10 Things You Need To Know About Divorce And Financial Aid

There are ten things you need to know about divorce and financial aid and these ten things could help you to significantly reduce the cost of your child’s college education.

Unfortunately, many couples don’t discuss their child’s college education as part of the divorce negotiations and those that do, focus on who’ll pay for what but overlook financial aid. That’s a mistake.

In this excellent blog posting, Mandy Walker talks with Paula Bishop, an expert in financial aid who often talks about Paying For College Without Going Broke. You can listen in to their conversation or read a synopsis.

What You Need to Know About Custody & Child Support

If you’re separated or getting a divorce from your kid’s other parent, you probably have a ton of questions about custody and child support. In an ideal world, these are things you wouldn’t have to think about. But in the real world, parents split up, and rarely is it possible to simply go your separate ways. Lots of issues have to be addressed when you have kids in common, starting with where your child lives and how their expenses are paid for. In this excellent blog posting, Claire Gillespie writes what all divorced parents need to know about custody and child support.

There’s more than one type of custody
Custody doesn’t just cover where children go to bed at night and wake up in the morning. There are two aspect of custody — physical custody and legal custody. Kids live with the parent who has physical custody and have “visitation” with the other parent, while legal custody is the right to make important decisions (about education, health care, religion, international travel, etc.) relating to a child.

The child’s best interests come before everything else
When making any decision that affects a child, the court’s paramount consideration is the best interests of that child.

Courts shouldn’t discriminate
When determining what’s in the best interests of a child, certain factors shouldn’t be relevant, including the gender, race, religion, sexual orientation, physical ability or financial status of the parent.

Child support is for the kids
Child support shouldn’t make the party giving or receiving it feel like they can use it for revenge or any other negative means — it should be looked at solely through the lens of what is necessary to help with the upkeep of the child.

Court isn’t the only option
You don’t have to endure months (or years) of court proceedings to do what’s best for your kids. There are many alternatives for resolving parenting issues outside of court. These days, more and more parents are choosing to sit down with a mediator to determine a parenting plan that works best for their family and to settle the matters of support. In making decisions together in a cooperative fashion, parents set up a new paradigm of cooperative compromise and communication, which helps them to co-parent beyond the divorce or separation.

Power Imbalances in Divorce Mediation

One of the basic requirements of divorce mediation is that the mediator be neutral and impartial. Certainly, this means that the mediator should not be taking sides or favoring either party. But it also means that the mediator may need to be more directive at times to ensure the integrity of the parties’ decision-making.

In this excellent blog post, Susan Ingram writes that it’s the couple that makes all of the decisions in divorce mediation, not the mediator. And the couple needs to be able to make “informed decisions.” What do she mean by informed decisions? Each of them must have all of the information, and fully understand that information, in order to make an appropriate decision on each of the issues they are addressing.

Like Susan, I am often asked – but what if there’s a power imbalance between the parties? Can I, as their mediator, successfully mediate their divorce? The answer in the vast majority of cases is yes.

I view my task in these instances as that of being “omni-partial,” meaning that I am partial toward all (or in the case of divorce mediation, both) of the participants. Thus, during our mediation sessions, I am always attentive to any imbalances that may exist.

Power imbalances can take many different forms. They may be overt or subtle. For example:

• One spouse may be more knowledgeable as to financial matters than the other. If the less-knowledgeable spouse is having difficulty in budgeting and understanding the implications of various financial options, I may have them work with a financial professional who can clearly explain the options available to them.
• If one party is more verbal and/or more assertive during discussions than the other, I will take steps to ensure that the quieter person’s voice is heard.

By being aware of power imbalances, the mediator can support the “less-powerful” person so that he or she can participate fully in the mediation. With balance, both parties are able to make informed decisions for themselves and their family.

How Much Can I Save Mediating My Divorce?

The fees to simply retain an attorney for each party in a divorce start around $5,000 for an average case. That means you will spend $10,000 minimum just to get your divorce case started.

Attorneys will then charge additional fees for time spent on the case after the funds from the retainer are exhausted.

In contrast, the total cost of mediation from beginning to end is typically less than the fees a couple will spend just to retain lawyers to handle the divorce. In fact, a recent study showed that couples who chose to dissolve their marriage in court spent an average of 134% more than those who chose mediation.

