17 Apr How working with CDFA makes a difference in Divorce

I believe one of the most important roles I have, as a Certified Divorce Financial Analyst (CDFA)  is  providing a reality check for my clients before , during and after divorce. I am pragmatic and not judgmental. I take the words in settlement agreements and turn them into numbers.  .

Firstly,  I do this  by having a systematic approach  for  pulling together the financial numbers  and information that  they need to start separation discussions whether the are working in mediation, collaboration or traditional negotiations.

Secondly,  I’m focused on finding solutions that work in both the short and long term.  I create projections based on clients goals and possible settlement options , whether that be proceeds from sale of their house , impact of  varies duration and levels of support, impact of future income and savings. These projections  educate and show clients  the  future implications of  what is being proposed. They also show the  the impact of  other decisions clients  have control .

I had a client who was the main breadwinner of the family. She went back to school to upgrade her skills when her husband was downsized from  his corporate job. She found a very well paying position and  has had a number of promotions since starting at  her company. Her husband  found it difficult to get back into the workforce in his previous role. Discouraged, he  started a small consulting practice  but wasn’t having much success in getting clients.  When they decided to separate, her income was substantially more than his. She was very resentful of having to make Spousal Support payments to her husband.  This looked like it was going to stall the settlement negotiations.  I worked with her to understand her current & future spending, her future income   and have her see the impact of various levels of support. I helped her set priorities going forward.  Once  she could see into her financial future,  she agreed to a spousal support payment schedule she  and her spouse could live with  as she now  felt confident about her own financial future.

17 Apr Do I need Financial Advice when I’m going through Divorce?

Divorce is not only the ending of a marriage but it  involves  the unbundling of the business part of the relationship .. separating assets.. the house, retirement savings, pensions, dealing with debts, future  income, future financial goals. If you are facing divorce.you are likely  beginning to understand that there is a legal, emotional and financial aspect of divorce.    You should reflect on where you’re at  and prioritize what professional help you need most.  You may need to  get emotional support from  a counsellor or therapist to prepare you emotionally and financial advice from a divorce financial consultant  who will provide the financial guidance to  have you ready to begin  legal separation discussions

If any one of the situations listed below is your case, you have good reason to get some expert financial advice;   if you face two or more, going without seeking advice, is risky.

Personal

  • You don’t understand your situation
  • You have a good income and a busy schedule, so you would be better off if someone else did the paperwork
  • You want to be sure you’re doing the right thing and have the confidence of knowing it’s being done right

Property

  • The division of marital assets and debts is unequal
  • Home or real estate is being kept to sell later
  • Major asset is being divided or sold
  • You aren’t sure how to value some assets
  • You aren’t sure how to value pension from employment during marriage
  • One or both spouses are self-employed owners of a business or professional practice

Your spouse

  • You can’t agree about important issues
  • You can’t get information from your spouse about assets or income
  • You suspect your spouse may be hiding assets
  • Your incomes differ by more than 20%
  • There are special needs or health problems

 

28 Jul How do you prepare for some of the unexpected financial challenges of a divorce?

Divorce, for most couples, is an unexpected event as a whole. Couples need to be prepared for unexpected financial changes and challenges they will face as divorce is the breakup of not only a family unit but the breakup of an economic unit as well. Each spouse needs to look at their finances from both quantitative and qualitative viewpoints to understand what’s important to them. In other words, divorcing couples need to take into account everything from balancing a new budget to maintaining a certain quality of life. Knowing this information will allow them to better assess how they can move forward on their own.

Here’s a short list of financial questions divorcing couples should consider:

•Do they have a “divorce” budget? How will they pay for the professionals they may need to work with?
•Have they thought about how bills /expenses will be paid until a final agreement is reached?
•What will it cost to maintain two households rather than one?
•Have they considered renting rather than purchasing another home?
•Have they reviewed all of their children’s activities and prioritized what they can do and what they can afford?
•Will the stay-at-home spouse need to consider going to work full-time or part-time?
•If there is a business, does the business need to be sold?
•Is there existing debt (mortgage, lines of credit)? Have they thought about how this debt will be managed? Will they need to take on additional debt to fund future payouts?
•How much will the divorce affect retirement plans?
When working with a collaborative team that includes a financial neutral during your divorce, questions like these ones are often raised and then answered. This allows couples to make informed decisions about their financial plans and futures.

28 Mar Your Housing Options after Divorce Just improved

Major banks in Canada recently announced a reduction to their fixed rate mortgages. It seems bank executives are more confident about the housing market and the likelihood of a major correction in housing prices.

This should provide good news for people who are separating and making decisions of how they split their assets, in particular, the matrimonial home. For many, keeping the house is important for couples with children and keeping a stable environment for them. For older couples, whether they choose to buy a partner out and remain in the matrimonial home or sell and each purchase a new home, lower interest rates allow for more flexibility when it comes to possible settlement options.

Managing two households costs more than maintaining one household. With late in life divorce, retirement plans are greatly affected by housing costs.

Many people finance equalization payments owing to spouses through refinancing existing mortgages, so lower mortgage rates in those situation helps.

