Divorce itself is an emotionally charged, troubling process. When you add major financial decisions to the mix it can create a recipe for disaster.
A large portion of many divorce settlements I help with involve retirement plans. Per the Investment Company Institute, as of December 31, 2018, 401(k) plans held an estimated $5.2 trillion in assets and represented 19 percent of the $27.1 trillion in US retirement assets. So, it’s no surprise that retirement plans hold a large portion of discussions in divorce cases.
In this excellent blog posting, the Divorce Strategies Group offers help understanding the 401(k), taxation of the 401(k), and the pros and cons of keeping or receiving the 401(k) in a divorce agreement.
Tuesday, June 25, 2019
Tuesday, June 18, 2019
Why Reaching A Divorce Agreement Is Better Than Going To Trial
As an experienced divorce mediator, I often hear from potential clients in long term marriages or relationships that come in for a divorce that it does not seem fair that his or her spouse wants x or that he or she is entitled to x in their divorce agreement.
Some individuals come in convinced that they will go to trial no matter what. That is a terrible way to think. With emotions so high, I understand that reaction but it is not a good one.
Litigants in long term marriages that are coming to an end face significant challenges when they want a divorce. In long term marriages, parties acquire substantial assets, debts, personal property, and more. Aside from assets, long term partners usually have children. This is a whole different major issue. Child custody is one of the most fought over issues in family court throughout America.
When it comes to child custody, men now have the same chance as women to obtain residential custody. Shared custody is becoming more common in certain situations. Fighting for custody becomes a very expensive endeavor that can be avoided if you work hard with your attorney and the other parent to come to an agreement. This allows each party to be involved in the child’s life so that he or she can enjoy his or her time with mom and dad.
If you go to trial because you believe something is unfair, a Judge may not agree with you. Going to trial can be very risky. I’ve had clients that have been so mad at the idea that they must pay alimony or give up/divide an asset, that they decide to go to trial and risk everything. I highly advise against this. At trial, you can do better, worse or about the same as creating a divorce agreement. One thing for certain about going to trial is that you will have less input.
Trial Judges are busy with so many cases that it is very hard for the Judge to pay attention to what you think is important. Judges deal with case after case. One thing you may think is important, the Judge may not. A trial can go on for months depending on the Judge you have. In short, try to avoid divorce court if you can. In some situations, though, a trial is a must.
When Is a Trial a Must?
A trial is a must if, for example, your spouse is not letting you see your child or talk to your child and is using the child as a pawn.
Another situation could be where the parties own a home and one party does not want to give the other party their equitable share. The list goes on as to why you should go to trial, but there are more reasons why you shouldn’t go to trial.
What Can I Do to Help My Case Settle?
Some individuals come in convinced that they will go to trial no matter what. That is a terrible way to think. With emotions so high, I understand that reaction but it is not a good one.
Litigants in long term marriages that are coming to an end face significant challenges when they want a divorce. In long term marriages, parties acquire substantial assets, debts, personal property, and more. Aside from assets, long term partners usually have children. This is a whole different major issue. Child custody is one of the most fought over issues in family court throughout America.
When it comes to child custody, men now have the same chance as women to obtain residential custody. Shared custody is becoming more common in certain situations. Fighting for custody becomes a very expensive endeavor that can be avoided if you work hard with your attorney and the other parent to come to an agreement. This allows each party to be involved in the child’s life so that he or she can enjoy his or her time with mom and dad.
If you go to trial because you believe something is unfair, a Judge may not agree with you. Going to trial can be very risky. I’ve had clients that have been so mad at the idea that they must pay alimony or give up/divide an asset, that they decide to go to trial and risk everything. I highly advise against this. At trial, you can do better, worse or about the same as creating a divorce agreement. One thing for certain about going to trial is that you will have less input.
Trial Judges are busy with so many cases that it is very hard for the Judge to pay attention to what you think is important. Judges deal with case after case. One thing you may think is important, the Judge may not. A trial can go on for months depending on the Judge you have. In short, try to avoid divorce court if you can. In some situations, though, a trial is a must.
When Is a Trial a Must?
A trial is a must if, for example, your spouse is not letting you see your child or talk to your child and is using the child as a pawn.
Another situation could be where the parties own a home and one party does not want to give the other party their equitable share. The list goes on as to why you should go to trial, but there are more reasons why you shouldn’t go to trial.
What Can I Do to Help My Case Settle?
- Write a list of what your ideal situation is.
- Be realistic in what you want.
- Know what your budget is.
- Find out what kind of timeline you are dealing with concerning what you want.
- Be civil with your spouse.
- Be respectful in court.
- Think positively.
Tuesday, June 11, 2019
How Divorce Can Affect Your Credit Score
Divorce can affect your credit score as well as every part of your life and the lives of your family. Finances are no exception. When you decide to get divorced, it’s important to prepare for the effects it will have on your credit score. From dividing bills to refinancing the mortgage, your credit will be put to the test before, during, and after a divorce.
Your credit scores are important because you may need to qualify (or requalify) for debts such as auto loans, mortgages, or even your credit cards. If you’re moving out of your home and into an apartment, the landlord may check your credit as well. Knowing how to divorce can affect your credit score during can help you remain financially stable once you’re on your own.
In this excellent blog posting, Greg Mahnken writes about how divorce can affect your credit score, including:
Divorce can affect your credit score and be a major strain on your finances. Learning the ins and outs of your credit scores will better prepare you to safeguard your credit through the divorce process, positioning you for stability moving forward.
Your credit scores are important because you may need to qualify (or requalify) for debts such as auto loans, mortgages, or even your credit cards. If you’re moving out of your home and into an apartment, the landlord may check your credit as well. Knowing how to divorce can affect your credit score during can help you remain financially stable once you’re on your own.
In this excellent blog posting, Greg Mahnken writes about how divorce can affect your credit score, including:
- On-Time Payments
- Amounts Owed (Credit Utilization)
- Length of Credit History
- New Credit Inquiries
- Types of Credit
- Tips to Protect Your Credit During a Divorce
Divorce can affect your credit score and be a major strain on your finances. Learning the ins and outs of your credit scores will better prepare you to safeguard your credit through the divorce process, positioning you for stability moving forward.
Tuesday, June 4, 2019
Retirement Accounts in Divorce: Five Common Questions
Valuing and dividing retirement accounts is more complex than most divorcing couples expect. In this excellent blog posting, the Divorce Strategies Group offers the answers to five common questions regarding retirement accounts.
Retirement accounts are complicated, especially in divorce. Properly tax effecting and characterizing your estate is critical in divorce negotiations. Having the right people on your team is one of the best ways to ensure you are receiving the settlement that’s best for you.
- Can a retirement account be divided without triggering taxes?
- Is a retirement plan more or less valuable when compared to other assets?
- Is a retirement account separate property?
- Can you avoid the IRS penalty for early withdrawal in divorce?
- Should you “tax affect” retirement accounts when dividing assets in divorce?
Retirement accounts are complicated, especially in divorce. Properly tax effecting and characterizing your estate is critical in divorce negotiations. Having the right people on your team is one of the best ways to ensure you are receiving the settlement that’s best for you.
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