Also, typical mediations last no more than a few months, possibly up to six months for complex cases. A traditional divorce is usually resolved within three years and only after extensive time is spent on paperwork, meetings and court appearances. There are many cases that go beyond 3 years, especially when kids are involved.

Reasons to Consider Mediation

Statistically, 93-96% of all family law cases settle prior to trial. With probabilities high, it isn't a question whether a case will settle but when it will settle.

Keeping this in mind, Professor John Wade of Bond University in Queensland, Australia "modestly" proposes the following costs involved in settling later rather than earlier:

• Attorney fees
• Accountant fees
• Interest lost on money received later rather than sooner
• 1-2 years of personal stress and uncertainty
• 1-2 years of stress on family members
• 1-2 years of stress on others and work associates
• 1-10 weeks of absenteeism from work
• 1-3 years of lost concentration and focus on work
• Life/business on hold for 1-2 years
• Inability to "get on with life" for 1-4 years
• Negative publicity on press/business circle

If resolution is to be by litigation, the following additional transactions costs may be added to the above:

• 1-5 weeks of lost employee time preparing for court
• Embarrassment and loss of goodwill when relatives/friends/business associates are subpoenaed to court
• Expert witness fees
• Loss of control over your life to professionals
• Post-litigation recriminations against court, experts and lawyers
• Loss of value by court-orders sale/appointment of receiver, etc.
• Lost future goodwill with and "paybacks" by opponents
• Cost and repeat of all previous factors if there is an appeal

These are not exhaustive lists. In each case, the client must assess the range of possible costs in each category considering the best-case scenario and the worst-case scenario if the category would likely apply to the client, to the opposition or both.

Family law clients need to understand that their "best case scenario" is unlikely to be the result of litigation. The "bigger the win" for one party the more likely it is the other party will appeal. Getting to that "big win" is a slow process and frequently is at great cost.

Mediation is a process of facilitated negotiation for parties who are motivated to resolve their differences as quickly as possible under the circumstances, retaining as much control over the process as possible. It does not preclude attorney participation at any stage of the process. It does not preclude discovery as is necessary for both parties to be fully informed. Mediation does not require that the parties "like" each other. Mediation at its best is a process in which parties' interests are addressed, rather than their "positions", allowing for the possibility of a win-win situation.

Gray Divorce: How Divorcing Later In Life Can Affect Your Retirement Plans

Over the past quarter-century, as the divorce rate among couples 25 to 39 years old decreased 21%, the rate of divorce among adults 50 and older—often referred to as “gray divorce”—rose 109%, according to Pew Research. (Divorce among couples ages 40 to 49 rose 14%.)

There are a lot of theories about what fuels this trend: empty-nest syndrome, changing priorities, growing apart (or boredom), the financial independence of women as compared to previous generations. The availability of healthcare to spouses who have been on her or his partner’s policy also makes divorce a more viable option today than in the past.

In this excellent article from Forbes, Kelly Frawley and Emily Pollock write that whatever the reason couples choose to split later in life, she or he need to be aware of some special challenges that may require them to reimagine her or his retirement plans.

A closing pool of assets. When couples divorce in her or his 20s, 30s or early 40s, one or both of them typically have plenty of earning potential ahead. But when 50- or 60-somethings divorce, the asset pool is closing or may have already closed with retirement. Figuring out how to divide assets that won’t be growing between two households can be a challenge. On the other hand, there are often more assets to divide at this later stage of life, so perhaps this obstacle is easily surmountable to some separating partners.

Costs of living separately. It’s smart to not only know what assets the couple have but also understand what life costs. The price tag on health insurance alone can be daunting; add home and living expenses to the equation, and sticker shock can take a toll. What should be factored into each individual’s costs? Mortgage or rent, management and operational costs for the home, personal expenses, insurance, vehicle expenses and any other costs associated with maintaining one’s established lifestyle.

Custody and other issues related to your children. One of the more attractive features of gray divorce is that it rarely involves custody agreements (often the most complex part of divorce), since the children have usually reached adulthood. In cases where custody is involved, deciding with which parent the child(ren) will live is a bit easier because there is typically a longer history for the court to review of who has been the primary caregiver.