Bryan Archives - Tracy Stewart, CPA

Boomers: In your next relationship just shack up

July 20, 2015 by Tracy Leave a Comment

It used to be called living in sin. It is now socially acceptable and growing by leaps and bounds among boomers. Shacking up is a popular alternative to marriage and divorce, even a nice collaborative divorce. Older people are living together for an average of nine years. Financial reasons top the list of incentives.

Loss of Income. Alimony usually stops when the recipient marries. If you have survivor’s pension benefits, you might lose those if you remarry. If you are receiving a share of your late or former spouse’s Social Security benefits, you could lose those benefits if you remarry before your 60^th birthday. If you remarry after age 60 (age 50 if you are disabled), you can collect benefits on your former spouse’s record.

Potential Financial Burdens. In Texas, both spouses are on the hook for most debts incurred during the marriage, regardless of who incurred the debt. Then there is the cost of nursing homes at $5,000 a month in the Bryan College Station area. As a married couple, such costs can devastate the surviving spouse’s financial security.

Tax Disincentives. If each of you has income, as a married couple you could be thrown into a higher tax bracket. As singles living together, you each get $3,000 of capital losses to offset ordinary income, which results in an offset of $6,000 over the two tax returns. As a married couple filing with a joint tax return, you two would only get $3,000 to offset.

Estate Planning Risks. Protecting their children’s inheritance is a big reason Baby Boomers opt to cohabitate. Assure yourself and your heirs that their inheritance will remain intact. Visit with an estate planning attorney before you move in together. Contact me if you need a recommendation for an excellent estate planning attorney in the Brazos Valley.

In my next blog, I’ll give you tips for what to do and what not to do when shacking up. Do’s and Don’ts for Boomers Living in Sin

How much will this divorce cost?

May 2, 2014 by Tracy Leave a Comment

I hear questions from people who come to me for divorce financial advice. No matter whether we are talking about College Station or Houston, the answer is always “it depends.”

It depends upon which divorce process you choose. Do it yourself, litigation, mediation or collaborative. Even the do it yourself can be expensive if you are not fully aware of the complexities of your financial situation. Don’t be like most people. Don’t assume your situation is simple.

It depends upon how cooperative you and your spouse are going to be with each other. Will you compromise quickly? Will you fight over the vacation souvenirs? (Yes, I saw that happen.)

It depends upon whether you are counting the future hidden costs of incomplete information. Don’t be focused only on the present. Look ahead at the possible financial gotchas that will bite you if you shortcut your divorce. Hire competent professionals: attorney, divorce CPA and child specialist.

It depends upon whether you hire the cheapest or the most expensive attorney. Don’t do either. Hire an attorney with average hourly rates. Ask other professionals for recommendations. Your friends and colleagues will give you names, but that doesn’t mean their favorite is the right fit for you.

It depends upon how organized you are. The more organized, the more you can save on fees.

Low Cost Divorce

August 5, 2013 by Tracy Leave a Comment

Are you looking for a clean, quick divorce in Bryan/College Station that avoids expensive attorney fees? Your answer is the CPA-driven early intervention mediation. Another name for this is “let’s get it done without wasting money.”

Is this right for you?

You should seriously consider this option if you both answer yes to the following questions.

Are you both on reasonable speaking terms?
Do you both believe you can reach mutual agreements?
Do you both want financial advice about your property division and how it affects your future?
Do you want to arrange your settlement agreement to avoid income tax problems?
Are you ready to move at a quick pace?

Why a CPA mediator?

Attorneys are great with the legal issues, but not so great with the financial issues.

I met a disappointed ex-husband whose Bryan attorney hadn’t told him about the risks of not being able to buy a new home after the divorce. Had he known about this, he would have negotiated differently for the property settlement. He cannot qualify for a mortgage on a new home as long as his name is still on the mortgage tied to the former marital home. His ex-wife is in no hurry to refinance the mortgage.

