The Role of the Financial Neutral in the Collaborative Process
Working with a financial neutral throughout the collaborative divorce process can help divorcing couples make the right financial decisions. By: Gina Gallo, CFP®, CDFA™ Working as a Collaborative Team member, the financial neutral’s objective is to provide financial assistance as requested with the goal of assisting the clients in achieving what they perceive as their best possible outcome under the circumstances. In fact, that is one of the questions I ask at a first meeting: “Tell me what would be the ideal financial outcome for you in this divorce?” Based on the answer, the n...
Separating Your Emotions from Your Finances
There are many parts to breaking up, including breaking up legally, physically, emotionally, and financially. Women, in particular, must recognize that all these parts come into play when divorcing, and must be separated. Aim to separate your emotions from your finances, including treating the financial part of your divorce as a business transaction. By Ellie Lipschitz and Dorian Brown Focus on your financial future. Keeping your emotions in check is key to managing your money throughout your divorce negotiations, and more importantly, the long term. A forward-looking focus gives women t...
5 Tips to Improve Your Financial Situation During Divorce
Find out how to improve your financial situation with these five useful tips, which will help you get by financially while you’re going through diovrce. 1. Consult with a divorce financial planner to have your financial status evaluated, and to establish a budget based on your situation and expected cost of divorce. Consulting with a divorce financial planner will not only bring clarity to your financial situation, but it will also help you prepare and be more financially grounded in your pre- and post-divorce life. 2. Separate all your monetary assets such as joint bank accounts and t...
Finding Money to Pay Your Bills
Advice for creating financial security while going through a divorce. As you go through the divorce process, you need an in-depth understanding of your financial issues and situation. If you weren’t involved in managing your family’s finances, or if it’s been a challenge for you to do so, consider hiring a financial professional to help during the divorce process – and afterwards if necessary, particularly if your financial situation is a complicated one. Although there can be many financial issues that will keep you up at night during divorce, if you’re like most people, most ...
Spousal Support and Alimony Overview
Sometimes known as alimony or maintenance, spousal support will be one potential source of income – or expense – for many divorced people. The goal of spousal support is to provide financial support to the spouse who needs it in order to keep the family on an equal setting; however, there is an underlying duty for each spouse to work towards being independent of each other. (One exception to this would be a very long-term marriage in which the spouses are near or at retirement age, and it is unreasonable to expect the spousal support recipient to be able to re-enter the workforce and be...
Child Support Overview
An introduction to how child support is calculated in a divorce involving children. Generally speaking, child support is determined by guidelines mandated by the state or province where the family resides. The major factors taken into consideration are: The age of the child or children The number of children in the family The custody arrangements for the child or children The income of each spouse. Your lawyer or financial professional will enter your information into software, which supplies a recommendation for the base level of child support. If you and your ex are trying to...
Debt and Divorce Overview
When you divorce, you’ll need to divide your debts as well as your assets. Here’s an overview of how to handle marital debts. When you divorce, you’ll need to divide your debts as well as your assets. Just like your assets, your debts will also be classified as marital (community) or separate. Generally speaking, each spouse is responsible for paying off any individually-incurred debt created prior to the marriage; these are separate debts. However, debts incurred jointly during the marriage are the responsibility of both spouses – regardless of who actually spent the money. Joint o...
USA Property Division: Community Property vs. Equitable Distribution
There are two ways to treat property division in the US, and it depends on which state you live in. If you reside in a US state, and you and your spouse can’t agree on how to divide jointly-owned property, then the courts will divide it for you according to “equitable distribution” or “community property” principles. (By the way, your joint debts will also be divided according to either equitable distribution or community property principles.) Although the specific details vary from state to state, the main difference between the two schemes is that in community property states, t...
Marital Property vs. Separate Property in Divorce
Here’s an explanation of how the courts typically define separate property and marital property in divorce. In a divorce, all assets are designated as either separate or marital (known as “community” in some states) property in accordance to the state or provincial laws and prenuptial or marital agreements (if any). All marital property will go into the marital pot to be divided between the spouses, and each spouse gets to keep his/her own separate property (assuming it has been kept separate for the entire marriage). Exactly what constitutes separate vs. marital property can be a gra...
9 Steps to Start Separating Your Finances During Divorce
As you take steps to separate your finances, you should document all of your assets and liabilities at the time of separation. Here are the steps you should consider to start managing your finances early in the divorce process. You need to start to minimize the financial ties between you and your spouse during the divorce process. A joint account mean that you’ll continue to be attached to your spouse’s spending habits and debts – not only during the divorce process, but even after the divorce is finalized. It may not be possible to close all of them before your divorce is finalize...
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