thirty years of family law and mediation experience and I would be happy to discuss the expensive and sometimes overlooked “extras” of child support with you. If you have any questions please feel free to call me at 212-734-1551.
photo by: vastateparksstaff
Gwyneth Paltrow and Chris Martin announced their separation this week and described it as a “conscious uncoupling” over at Goop, Gwyneth’s personal website. Their statement read they had “come to the conclusion that while we love each other very much, we will remain separate” and “we hope that as we consciously uncouple and co-parent, we will be able to continue in the same manner.”
Many people hearing the news have been asking the question what exactly is conscious uncoupling?
Although “uncoupling” may sound like a modern term, it was actually listed in the 1942 edition of the Oxford English Dictionary as a term to describe the end of a relationship.
As a divorce lawyer, looking at the way that Gwyneth and Chris are handing the public face of their break up, it suggests to me that behind the scenes, they may well be using “mediation” as a positive way forward to divorce.
Divorce mediation is one of the three routes my own clients choose from when they are contemplating a divorce. It’s non-adversarial and is an excellent alternative to divorce court, particularly as it helps couples to build a positive relationship moving forwards with their “uncoupling.”
With divorce mediation, the settlement process can begin immediately.
Being trained in both Law and Psychiatry, I am uniquely qualified and have created an effective psychologically-based mediation service which helps couples create their own solutions for managing finances, support, visitation, custody and tax issues. We meet together in a supportive setting and my role in the process is to be an unbiased mediator, not an adversarial divorce attorney, so you and your partner are able to make agreements quickly and compassionately.
I make sure there are no losers and even couples who are very angry can express their wants to me as I’m specifically trained to manage any conflict and the mediation process works, even turning conflict from destructive to productive.
For those with children, like Gwyneth and Chris, mediation can ease decision making around contentious areas such as property issues, alimony, child support, moving out, protecting your children, your family, and developing a budget that will work for you. These are typically areas where my clients value the support I can give them, without value judgements.
At the end of the mediation process, a written separation agreement is then drafted for you and divorce documents are filed with the court. You will receive your final Judgment of Divorce after it is signed by a judge.
If you are looking for an alternative to divorce court, then consider divorce mediation. I will help you and your spouse “uncouple” with grace and empower you both to move on with your lives.
Here’s a hypothetical based in reality: three years ago you were going through a divorce. Your former spouse (who was also the primary breadwinner at the time) had their accountant give you paperwork to sign that said you acknowledge that all taxes from the previous fiscal year would be paid by your former spouse. You happily signed that document, relieved that you saved some money at a time when finances were so tight.
It’s now three years later. You’ve been divorced for two-and-a-half blissful years. You’re at your local bank making a withdrawal from your primary bank account which has five thousand dollars in it. The teller says you can’t make the withdrawal because your account has a lien on it. You call the national office of your bank to find out that the IRS has placed a lien on your account due to unpaid taxes the year you completed your divorce.
You find out that your former spouse is completely financially insolvent. You and you alone are responsible for the unpaid taxes that now add up to more than twenty thousand dollars. Technically, you were married three years ago and are therefore responsible for all of the unpaid taxes because you filed a joint tax return with your former spouse.
This story is, of course, fictional but lately I have been getting a slew of similar phone calls from divorcees who have been misled by their former spouse and who are now thousands of dollars in debt to the IRS.
In the previous hypothetical scenario if the innocent spouse had sought out and received adequate legal counsel after learning of the IRS tax lien, they would have learned that they could qualify for tax relief due to the IRS Innocent Spouse rule.
If you think your spouse is involved in wrongdoing and it might make you liable or if you simply feel that your spouse has a lousy accountant who is exposing you to significant tax penalties—it’s important that you seek out legal counsel who can help you sort out these issues. You don’t need to file for divorce or be engaged in a divorce to seek out legal counsel—you can do it within the confines of a perfectly healthy marriage and with the knowledge of your spouse.
Don’t take any chances with your taxes or the IRS. Seek out legal counsel to prevent even the slightest chance of a tax lien or stiff penalties.
If you have any questions about your taxes as it related to your current or former marriage, please feel free to call me at 212-734-1551, and I’d be happy to advise you on the outcome you are looking for. I’m Lois Brenner and I will always help you achieve the future you deserve.
According to a recent American Express consumer report, more than four million expected to get engaged to be married on Valentine’s Day. Naturally, being in the field of family law as an attorney for more than thirty years, I expect that fifty percent of those Valentine’s Day engagements will end in divorce—which is sad and unfortunate. There has to be a better way to ensure that all of the love and affection showed on February 14, lasts a lifetime. In fact there are several issues I see as a common thread that lead to divorce. Here are four tips to help you divorce-proof your relationship from the very outset, so that the shine of that new engagement ring doesn’t blind you to some of the very basics of a long and successful marriage.
- Discuss Finances: Before marriage, couples discuss where they’re going to live, children, careers, and what side of the bed to sleep on… but never money. Some people have anxiety, guilt, and even shame about the way they handle money. Do you really want to tell a potential spouse you’re an overspender? Not exactly the topic of discussion you want to have before you are walking down the aisle. Have an open and honest conversation with your future spouse about it and know your “marriage money style.”
- Be Aware of Abusive Qualities: You don’t have to be “hit” to be abused. Name calling, playing the blame game, emotional manipulation, and attacks on your character and abilities are all signs of emotional abuse. Of course, if your future spouse actually physically abuses you then that is an immediate sign that it’s time to call off the engagement. Violence never solves anything and you don’t deserve any kind of physical abuse doled out to you.
- Get a Prenuptial Agreement: Not just for the rich and famous, a prenup forces you to have in depth conversations about uncomfortable but important marital issues with your future spouse. Money matters, what religion you plan to raise your children, family business ownership, and planning for death are just several crucial topics that are brought to the forefront when discussing a prenuptial agreement. Speak now or forever hold your peace.
- See a Therapist: This person should be an objective, non-partisan third party concerned only for the emotional well-being of you and your future spouse. A therapist is someone who will talk you and/or your soon-to-be spouse through the logistics of making decisions and compromises where there are no losers, and help you navigate the peaks and valleys of being in a healthy marriage.
Within the scope of a relationship, communication is key—honesty with yourself and your future spouse. Communication ensures that you don’t marry the wrong person or that you stay married to the right person. If you have any other questions about relationships, prenups, or therapist referrals; please feel free to call me at 212-734-1551, and I’d be happy to advise you. I’m Lois Brenner, mediator and divorce attorney; and I will help you achieve the future you deserve.