A New York City divorce attorney found my website and has been calling me to consult on divorce cases. Last year I taught him about the Internal Revenue Code rules on alimony recapture. That kept his client out of hot water with the IRS.

There are many more financial issues that a divorce CPA mediator can identify during mediation. This expertise can help you avoid nasty post-divorce financial surprises.

Who writes the divorce decree?

Just as attorneys shouldn’t pretend to be CPAs, accountants shouldn’t pretend to be attorneys. After I help the two of you have a successful mediation on property and children issues, I recommend two reasonable attorneys who want to write your divorce documents. I pick these Bryan/College Station divorce attorneys carefully for their efficiency and their cooperative style. They will advise you on legal matters, but they won’t try to undo your agreement and burn through your savings account with large legal fees.

If you would like to know more about getting your divorce done without wasting money, ask me about mediating your settlement. Drop me an email at stewart@texasdivorcecpa.com.

Why Collaborative Law Divorces Save You Time, Money and Hassle

July 22, 2013 by Tracy Leave a Comment

The collaborative law divorce process is the preferred process of educated couples seeking divorce. Like you, they want to save time, money and hassle. These couples like the benefit of being able to make decisions with the help of experienced collaborative professionals. These couples like being in control.

Collaborative couples don’t have to wait for lawyer responses or court dates. They can wind up their divorce at their own pace. When they have obligations in their “real” lives, they can schedule team meetings around those events. Their professional team works around the couple’s schedules instead of the court dictating their schedules.

Most collaborative alumni tell me they are now communicating better than when they were married. This is because they selected a Mental Health Professional for their team who taught them how to effectively communicate as co-parents.

Collaborative couples select a single neutral CPA who understands their financial situation. The neutral financial professional analyzes the finances to maximize how the redesigned family will cover the children’s expenses and spousal support. The collaboratively trained CPA helps the couple decide how to stretch their limited funds to benefit the entire family.

If you would like to learn more about collaborative law divorce options in Bryan/College Station, just let me know.

Divorce: Watching Out for Your Financial Future

July 15, 2013 by Tracy Leave a Comment

Bryan/College Station couples in divorce who stay out of court can get ahead financially by choosing the collaborative law divorce process. Unlike all the other divorce processes, collaborative law divorce provides a neutral financial advisor who has particular experience in helping couples move from we to me. You can save divorce costs and have a new financial plan that gets you going in your new life.

Divorce is one of the most stressful transitions you can face. Most individuals just want out, no matter what the cost. Unfortunately, without divorce financial advice, the cost can be very steep indeed. It can include decades of fighting in court and difficultly making ends meet. The usual financial planning structure does not work in divorce.

Your financial considerations hinge on the fact that you are moving from a couple to a couple of individuals. You and your spouse may have always differed in your financial planning opinions, but you had to compromise in some way during your marriage. After the divorce, each of you can make your own choices. This transition in planning is unique to divorce.

In a Bryan/College Station collaborative law divorce, you work with a team of experts trained by the Collaborative Law Institute of Texas. This includes attorneys for both sides, a neutral CPA/financial planner and a neutral divorce coach/child specialist. The neutral CPA develops a plan for splitting your property and is prohibited from taking either of you as a client after the divorce.

In mediation, you usually only have your attorney to advise you, missing the financial expertise of the collaborative law process. If a financial planner is engaged for a mediated divorce, that person can accept either party as a client after the divorce. This is a financial risk to you if your spouse promises to be a paying client after the divorce. Only the collaborative process ensures the protections of a truly neutral financial advisor.

I have worked on about 100 collaborative law divorces. If you would like my advice on which collaborative law attorneys to interview, feel free to contact me at stewart@texasdivorcecpa.com.

How to Keep Control of Your Divorce Costs

July 8, 2013 by Tracy Leave a Comment

Divorce costs can spiral out of control if you don’t keep track of them. There are two easy steps to keeping control of your divorce costs. Whether you live in Bryan/College Station or Houston, these steps will work for you.