If selling the matrimonial home is part of a settlement plan, lower mortgage rates make home buying more attractive. If keeping the matrimonial home is an option, managing cash flow is easier with lower monthly mortgage payments.

The home you want to keep or the home you want to buy after divorce may
now be a real possibility.

20 Dec

Our book “When Harry Left Sally or Sally left Harry – FInding your way through Grey Divorce” has be published. It will be available for sale at www.whenharryleftsally.ca  early January 2014 . You’ll be able to find the EBOOK version on AMAZON, ITUNES and KOBO.

The book provides insights  on what  to expect of a “Grey Divorce” or divorce that occurs late in life. We  have  taken our real life experiences and give couples splitting up an idea of the  financial and personal situations that await them. The books sets out to reassure and advise older couples going through divorce.

I’ll post the official launch details shortly.

20 Nov Exciting News about “Grey Divorce” book

Announcing  the upcoming  publication of our book  “  When Harry Left Sally – Finding your way through Grey Divorce” .   It will be available in a couple of weeks.  I’ll keep you updated to let you know when it will be available to order from online retailers and dedicated website for “When Harry Left Sally”.

Co-authored by Marion Korn, a well known senior family lawyer and mediator, and Eva Sachs, a skilled Financial Planner, specializing in divorce, the book shines a light on the growing numbers of grey divorcees and their unique concerns and goals.  Through stories collected in their years of practice together, Marion and Eva challenge the reader to change the way they approach their divorce. This book is the roadmap every divorcing grey couple needs.

Here’s a preview look!

Finding your way through Grey Divorce

17 Sep Divorce Costs

According to a recent AVVO divorce study, couples are most concerned about the costs of divorce.  People today have more choice in how they will proceed with their divorce..from  doing it themselves , mediation, collaborative practice,  lawyer negotiations to court.  The survey  indicated that a majority of people  (58%)  site the cost of divorce as a major factor/concern  in moving forward with the divorce.  When reviewing what approach may work best for  a family, making the right choice in terms of professional fit , control, timing are all  things that need to be considered. However, the reality of the total  expense for the family appears  to be a big  part of the decision.

It’s important to establish from the beginning some sort of “divorce budget”and understanding the value proposition of any process  you ultimately choose.  Being quoted the hourly rate or first retainer  is not enough information. Getting the answer .. “it depends” to the question “How much will this cost”  may not be good enough anymore.  Understanding that other professionals are part of a divorce team and learning  what they all do in the process, what they charge, what their involvement may be , and  what couples can do on their own, helps  in understanding what the  ultimate  costs may be .

divorceinforgraphic_july20132

20 Aug Do you know where you spend your money?

There was a recent article in the  GLOBE AND MAIL  about  rising costs of household expenses. You  may be surprised with some of the findings.

https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20130815/GICARRICK0814ATL

Do you know that food purchased from stores  spending was down 1.8% but food purchased from restaurants was up 3.6% from a year ago? Landline telephone services were down almost 6%  while cellphone pager and text messaging services were up over 10%.  Clothing and accessories were down almost 3%..  is that a result  of more competitive pricing with US retailers coming to Canada?

The largest increase was surprisingly in pet expenses …  may not reflective in higher food prices but rather  additional health care bills as people to  improve and extend the life of their dear pets.

This is all good information. It’s really  important information to have  if you are facing divorce and  need to see how you’ll manage once you’re on your own.

11 Mar Divorce Costs Followup

As a followup to my previous blog today take a look at this article from the  BBC and UK about the rising costs of divorce.    It quotes a report by the Legal Ombudsman for England and Wales showed complaints by clients in divorce and family law were higher than in any other category.

http://www.bbc.co.uk/news/uk-21611496

Have you gone through divorce recently? What do  you think of the costs involved?   At the end of it all, did you get value for what you paid for?

11 Mar Even billionaires are concerned about the “costs” of divorce

Billionaire T. Boone Pickens was recently divorced from his 4th wife and chose collaborative practice to settle his divorce.

For the whole story, go to http://www.bizjournals.com/dallas/blog/2013/03/t-boone-pickens-on-how-to-save.html?ana=e_abd&u=rk2Eh9uif4Sgj7UM9KhZGpj2jD7&goback=%2Egde_2936590_member_219548098

“The collaborative approach saves both money and emotional wear and tear on families.” Pickens said.

Should non billionaire couples consider the costs of divorce before choosing how they divorce?  Couples should do their research about different processes and the costs of each process.

Creating a  separation agreement with the help of a mediator means you share the cost of one mediator.   If you are choosing the collaborative law approach, you are each working with your own lawyers however,  much of the work can be taken on with the help of  other collaborative team members.

If you have a family professional, rather than your own lawyers,  they help to create and draft a parenting plan.  This is  a shared cost (usually at a lower hourly rate than lawyers).  If you use the assistance of a divorce financial professional, like a Certified Divorce Financial Analyst (also usually at a lower hourly rate than lawyers) to help with gathering the financial information, you’re sharing that cost (and the work too as there is usually one spouse that has handled all the family finances and is better at accessing all the financial statements and documents).

Billionaires become billionaires not only because they make millions… they also recognize when they have the opportunity to save a million or two.