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A divorce is a period of drastic change in life. An event of life that brings by instability in several, if not all aspects of what we know as normal. But reading this article, I couldn’t help but think of the bright side of change. That bright side that may be so hard to find some times, is part of all events of life. We are starting thanksgiving week. And I wanted to step away from the serious aspects of y work, and invite you to be thankful. If you are alive today, you have something to be thankful for, look inside and try to find that bright side of change, this will bring a much needed feeling of optimism and positivity to your day.
Posted on October 22, 2012 by Tatiana in Alkaline Lifestyle.
Is your glass half empty or half full? It all depends on the lens through which you look at life. We can all benefit from these 5 Tips For Being More Positive and finding the best in our everyday and in our life. People who look at life in a positive way are happier, and healthier, have better relations, and are more successful in all aspects of life.
An alkaline lifestyle is a lifestyle of positive emotions and a sense of balance with yourself and your surroundings. That balance translates in emotional, mental and physical balance which translate in more energy and better health. The following article shares 5 Tips For Being More Positive in life, hope you enjoy it as much as I did.
“A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” ~Winston Churchill
I am constantly striving to see the positive in every aspect of my life. But it’s not always easy.
My dog is currently suffering from a disease from which she will never recover. My mind is still trying to adjust to my relatively new schedule of running Positively Present full time. My wallet is thinning out as I march forward on my entrepreneurial ventures. And, as I get older, I find myself moving in different directions from some of the people I’ve spent a great deal of time with.
My life—and all of our lives—is filled with challenges that make it very difficult to be positive sometimes.
However, I know that choosing to be positive has helped me the most in terms of becoming the person I want to be. Even when things are difficult, I know that being positive—and striving to make the best of whatever situation I’m in—really does make even the most challenging situations easier to bear.
More often than not, I find myself veering toward a positive attitude. (It’s something I never would have done years ago!) I firmly believe that this is because I’ve trained myself to be positive.
It doesn’t always come naturally for me—sometimes it’s alot of work—but I’ve taken five steps that make it so much easier for me to see the good in life.
Step One: Believe a positive attitude is a choice
This step was hard to take at first. I thought that people were either positive or negative (and I was in the latter category). I used to blame my negativity on all kinds of outside forces—fate, experiences, parents, relationships—but never really stopped to think that I could choose to be positive.
Teaching myself that positivity is a choice has been one of the greatest things I’ve ever done for myself.
Now when I find myself in a bad situation, I know that it’s up to me to find the good, to be positive regardless of what’s happening around me. I no longer point fingers and place blame. I realize that everything happens how it happens, and it’s up to me to choose how I want to feel about it. I am in control of my attitude, and no one can take that away from me.
Step Two: Rid your life of negativity
If you want to live a positive, joyful life, you cannot be surrounded by negative people who don’t encourage your happiness.
As a negative person, I attracted negative people. When I decided to make the change to live a more positive life, I had to rid my life of the most negative influences in it. No one is perfect—and perfection isn’t the goal when it comes to positivity—but there were people in my life who were consistently negative, who constantly brought me down, and I had to stop spending so much time with them.
This, as you can imagine, wasn’t easy. It can hurt to distance yourself from people—even when you know they aren’t good for you or your current lifestyle.
In addition to removing negative influences from my, I also had to get rid of some of my own negative behaviors, such as drug and alcohol abuse. I had to take a step back and examine which behaviors were good for me and which were not.
I learned to focus on the positive things I was doing—such as working on my blog and cultivating new, positive relationships—and let go of the negative ones. This process was not easy and, to be honest, is still ongoing, but I know this: It’s hard to live a positive life when negative people and behaviors continually pull you down.
Step three: Look for the positive in life
In every person, in every situation, there is something good. Most of the time it’s not obvious. We have to look. And sometimes we have to look hard.
The old me was content to sit back and just glance around. If I saw negative, I went with that feeling. I didn’t want to look harder or think too much about the good. I found it much, much easier to sit back and just accept what I saw (which was usually the bad).
Now, when I’m faced with a difficult or challenging situation, I think to myself, “What is good about this?” No matter how terrible the situation might seem, I always can find something good if I take the time to think about it.
Everything—good and bad—is a learning experience so, at the very least, you can learn from bad experiences. However, there’s usually even more to it than that. If you really take the time to look, you will usually find something good, something genuinely positive, about every person or situation.