In a collaborative law divorce case, you will know at all times what your combined expenses are. It is part of the transparency of the collaborative process. Unfortunately, that is not the situation with traditional litigated cases. Finding out what your spouse’s expenses have been and will be is a challenging task in a litigated case.

The first step in controlling your divorce costs is to choose the collaborative law divorce process. Spending money on such items as valuing the real estate or the family business is a decision discussed in meetings. The issues regarding whether and how to incur costs are openly discussed in joint meetings with attorneys and the neutral CPA until both spouses understand the pros and cons and come to a mutual agreement.

The best way to control costs is to continually see what they are. The smartest collaborative divorce couples with whom I have worked were the ones who opened a new checking account just to pay the divorce bills. They moved money into this new account and then tracked what they were spending via the new account. If they paid for a divorce bill with a credit card, they paid that one credit card charge from the new account. All costs were shown in this account. These couples knew exactly how much they were spending on their divorce and were able to ratchet the costs down when desired.

I have worked on about 100 collaborative law divorces. If you would like my advice on which collaborative law attorneys to interview, feel free to contact me at stewart@texasdivorcecpa.com.

Four Ways to Keep Costs Down in Your Collaborative Law Divorce

July 1, 2013 by Tracy Leave a Comment

Even divorcing couples with wealth don’t want to waste it on an inefficient divorce. This is why the smarter Bryan/College Station couples that are talking about divorce are choosing collaborative law divorce. The collaborative law process offers couples privacy, control and methods to keep the total cost down.

The first step in saving money during a collaborative law divorce is to hire professionals trained by the Collaborative Law Institute of Texas. The Institute teaches how to be efficient from start to finish. I have been on cases with attorneys who had not been trained by the Institute. The result was a slow, mishandled and expensive experience for the couple. Be very careful to hire a collaboratively trained attorney. Ask about the training when you interview lawyers.

The second step is to pay attention in meetings and do what you have committed to doing. You will not be asked to do anything you cannot do. The collaborative case will go at the pace to which you agree. If you have a work deadline or family event, the case will slow down while you take care of these. But once you have committed to providing information for the case and a meeting has been scheduled to review that information, if you procrastinate and don’t finish your homework on time, the cost goes up a bit. When meetings have to be rescheduled, it costs money to check calendars, discuss alternative dates and process emails that communicate the rescheduling options and agreements.

The third step is to make your divorce a priority. If you can do this, the process will go faster and more efficiently. Ask to see the meeting agenda a few days ahead. Show up for all the meetings on time and prepared. Provide information when you say you will – try not to be late. Follow up to be sure your information was received.

In my experience, collaborative law divorce is usually significantly quicker and less expensive than traditional litigated divorce. You can reap even more savings when you follow these three steps during your collaborative law divorce.

I have worked on about 100 collaborative law divorces. If you would like my advice on which attorneys to interview, feel free to contact me at stewart@texasdivorcecpa.com.

Know Your Options: Reduce Your Divorce Costs

June 24, 2013 by Tracy

Bryan/College Station couples who are contemplating divorce struggle with the fear of running through all their money. You have heard stories of normal people like you having scorch the earth divorces, huge attorney fees and an empty retirement account when it is over. You can avoid those horrors by understanding your divorce options.

At the basic level there are just three kinds of divorce processes. You and your spouse can choose the best on for you. I’ll give you my take on these from the vantage point of a financial advisor, not an attorney.

Do it yourself

This is the kitchen table option. I have seen this work best when couples have no minor children, no mortgage and no retirement savings. This option can be done without attorneys, if you have a very simple situation. I have seen couples with just one of those attributes (children, mortgage or retirement accounts) try to go the DIY route and crater before they could reach an agreement – but after they argued themselves into a tense situation. Your situation really does need to be simpler than simple for this process to work.

