Divorce: How to Keep Your Money

As soon as you begin to contemplate divorce, the nauseating, panic-attack-inducing realization of losing half of your net worth kicks in. You find yourself wondering if it’s even worth it to consider leaving if you’re just going to end up broke and starving.

There are ways to ensure that your financial future is not destined for disaster. First and foremost, be sure you involve a Certified Divorce Financial Analyst (CDFA®) or CDFA®-Mediator so that you will be fully informed of all the creative settlement possibilities that may be open to you. They are your best bet when you want to keep your money safe.

A couple married 24 years were referred together to a colleague for assistance with their divorce. They had gone to an attorney together and were completely amicable. The attorney made it clear that he could only do their document preparation since he was ethically bound to represent only one party. That was ok, but they asked how they would determine their property division. He responded,

“This is a community property state so we’ll just divide each asset and each debt exactly 50/50.”

The couple just didn’t feel like that was the smart thing to do. They were referred to the CDFA® to explore options.

After gathering all of their financial documents and completing the analysis, the CDFA® put together two reports for the clients. The first reflected an exact 50/50 split as the attorney had suggested. The second was a creative settlement solution that also resulted in a net 50/50 split but took into consideration tax planning and consequences as well as the needs of each party as they planned for the next phase of their lives.

This couple had less than $800k in total net worth and the creative settlement solution resulted in an additional $20,000 EACH to their bottom line just because some financial intelligence was used to determine their settlement. That’s real money! That’s how you keep your money! Needless to say, the couple was thrilled knowing that they saved $40,000!

Don’t go into this blind. There are so many ways to ensure that both of you get to keep more of your own money. Get the right experts on your team. We’d love to help you! Call us today.

Parenting Best Practices in Divorce

Parenting and co-parenting in divorce requires some special attention. None of us wants to bring harm to our own children but there are times when the best decision for everyone in the family is a divorce. While divorce presents its own set of issues to be worked through, it can also give each parent the opportunity to build a stronger relationship with their children and teach them about how to deal effectively with life’s difficult times.

Overall, parenting isn’t easy and this holds as true for married couples as it does for divorced ones. Divorce does, though, bring a new set of challenges. TruNorth Divorce has written before on parenting through divorce. In this piece we want to provide a short list of best practices to help divorcing and newly divorced couples navigate the unique issues that parenting as you transition from a single household to two separate ones.

1. Talk to Your Child(ren) About Your Decision to Divorce

Sometimes, we get so caught up in our own emotions that it’s hard to step outside of them and take the time to check in with our children. Talking to your kids about your decision to divorce can create a safe space in which you can help them better understand your choice, and it can provide them with a platform to express difficult emotions.

Divorce impacts the entire household, and it’s not an easy topic to broach when emotions are still raw. Opening a dialog with your children about your divorce in a neutral and calm way and allowing them to ask tough questions and to express their fears will help your children better accept your decision to divorce and work through their feeling about it in a healthy way.

2. Create a Coparenting Plan

How you decide to move forward with parenting after divorce can have a profound impact on family dynamics and your children. To a significant degree, consistency and harmony between their parents is key to children’s mental well-being in the future.

CustodyXChange.com helps parents build sound parenting plans. Per the experts behind CustodyXChange.com, here are some of the reasons why negotiating a parenting plan can benefit your children:

It allows you and the other parent to state your goals for your children

  • It sets up communication habits between you and the other parent
  • It states the legal consequences if one of you don’t keep to the plan
  • It results in a clear visitation schedule you can both refer to
  • It lessens tension between parents and children because the basic daily decisions are already established
  • It forces you to get familiar with divorce and custody laws in your state
  • It often reduces your legal fees when you don’t have it created by a third party

3. Don’t Put Your Children in the Middle

Make a good faith effort to put any hurt feelings aside and shift your attention to what’s best for your children. Establishing some good ground rules can help minimize the impact of your emotions and will help you focus on fostering healthy communication and collaboration. 

Using children as messengers, sharing negative feelings, and venting or speaking negatively about your ex-partner drags them into the middle of things. Any conflict or issues between you and your ex are just that—between you and your ex. Children want a solid relationship with both parents. Keeping these emotions out things will help you turn your attention to your children’s happiness and wellbeing.