Step four: Reinforce positivity in yourself
Once I started thinking more positively, I realized I had to reinforce these thoughts and behaviors in myself so they would stick. As with any sort of training, the more you practice, the better you get—and, yes, you can practice being positive.
The best and easiest way to do this is to be positive when it comes to who you are. Tell yourself you’re awesome. Tell yourself you look good. Tell yourself you did a great job at work or raising your kids or whatever it is you do.
Be honest with yourself, but do your best to look for the good. And, whatever you do, don’tfocus on the negative. It’s okay to not like everything about yourself, but don’t focus on what you don’t like. We all have positive attributes, and it’s up to you to remind yourself of them every day.
Step five: Share positivity with others
Not only do you need to be positive with yourself for this training to really take effect, but you need to be positive with others. You have to share your wealth of positivity with the world.
The best way I’ve found to do this is quite simple and basic: Be nice to other people, no matter what. Tell someone s/he looks nice today. Tell someone s/he did a great job on that presentation.
Tell your parents or children (or both!) how much you love them and how great they are. When someone is feeling down, do what you can to cheer him or her up. Send flowers. Write notes. Don’t gossip. Be kind to all living things.
All of these things sound basic enough, but for someone like me, they didn’t come easily.
I never wanted to see the good in myself and, therefore, didn’t want to see it in others either. I used to be critical and condescending. Now I strive to be encouraging and supportive.
I try not only to treat others as I would like to be treated, but I also try to consider how they would like to be treated. People appreciate positivity, and the more you share it with others, the more you are practicing it your own life.
When you start feeling like the idea of being a positive person is daunting, remind yourself that all it takes is one small step in the right direction to move yourself toward a more positive attitude.
Believe in yourself and remember the most important lesson of all: A positive outlook is a choice that you can always make.
This is not something easy, specially when you are going through a tough time in your life, but just giving it a try will bring a new light to your day. Hope it help, and happy Thanksgiving!
QDRO stands for Qualified Domestic Relations Order. A QRDO os a legal order, issued by a state authority, that follows a divorce. This specific ordinance refers to the ownership of retirement plans of any of the parties previously married. An important part of the financial division that is undergone during a divorce is the savings or plans the couple have been making for retirement.
A QRDP gives a person a fair share of the retirement plan of the spouse. This can be granted to either a spouse or ex-spouse, or to children or dependents from the marriage that is being terminated. Information is power!! Here are some frequently asked questions and their answers, taken from the Department of Labor webpage.
Qualified Domestic Relations Orders
What is a Qualified Domestic Relations Order?
A “qualified domestic relation order” (QDRO) is a domestic relations order that creates or recognizes the existence of an alternate payee’s right to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits payable with respect to a participant under a retirement plan, and that includes certain information and meets certain other requirements.
Reference: ERISA § 206(d)(3)(B)(i); IRC § 414(p)(1)(A)
What is a “domestic relations order?”
A domestic relations order is a judgment, decree, or order (including the approval of a property settlement) that is made pursuant to state domestic relations law (including community property law) and that relates to the provision of child support, alimony payments, or marital property rights for the benefit of a spouse, former spouse, child, or other dependent of a participant.
A state authority, generally a court, must actually issue a judgment, order, or decree or otherwise formally approve a property settlement agreement before it can be a domestic relations order under ERISA. The mere fact that a property settlement is agreed to and signed by the parties will not, in and of itself, cause the agreement to be a domestic relations order.
There is no requirement that both parties to a marital proceeding sign or otherwise endorse or approve an order. It is also not necessary that the retirement plan be brought into state court or made a party to a domestic relations proceeding for an order issued in that proceeding to be a domestic relations order or a qualified domestic relations order. Indeed, because state law is generally preempted to the extent that it relates to retirement plans, the Department takes the position that retirement plans cannot be joined as a party in a domestic relations proceeding pursuant to state law. Moreover, retirement plans are neither permitted nor required to follow the terms of domestic relations orders purporting to assign retirement benefits unless they are QDROs.
Reference: ERISA §§ 206(d)(3)(B)(ii), 514(a), 514(b)(7); IRC § 414(p)(1)(B)
Must a domestic relations order be issued by a state court?
