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No divorce is ever “easy”, but divorce from an addict can have its unique set of challenges. [Read more…]
The Ugly Truth About Women and Financial Security
As many of us are putting the final touches on festive holiday wish lists, let’s spend a few minutes on a topic that is on top of a less-desirable list: those who are less likely to experience financial security in retirement. [Read more…]
Divorce in the age of social media
Social media is everywhere these days. However, going through a divorce means that you may want to think twice before you hit “share”. Read on for tips to survive a divorce in the age of social media! [Read more…]
Your Blueprint for Surviving Financial Storms
Saving is difficult when life is normal and the sun is shining. But what happens if you lose a job, face a divorce or a medical diagnosis? Read on for advice for overcoming income shocks. [Read more…]
Do’s and Don’ts for Boomers Living in Sin
After a divorce, many Baby Boomers swear they will never marry again. Then they fall in love. In a previous post, Boomers: In your next relationship just shack up, I listed the financial incentives that are fueling the surge in seniors shacking up together. In this post, I will share tips on how to handle your finances when living in sin.
Share Household Expenses? Definitely
Many divorces are sparked by the inability to talk openly about money. In your post-divorce relationship, don’t fall into the same trap that got you into that divorce. Make it a priority to go over the money situation once a month. Share the household expenses equally or proportionately based on your respective incomes. Here’s where that joint account comes in handy to pay the bills. You each deposit your share of money to cover expenses and pay for them out of the joint account.
When I say “household expenses”, I am not talking about improvements to the house; fund those by the person who owns the house. Sharing in the cost of remodeling or major repairs can get complicated when one of you passes away first without clearly covering this situation in the estate planning documents. Again, I can refer you to excellent estate planning attorneys in the Brazos Valley.
Mingle Assets & Debt? Nope
When shacking up together, retain separate checking accounts. One joint account is fine as long as you also have your separate account. Do not apply for a joint credit card. Do not comingle debt.
Do not contribute toward the purchase of a major asset that is titled to your partner. Talking about houses, vehicles, boats, airplanes and investment accounts. Ok, if you just have to contribute, be sure your name is also on the title. If you are leasing an abode, get both your names on that lease. No exceptions. Consult with an estate planning attorney. Ask me for the best ones in the Brazos Valley. Do not get yourself into the pickle of co-owning a house with your partner’s mother after your partner tragically and suddenly drops off the perch.
Get a No-Nup? Yep
Ok, it might not be romantic, but get a no-nup anyway. This is a legal document that addresses property division, financial support and debt planning for the possibility that your relationship ends prior to either of you passing on. You want to be clear what will happen to your assets if and when the relationship ends. It is not a DIY project. You will need a family law attorney, so call me if you want recommendations.
Boomers: In your next relationship just shack up
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 60th 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 divorce after 50 may affect retirement
Fact: 30% of divorced women over the age of 62 who are still single live at or below the poverty line, according to research by Susan Brown, a professor at Bowling Green State University who has chronicled “gray divorce” throughout the years.
If we were to compare that to married couples in the same age demographic, only 4% live at or under the poverty line.
I just did a piece for the Chicago Tribune and Janet Kidd Stewart on divorce and retirement benefits – and why I think collaborative divorce may be the single best decision divorcing couples over 50 can make. Aside from the fact that collaborative keeps your divorce civil, respectful and private, the process also works to address your immediate and long-term financial needs (including those retirement years). [Read more…]
How much will this divorce cost?
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
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
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.