4. Keep Lines of Communication Open

Communication is a substantial ingredient in the recipe for successful parenting, and it’s arguably even more important for divorced parents living separately but parenting together. While you are both full-time parents, the time spent with your children is now divided. Operating in silos can leave your coparent in the dark and create conflict—reiterating how important it is for coparents to be on the same page. The only way to ensure that is through open communication.

Discuss issues that crop up with your former spouse and do so as they arise. Don’t just enumerate the problems, fill your co-parent in on the positives too. Communication between households is crucial to maintaining a united parenting front and making sure that both parents are aware of what’s going on in their children’s lives. One resource you may consider to assist with effective communication is Our Family Wizard, an online custody and co-parenting app

There is no greater common ground between two individuals than the well-being of their children and divorce doesn’t change that. Hopefully, these post-divorce parenting practices can help you negotiate the murky waters of post-divorce coparenting. For more resources on all things divorce, explore our blog.

 

 

Get A free Consultation

484.321.6990

hello@trunorthdivorce.com

Three Critical Financial Steps in Getting Through Your Divorce

Divorce can make it really hard to think straight about what to do next when it comes to most things and especially financial planning. Believe me, I know. The intelligent, together person you are can turn into an emotional, brain-fogged, unorganized mess. You try really, really hard to keep it together but you know this will not go down as “the best of times.” You want to sit down and get it together and plan your future but feel paralyzed and surrounded by a pea-soup cloud of indecision. What’s a person to do to ensure they’re doing the right things to financially plan for your divorce?

Well first, let’s get real.

ADMIT WHAT YOU DON’T KNOW

When it comes to the finances, what’s your role? Do you handle the family’s finances and investments? Are you on top of your investment accounts, retirement plans, bank accounts, etc.? If you’re in the dark, you need someone to help you turn the lights on and fast!  Gather all your financial statements on your asset accounts and your most recent tax returns, then find a specialized divorce financial advisor to help you out and bring you up to speed.  A CDFA is specially trained in the financial aspects of divorce and will be your best friend in this process. If you and your spouse are able to cooperate, you can use a CDFA-Mediator who will educate you and your spouse on the realities of your financial health and what your future might look like under various settlement options.

START ENVISIONING YOUR FUTURE

Maybe you’ve already been fantasizing about your future life or perhaps this has all taken you by surprise. Regardless, it’s time to start really thinking about what the next phase of your life looks like. Unfortunately, this has to happen at the same time that you are grieving what you thought the next phase might look like. But if you allow yourself some space, it can actually be very productive. You now have the chance to start from scratch. What did you used to dream of doing that got lost while you were married? Is it time to go back to school? Maybe live on a sailboat for awhile or move closer to family? Whatever you dream of, you have to have your budget and financial picture top of mind. So the step above has to come first so your dreams don’t outsize your wallet! A financial advisor specializing in divorce would know how to set you up for future success.

BUILD A SINGLE IDENTITY

Often through marriage many of the credit cards, mortgages, loans, etc. are in the names of both spouses. All of those accounts will have to be closed or converted. After the marriage is over, your credit picture may not be nearly as strong, so you want to be sure to put some things in place while you’re still married. Immediately open a checking and savings account in your own name to begin the process of establishing your own financial identity. Get a credit report and start monitoring it. Track your expenses and create a budget for now and post-divorce. Find a good rewards credit card to apply for in your name alone so that you will be assured of having access to credit through the divorce and beyond.  

These steps seem small but are valuable first steps to get you thinking financially and looking out for your future. You can get through this with a little help from an experienced divorce financial advisor. Having the right professionals on your side will be of great benefit to you.

 

 

Get A free Consultation

484.321.6990

hello@trunorthdivorce.com

How to Get a Divorce in Maryland

Most “How to Get Divorced” articles take a rather narrow view, i.e., the legal process. Obviously, these articles are typically written by lawyers. 😉 

How to get divorced can be a multi-faceted, complicated, entangled, frustrating, non-linear, jumble of a messy process. Not surprising, given that there are two spouses, years of history, hot emotions, finances, children, a home, secrets and lies, and hidden agendas involved.

Given all this, though, let me try to keep this “how to get divorced in Maryland” piece as simple as possible for this medium (please contact us for more detail.) Here are what we consider to be three essential components.