A domestic relations order may be issued by any state agency or instrumentality with the authority to issue judgments, decrees, or orders, or to approve property settlement agreements, pursuant to state domestic relations law (including community property law).
Reference: ERISA § 206(d)(3)(B)(ii); IRC § 414(p)(1)(B); Advisory Opinion 2001-06A.
Who can be an “alternate payee?”
A domestic relations order can be a QDRO only if it creates or recognizes the existence of an alternate payee’s right to receive, or assigns to an alternate payee the right to receive, all or a part of a participant’s benefits. For purposes of the QDRO provisions, an alternate payee cannot be anyone other than a spouse, former spouse, child, or other dependent of a participant.
Reference: ERISA § 206(d)(3)(K), IRC § 414(p)(8)
What information must a domestic relations order contain to qualify as a QDRO under ERISA?
QDROs must contain the following information:
- The name and last known mailing address of the participant and each alternate payee
- The name of each plan to which the order applies
- The dollar amount or percentage (or the method of determining the amount or percentage) of the benefit to be paid to the alternate payee
- The number of payments or time period to which the order applies
Reference: ERISA § 206(d)(3)(C)(i)-(iv); IRC § 414(p)(2)(A)-(D)
Are there other requirements that a domestic relations order must meet to be a QDRO?
There are certain provisions that a QDRO must not contain:
- The order must not require a plan to provide an alternate payee or participant with any type or form of benefit, or any option, not otherwise provided under the plan
- The order must not require a plan to provide for increased benefits (determined on the basis of actuarial value)
- The order must not require a plan to pay benefits to an alternate payee that are required to be paid to another alternate payee under another order previously determined to be a QDRO
- The order must not require a plan to pay benefits to an alternate payee in the form of a qualified joint and survivor annuity for the lives of the alternate payee and his or her subsequent spouse
Reference: ERISA §§ 206(d)(3)(D)(i)-(iii), 206(d)(3)(E)(i)(III); IRC §§ 414(p)(3)(A)-(C), 414(p)(4)(A)(iii)
May a QDRO be part of the divorce decree or property settlement?
There is nothing in ERISA or the Code that requires that a QDRO (that is, the provisions that create or recognize an alternate payee’s interest in a participant’s retirement benefits) be issued as a separate judgment, decree, or order. Accordingly, a QDRO may be included as part of a divorce decree or court-approved property settlement, or issued as a separate order, without affecting its qualified status. The order must satisfy the requirements described above to be a QDRO.
Reference: ERISA § 206(d)(3)(B); IRC § 414(p)(1)
Must a domestic relations order be issued as part of a divorce proceeding to be a QDRO?
A domestic relations order that provides for child support or recognizes marital property rights may be a QDRO, without regard to the existence of a divorce proceeding. Such an order, however, must be issued pursuant to state domestic relations law and create or recognize the rights of an individual who is an alternate payee (spouse, former spouse, child, or other dependent of a participant).
An order issued in a probate proceeding begun after the death of the participant that purports to recognize an interest with respect to retirement benefits arising solely under state community property law, but that doesn’t relate to the dissolution of a marriage or recognition of support obligations, is not a QDRO because the proceeding does not relate to a legal separation, marital dissolution, or family support obligation.
Reference: ERISA § 206(d)(3)(B); IRC § 414(p)(1); Advisory Opinion 90-46A; see Egelhoff v. Egelhoff 121 S. Ct. 1322, 149 L. Ed. 2d 264 (2001); see Boggs v. Boggs, No. 97-79 (S. Ct. June 2, 1997)
Will a domestic relations order fail to be a QDRO solely because of the timing of issuance?
No, not if it otherwise meets the QDRO requirements under ERISA. A domestic relations order issued after the participant’s death, divorce, or annuity starting date, or subsequent to an existing QDRO, will not fail to be treated as a QDRO solely because of the timing of issuance. For example, a subsequent domestic relations order between the same parties which revises an earlier QDRO does not fail to be a QDRO solely because it was issued after the first QDRO. Likewise, a subsequent domestic relations order between different parties which directs a portion of the participant’s previously unallocated benefits to a second alternate payee, does not fail to be a QDRO soley because of the existence of a previous QDRO. Further, a domestic relations order requiring a portion of a participant’s annuity benefit payments be paid to an alternate payee does not fail to be a QDRO solely because the domestic relations order was issued after the annuity starting date.
