Divorce can have a devastating impact on finances. There are a few choices you can make to lessen the impact.
CONSIDER THE PROCESS YOU UTILIZE TO OBTAIN A DIVORCE:
Costs of Processes:
The more you pay in attorney fees, the less money you will have for yourself and your family. Litigation is the most expensive process, so more and more people are looking for more affordable solutions. Mediation is the most cost-effective process, with an average cost of $1,500 to $1,900 for most couples, followed by collaborative divorce.
People that utilize mediation and collaborative divorce tend to be more satisfied with the results of their divorce, and they save money doing so.
Know your cash flow.
Sometimes people do not have an understanding of where all their money goes, which makes it difficult to make decisions regarding finances. Laurie can help you get a handle on your finances. You can also use resources such as mint.com or this worksheet.
Think about short term and long term goals.
How are you going to manage the immediate future? What would you like your life to look like in five years? What are your financial goals for ten years down the road, or twenty years? How will you support yourself when support runs out? Thinking about these things may be stressful, but can be helpful in resolving your divorce. If you don’t have all the answers, that’s okay, the answers may become more clear as you go through the process.
Some of the most common concerns are:
- When one spouse owns a business
- Income Swings From Year to Year
- Dividing Retirement Accounts
When one spouse owns a business:
- A business is a marital asset subject to division, so the value of the business has to be determined.
- The income of the business owner has to be determined for spousal and child support purposes.
- All the processes are effective at working with this issue, but if you avoid litigation you only have to pay for one valuator, so huge cost savings result.
Income swings from year to year:
When couples avoid litigation, they have a number of options to resolve spousal support. Laurie will work with you to determine which option is best for you.
Penalties are not incurred when retirement accounts are properly transferred from one spouse to a qualified retirement account of the other spouse. Sometimes it is possible to receive a cash disbursement from a retirement account without an IRS penalty. Laurie will explore these options with you as part of your divorce.
AFTER THE DIVORCE
- When sharing expenses for the child/children it can be difficult keeping track of what each parent owes the other. One way to get around that is for each parent to pay half the cost to the different people that have to be paid, ie., each parent pay half to the private school, half to the doctor, or each parent write a separate check for half the costs of sports.
- After a divorce is finalized, any provisions for the former spouse in a will, trust, or guardianship are revoked by operation of law. They need to be updated and reaffirmed if you wish to have them remain as your beneficiary.
Contact Laurie at 440-526-6411 for a free initial consultation so she can help you resolve the financial issues of your divorce. She will help you to achieve resolutions that work for you. In addition to weekday hours, evening and weekend hours are also available.