 #1: Financially Prepare and Protect Yourself Before You Start the Divorce

  • Open a separate checking and credit card account at a new bank
  • Check your credit report and score and then periodically track
  • Establish private communication, e.g., P.O. box, email account
  • Gather and copy financial and legal documents—tax returns, statements for loans, bank and retirement accounts, investments, wills, trusts, deeds, car registrations, insurance policies—and store them outside of the marital home

#2: Talk to Professionals

Most think to first call a lawyer after they talk to a few of their friends and family members. Let me suggest otherwise. Friends and Cousin Amy are great for support but they aren’t likely stellar for advice on how to handle one of the most important and costly events of your life. While well-intentioned, their cases and knowledge of others’ situations are different than yours and you will need the advice of a professional for accurate advice.

You’re best first stop is not with a lawyer but with a far more neutral and resourceful individual: a reputable divorce coach. She or he can help you assess your situation and choose the best path forward and how to execute. They can also help you with setting objectives for how you want to handle the divorce on a personal level, i.e., how to be your “best self.” They can help you better work with a lawyer or mediator, saving you money and significant angst. They are more than anything, the quarterback on your divorce team who can help you assemble the right individuals for the jobs you’ll need to get done.

Lawyers, of course, are a critical component for their knowledge of the legal process. They will often unnecessarily steer you, though, to costly litigation, without regard for what will be best for you and your spouse. Many lawyers are now moving into mediation as its become more popular with divorcing couples, but keep in mind that lawyers aren’t necessarily the best choice for mediation. They are also not equipped to handle the emotional, practical, or complex financial issues of divorce, so make sure you talk to more than just a lawyer early on in the divorce process.

Mediators are a good information source as you consider mediation as a divorce process. Other professionals to consider are a Certified Divorce Financial Analyst® (CDFA®) to discuss optimal or creative financial settlement options, or a therapist who may be able to provide extended emotional support.

 # 3: Familiarize Yourself with MD Divorce Law and County Procedures

a. Legal Separation

In Maryland, there is no legal separation but a “limited divorce” serves as a legal separation. Even without legal recognition of a separation you can still create a legally binding separation agreement that covers such things as child support, spousal support, joint bills, parenting plan, health insurance, loans and other debts, etc.  

b. Residency

If the ground for divorce occurred in Maryland, you need only be currently living in Maryland at the time you file for divorce. If the grounds for divorce occurred outside Maryland, you or your spouse must have lived in Maryland for at least six months before filing your divorce complaint.

 c. Types of Divorce, Waiting Periods, and Filings

 In Maryland, there are two types of divorce: limited and absolute. A limited divorce is essentially a legal separation.  

  • Grounds for limited divorce
    • Separation
    • Cruelty or excessively vicious conduct
    • Desertion
  • Additional grounds for absolute divorce
    • 12-month separaton 
    • Mutual consent
    • Adultery
    • Imprisonment for a crime
    • Insanity

Additionally, there are no-fault divorces and at fault divorces and they may be treated differently when it comes to awarding alimony and sometimes, custody if the fault ground negatively affects the children. A no-fault divorce is based on either a 12-month separation or mutual consent. At fault grounds include adultery, actual desertion, and constructive desertion (typically this is cruelty). At-fault divorces will not be granted if the plaintiff is also determined to be at-fault.

 Divorce filings are handled by county court. Filing can take place where either of the spouses resides. Each county has its own procedures and fees and should be researched prior to filing.

 d. Support, Settlement and Custody Agreements

It’s important to note that if you have financial and custody issues to work out before the divorce is finalized you must do so before the waiting period is over or the decisions will be deferred to the court. The court will look to the filing spouse for their preferences.

If you both hire attorneys and litigate in the courts, you will likely spend a minimum of $30,000 – $40,000. Mediation can reduce fees to less than $10,000. Courts will appoint legal representation for those in need or you can negotiate the financial and custody terms yourselves.

 So, that, in a nutshell is “How to Get a Divorce in Maryland.” It’s a bit more nuanced than this as, stated earlier, divorce can be a multi-faceted, complicated, entangled, frustrating, non-linear, jumble of a messy process, right? Call or request a consultation if you want more info. 