Reference: 29 C.F.R. 2530.206; see section 1001 of the Pension Protection Act of 2006, Pub. L. 109-280, 120 Stat. 780 (Aug. 17, 2006).
May a QDRO provide for payment to the guardian of an alternate payee?
If an alternate payee is a minor or is legally incompetent, the order can require payment to someone with legal responsibility for the alternate payee (such as a guardian or a party acting in loco parentis in the case of a child, or a trustee as agent for the alternate payee).
Reference: Staff of the Joint Committee on Taxation, Explanation of Technical Corrections to the Tax Reform Act of 1984 and Other Recent Tax Legislation, 100th Cong., 1st Sess. (Comm. Print 1987) at 222
Can a QDRO cover more than one plan?
A QDRO can assign rights to retirement benefits under more than one retirement plan of the same or different employers as long as each plan and the assignment of benefit rights under each plan are clearly specified.
Reference: ERISA § 206(d)(3)(C)(iv); IRC § 414(p)(2)(D)
Must all QDROs have the same provisions?
Although every QDRO must contain certain provisions, such as the names and addresses of the participant and alternate payee(s) and the name of the plan(s), the specific content of the rest of the QDRO will depend on the type of retirement plan, the nature of the participant’s retirement benefits, the purposes behind issuing the order, and the intent of the drafting parties.
Who determines whether an order is a QDRO?
Under Federal law, the administrator of the retirement plan that provides the benefits affected by an order is the individual (or entity) initially responsible for determining whether a domestic relations order is a QDRO. Plan administrators have specific responsibilities and duties with respect to determining whether a domestic relations order is a QDRO. Plan administrators, as plan fiduciaries, are required to discharge their duties prudently and solely in the interest of plan participants and beneficiaries. Among other things, plans must establish reasonable procedures to determine the qualified status of domestic relations orders and to administer distributions pursuant to qualified orders. Administrators are required to follow the plan’s procedures for making QDRO determinations. Administrators also are required to furnish notice to participants and alternate payees of the receipt of a domestic relations order and to furnish a copy of the plan’s procedures for determining the qualified status of such orders.
It is the view of the Department of Labor that a state court (or other state agency or instrumentality with the authority to issue domestic relations orders) does not have jurisdiction to determine whether an issued domestic relations order constitutes a qualified domestic relations order. In the view of the Department, jurisdiction to challenge a plan administrator’s decision about the qualified status of an order lies exclusively in Federal court.
Reference: ERISA §§ 206(d)(3)(G)(i) and (ii), 404(a), 502(a)(3), 502(e), 514; IRC § 414(p)(6)(A)(ii)
Who is the administrator of the plan?
The administrator of an employee benefit plan is the individual or entity specifically designated in the plan documents as the administrator. If the plan documents do not designate an administrator, the administrator is the employer maintaining the plan, or, in the case of a plan maintained by more than one employer, the association, committee, joint board of trustees, or similar group representing the parties maintaining the plan. The name, address, and phone number of the plan administrator is required to be included in the plan’s summary plan description. The summary plan description is a document that the administrator is required to furnish to each participant and to each beneficiary receiving benefits. It summarizes the rights and benefits of participants and beneficiaries and the obligations of the plan.
Reference: ERISA §§ 3(16), 102(b), 29 CFR § 2520.102-3(f); IRC § 414(g), Treas. Reg. § 1.414(g)-1
Will the Department of Labor issue advisory opinions on whether a domestic relations order is a QDRO?
A determination of whether an order is a QDRO necessarily requires an interpretation of the specific provisions of the plan or plans to which the order applies and the application of those provisions to specific facts, including a determination of the participant’s actual retirement benefits under the plan(s). The Department will not issue opinions on such inherently factual matters.
Reference: ERISA Procedure 76-1, 41 Fed. Reg. 36281 (1976)
With about 50% of all marriages ending in divorce, divorce insurance doesn’t sound like such a bad idea, or does it? Like any insurance, the concept is to invest in protecting yourself for the future if things come to it.
Illustration by Harry Campbell for TIME
Ever had that sinking feeling that the person your friend is marrying is perfectly awful? Of course not, because you love everyone. But should it happen, you now can give the perfect wedding present: divorce insurance.