Lawyer up for litigation

This is the traditional route. You hire a lawyer and you start the old fashioned process. Each side demands the same information from each other. Attorney fees climb as each attorney prepares for trial. If you and your spouse don’t agree on everything, you will end up in mediation – and if that fails, you end up court. The cost of that is shocking plus you have lost control of the outcome. As bad as I have made this sound, there are cases that belong in litigation.

Get a collaborative law divorce

A Brazos County collaborative law divorce is one that operates under the protocols of the Collaborative Law Institute of Texas. You want to work with an attorney who has been trained by the Institute. (I have been in cases with untrained attorneys. The divorces were painful and expensive.) In a collaborative law case, you are in control of the outcome, the speed and the cost. You learn how to co-parent with your ex-spouse. Everything is focused on helping the two of you resolve your differences with dignity and more forward to your newly defined lives. Everyone is sensitive to your costs and work with you to minimize the financial hit.

When you are ready to look for a divorce attorney in the Brazos County, contact me. I can help you find the divorce attorney who best fits your preferences.

Don’t be Fooled by Your Spouse’s TRS Statement!

May 20, 2013 by Tracy Leave a Comment

Texas TRS pensions are commonly seen in Brazos County divorces. If your spouse has a TRS pension and you are in a divorce, don’t be tricked into thinking the account balance on the annual statement is the value of that pension benefit.

The account balance on the front of the TRS Annual Statement of Your Member Account is merely the amount your spouse has contributed to the account plus the amount the state of Texas has contributed to the account plus the interest earned on the account. In contrast, the value of the account (known as the present value) is the amount of money that would need to be invested today so as to have enough to fund the retirement pension payments starting on the retirement date and going through the estimated lifetime of the retired employee.

Calculating that value involves complex mathematics. I will spare you those details. But it is good to know that pension values are calculated using standards from the Actuarial Standards Board, specifically Actuarial Standard of Practice Number 34.

The amount of money it will take to pay out that pension is significantly greater than the account balance shown on the annual statement. The longer the employee has been contributing into the TRS pension plan, the bigger the pension benefit present value will be.

Why should you care? Because the bigger your spouse’s pension value, the more there is to share in the divorce property settlement. This is true for any pension, not just a TRS pension.

If your family property includes a pension, feel free to contact me with your questions. I can also refer you to the best local Brazos County attorney to meet your individual divorce needs.

The Secret of Finding the Best Divorce Attorney in Brazos County

May 13, 2013 by Tracy Leave a Comment

The best divorce attorney is the one who best fits you and your divorce issues. Don’t think this would be your friend’s divorce attorney. Nor the attorney with the biggest caseload. Nor the biggest law firm. The optimal attorney for you will be the one who has experience with your issues, communicates well and shares your priorities.

No one has exactly your divorce. It only takes one small condition to make your situation significantly different that of someone else’s divorce. You need to find the attorney with experience in your particular issues. If you own rental real estate, you need an attorney with experience in negotiating effective settlements involving rental units. If you are not sure how to proceed with your case, you need an attorney who can offer you choices – one who is great in the courtroom, an effective negotiator and is trained in collaborative law.

Communicating well means communicating easily with you. Are you comfortable with emails? Would you like an attorney who prefers phone calls? What are your needs for speedy replies from your attorney? I had a client who resorted to sending her local attorney a certified letter just to get his attention.

Know what is important to you. Do you want to save money? Then I recommend you seek an attorney whose style includes welcoming your do-it-yourself assistance. Do you want to have a cordial co-parenting relationship with your ex? Then I recommend you seek an attorney with collaborative law training. What are your priorities?

If you are looking for the right divorce attorney in Brazos County, send me an email to stewart@TexasDivorceCPA.com. Let’s take a few minutes to talk about your situation, needs and priorities. I can refer you to the local divorce attorney with the best fit for you.