Questions keep you up at night like — are you able to afford the house after your divorce, how you will be able to educate your children, can you use retirement funds early to help you re-establish yourself and so much more.
Can I afford to keep the house? Or should I?
This can be both a yes and a no. We review the costs to maintain the home, taxes, and insurance. Then make sure you have enough to remain comfortable in the home. Should you give up other assets in order to keep the home? As your CDFA™, we can help you weigh these issues against current economic conditions as well as your future financial goals.
How will my lifestyle change?
We can look at your current income and spending to see where you are financially today, pre-divorce. Then we take the offer on the table and project out 5 to 10 years to show you what your finances might look like. Armed with this information, you can start to make financial tradeoffs you might not have otherwise considered.
Litigate, mediate or collaborate—What do they mean?
Litigation is normally what we think of in terms of a divorce fight with either partner retaining their own attorney. Mediation and collaboration are greater trends in divorce today. In mediation, both parties might retain an attorney, with the emphasis on working things out together. Collaboration involves only one attorney who works for the couple as a whole. That attorney must dismiss themselves from both parties if the collaborative process does not work.
In litigation, the CDFA™ might assist one side or the other with financial models. In mediation, the CDFA™ might work out models with both parties as a financial neutral or one side individually presenting financial models to the other parties and mediator present. In a Collaborative divorce, the CDFA™ works as a financial neutral for both parties.
How does a business get divided?
We begin with valuation, ownership and ongoing income. Understanding these components and how they fit into a divorce settlement can help you see what areas can or cannot be divided. Don’t forget about digital assets as well as a business. Your music collection or domain name for a business website might have value as well.
How will I get medical insurance after my divorce?
There is a time after divorce where you can be covered under a current plan, but eventually that time period will end. Determining how you will be able to afford insurance is crucial to your future.
Can I use retirement funds to re-establish myself?
Can we divide a 401k, IRA, 403B or even a pension? Pensions and retirement plans, generally speaking, are marital assets, even though they might be called “Individual Retirement Accounts (IRAs.) You may be able to maintain a pension and have it offset with other assets, or break up a 401k for one party to help another. Although a 401k cannot be accessed without penalty until you reach 59 ½, there is a little known window of opportunity to access the account without triggering the penalty.
How will alimony affect me? Will it affect my taxes?
Alimony is the general payment to a lower wage earning spouse to help them re-establish themselves to nearer their standard of living. Generally alimony is taxed to the recipient (payee) and a tax deduction to the payer. We can help look at different alimony scenarios to give you an idea if you will be able to live in the manner you expect, whether you are paying or receiving alimony.
How much child support will I get? How will I educate my children?
Every state has Child Support Guidelines that are mandated. However, this gets tricky if one spouse is a business owner or can control their wages. State guidelines might not cover private school or college, but having an idea of what those costs will be in the future, can help both parties negotiate during the divorce as to their share of the responsibility. Another key factor is life insurance. What if one party passes before the children are educated, who should own and maintain a policy?
What is the impact on my divorce settlement if I choose to re-marry?
This is an important question and one you might not want to discuss in mediation with a soon-to-be ex-spouse present, but re-marrying can have an impact on alimony, Social Security and other benefits.