WedLock, as it’s coyly named, is a new type of casualty insurance that gives the unhappily married policyholder a payout after he or she is unhitched. It costs about $16 a month for every $1,250 of coverage. But to discourage people from signing up just prior to their divorce, policyholders must ante up for four years before the policy will pay out. It adds a premium of $250 per unit for every year the marriage survives beyond four. So if a policyholder who bought 10 units got divorced after 10 years, he or she would have handed over $19,188 and would receive a payout of $27,500. It’s probably not worth getting divorced for, but the lump sum might salve some wounds, whether through lawyers, vacations or subscriptions to the Rhapsody Book Club.
The idea bubbled up, as so many do, from the bottom of a financial pit. After John Logan watched his wealth follow his marriage down the drain, the Kernersville, N.C., entrepreneur figured there must be a market for those who want to hedge their marital bets. He won’t reveal how many policies he’s sold since the Aug. 5 launch of WedLockDivorceInsurance.com. But he’s surprised at how much insurance his customers are buying: some of the premiums are more than $1,000 a month.
Not everybody thinks divorce insurance is prudent. “The best insurance against a painful, financially devastating divorce is to find a way to be happy in your marriage,” says relationship coach Mimi Daniel. “Divorce insurance implies from the beginning that divorce is already an option.”
On the other hand, unless you’re Elin Nordegren, few things are as impoverishing as ending a marriage. Logan, who is recently engaged and, yes, is buying policies for himself and his betrothed, expects WedLock will become part of prenuptial agreements or be purchased for a bride or groom by relatives concerned about their loved one’s choice of loved one. “Mom or Dad could buy this for their son or daughter without them knowing about it,” he suggests. But the bride or groom has to be the beneficiary. Sorry, scheming mother-in-law, no windfall for you.
This article originally appeared in the Sept. 13, 2010, issue of TIME magazine.
Read more: http://www.time.com/time/magazine/article/0,9171,2015772,00.html#ixzz29ZGEb93K
What are your thoughts?
When there are kids in a divorcing family, the divorce is not between two anymore. The children should become the most important people in the discussion, as they are being affected, while being powerless to defend their own rights. I want to share an interesting article with some insight as to how to best help children cope and go through this traumatizing process.
How to help your child cope with divorce
A divorce is stressful on the entire family, but it’s especially tough on your children who have to work through a ton of feelings and adjust to a very different life than they’re used to. Yet experts agree that with some proven strategies, you can help them heal and pull through. Here are seven.
Be honest.
“Parents set the tone in the way that they explain a family transition to their children, according to Risa Garon, a licensed clinical social worker and the executive director and co-founder of the National Family Resiliency Center. Garon said children feel that they’re cared for and included when you can explain in a child-appropriate way that you’re getting a divorce and how it’s going to affect them. Plus, it’s also a good idea to explain in simple terms the reason you’re getting a divorce because kids, regardless of their ages, often think the divorce is their fault.
Consider their feelings.
“One of the largest problems is the loss of a picture of a family that children knew and felt secure about,” Garon said. Understand that your child may have a set of feelings that are completely different from yours. They might feel shock, denial, anger, and sadness and experience worry and anxiety. They might also feel isolated, alone, and afraid. Young children can benefit from reading books about divorce and drawing pictures about their feelings, and tweens and teens can benefit from music with lyrics that talk about change.
Keep life normal.
A divorce brings about so much change: new home, new school, and a new way of life, but you can make it less traumatic for your child by making sure the other parts of his life are as normal as possible, according to Karen Buscemi, author of I Do, Part 2: How to Survive Divorce, Co-Parent Your Kids, and Blend Your Families Without Losing Your Mind. It’s best for your child to continue to participate in the same activities, see the same friends, and even stay in the same school if possible. Also, children need structure and discipline, so both parents should agree to keep the same bed time, chores, and rules.
Stay connected.
Custody arrangements and visitation can be tough on the child so it’s important for the parent who has the child most of the time to encourage he or she stay connected with the other parent when they’re not together. Set regular times for phone calls or video chats, email, or texts.
Don’t bad-mouth your ex.
Divorce can bring out a lot of negative emotions and hurtful words, but no matter what you would like to say about your ex, don’t do it within ear shot of your kid because “the children feel like a piece of them is being belittled and berated and taken away from them,” according to Garon. Plus, your children will always remember what you said about the parent they love. Instead, vent to your family, friends, or a therapist.