Get A free Consultation

484.321.6990

hello@trunorthdivorce.com

Six Elements of a Successful Divorce Mediation

As a process to divorce, mediation has grown in popularity for several reasons. It’s significantly less costly than other assisted alternatives, it empowers couples to control their own destiny and make decisions that best serve them and their children (as opposed to relinquishing the control to attorneys, court masters, and judges), and it creates less emotional damage for all involved. On the other hand, it may not be the best solution when one of the parties is not able or willing to fully engage in the process. A properly-qualified mediator can work with a hesitant party to improve the chances for success. Nonetheless, you should consider six critical elements to a successful mediation.

Here Are Six Critical Elements For An Effective Divorce Mediation:

1. Readiness:

It is often the case that one spouse is way ahead of the other in calling it quits. If both spouses aren’t ready to dissolve the marriage, discuss the distribution of assets, or deal with custody issues then the process is crippled before it even gets started. To effectively mediate, both must be ready to move forward and not use mediation sessions to attempt to derail the divorce. Readiness also includes having emotions in check. Divorce is, indeed, a major life event that makes for strong emotions but these must be largely dealt with outside of divorce mediation sessions. 

If you are the reluctant spouse or know that you’re feeling too emotional to productively engage in divorce mediation, consider utilizing a divorce coach to help you address your concerns and issues until you feel ready. Beware, though, that If you stall the process for longer than your spouse can tolerate, he or she may hire an attorney and begin the litigation process—this may result in far greater expense and emotional damage.

2. Openness to Options:

A good mediator will educate the couple about alternatives to settlement options regarding asset division, support, and custody issues. She is an expert in divorce and is trained to address the pertinent issues. It’s good if you and your spouse have already had discussions around the key issues, but even better if you both enter the mediation process with an open mind about creative alternatives that might improve your situation.

3. Full Disclosure:

Your mediator can only incorporate the information you share with her. Key information includes what you envision as your needs and wants for your future apart as well as all income, assets and liabilities. Creative solutions to divorce settlements are born from an in-depth understanding of needs and concerns, also the available resources. If a mediator senses there are trust issues, she’ll terminate the divorce mediation process and suggest you consider litigation, instead.

4. The Right Mediator:

Not all divorce mediators are alike! Many family law attorneys have turned to mediation as a way to boost their incomes in a competitive marketplace but they aren’t really committed to a non-adversarial approach. If you consider a mediator attorney, you need to ask them if they exclusively mediate or whether they also litigate—you want someone who is committed to a less adversarial practice and not just looking for a way to boost revenues. Also, you want someone with expert training in the divorce issues that are most important to the both of you. Lawyers are experts in the law but not necessarily in divorce finances and custody. If your primary issues are financial, then consider a divorce financial expert, i.e., a mediation trained Certified Divorce Financial Analyst (CDFA®). Even better, a CDFA® who is also a CDC Certified Divorce Coach® who can help you make decisions that are consistent with your values and tackle some of the emotional issues getting in the way of a settlement that will serve both of you well into the future. If there are custody issues as well, a CDFA® mediator can incorporate a parenting specialist into the divorce mediation process or, if necessary, assist you in a collaborative divorce that incorporates parenting, financial, and emotional specialists in addition to attorneys for both sides (but beware, collaborative divorce can get quite expensive relative to mediation).

5. Sufficient Time:

Don’t let anyone rush you into an agreement you’re not ready for. Yes, in litigation there’s a clock running, but not in mediation! Take time to consider your options and make a decision that you won’t regret in the future! 

6. Attorney Review of Your Settlement:

Once you are satisfied with the agreements you’ve made with one another and have a draft of a Settlement Agreement, you should pay an attorney a few hundred dollars to ensure your Agreement is sound and can’t be legally challenged in the future. Once processed, it’s difficult and costly to challenge your Agreement, so make sure it’s thoroughly reviewed before you sign anything.

Starting the Divorce Mediation Process

Mediation is a great process for divorce and one you won’t regret if you make sure you’re ready and ensure you have the right mindset, fully disclose your finances and what’s important to you, allow yourself the time needed to make decisions you won’t later regret, have chosen an ideal mediator, and do a legal review before you finalize your Settlement.

Get A free Consultation

484.321.6990

hello@trunorthdivorce.com