Work together.
The more decisions you can make before going to an attorney—custody, visitation, financial matters—the easier it will be for you and your child, according to Buscemi. Once the divorce is finalized, a great way to make co-parenting run smoothly is to work together to raise your child and pitch in when your ex can’t do a drop off or go to the school play, for example. A Google calendar can help everyone be on the same page and know exactly who is responsible for what and when. “If you are flexible, that’s going to give your ex reason to be flexible in return,” Buscemi said.
Get support.
Garon says just like a wedding is an event and a marriage is a process, divorce is a major family transition that takes time to heal. And one of the best ways to help your kids cope is to surround yourself with caring family, friends, and colleagues who have your family’s best interests in mind. Individual counseling, educational programs, and school groups can also help your child feel not so alone in the process.
Read more: http://www.foxnews.com/health/2012/08/22/how-to-help-your-child-cope-with-divorce/#ixzz28oV9PCtk
As ironic as the title may sound to some, this is not an oxymoron. We have helped many people understand and deal with their financial issues through their divorce, and be able to come out ahead. This is the purpose and promise of the I Came Out Ahead Club. We help you be smart about your finances, so that you can focus on the many other aspects involved in a divorce.
It is not easy to manage your finances in a clear way through a divorce, here are some of the mistakes some people make.
Assuming debts are paid After the divorce is final, make no assumptions when it comes to your debt obligations, including mortgages and credit card debt. Did you sign the house over to your ex-spouse? If so, make sure your name is removed from the mortgage as well as the title.
I have an acquaintance that didn’t even own her marital home anymore and was liable for payments when her ex-husband fell in arrears. Be sure to resolve jointly held debt and close all co-signed accounts.
Racking up legal fees One thing my ex-husband and I agreed on was that we didn’t want all of our savings to end up in the hands of our divorce attorneys, and we made an effort to be efficient in our decision-making even though it was difficult at times. Acrimonious or not, lack of preparation, lingering arguments and back-and-forth negotiating can generate steep legal bills. No matter how bitter your divorce, try to come to a similar agreement with your spouse.
Succumbing to budget denial If you’re accustomed to living on two incomes or relied on your spouse’s salary during your marriage, life as a single person can be a big adjustment. Changes to your lifestyle are often difficult to face, but hard to avoid.It’s essential that you develop and commit to a budget, especially if you’re new to managing household finances or are drawn to retail therapy. I’ve seen friends rack up credit card debt by overspending and ignoring savings goals in the wake of a divorce. I even have a very expensive leather coat hanging in my closet which serves as a reminder of an episode of my own excessive post-divorce spending.
Overspending on kids Closely related to budget delusion is overspending on your kids. Even if you and your spouse have been careful with purchases for your children, it’s easy to get off track during a divorce when you — and your children — may be dealing with some guilt and uncertainty. In some circumstances, divorce can even bring out competitive behavior between parents who may be vying for their children’s affections in the midst of custody battles.
Before you pull your wallet out to buy your child a new video game or bicycle, remember that indulging your child — or yourself — in the purchase will not undo the divorce and may actually be detrimental to your overall financial situation
Regardless of how you may react emotionally, remember that keeping a level head about finances during the split can lead to more financial security for you and your family in the future.
Source: http://www.cnbc.com/id/48199320/The_5_Most_Common_Financial_Mistakes_of_Divorce
We have found that people who work with a financial advisor through divorce save money on attorneys fees because the process flows easier when the financial picture is clear. Our work as financial divorce strategists is to help you and your attorney through the many financial aspects involved in a divorce, things that most of the times you, and even your attorney, are not fully aware of. We provide you with a clearer picture of your past, present and future finances, and how to handle them through your entire process.
The following article from Forbes was published a while ago, but I found it very helpful because it compiles some timeless financial divorce mistakes. In my practice, I see these happen over and over again. And the reason why they happen so frequently is a divorce is a time of big financial decisions, while going through a tough emotional situation that clouds our ability to think clearly. We are aware of the challenges faced financially through a divorce, and that is why we created the I Came Out Ahead Club, to help people implement a smart financial strategy through their divorce. Read the following top 9 financial divorce mistakes, and share them with people you know who is going through divorce.
Top Financial Divorce Mistakes
Getting a divorce is a messy business, both personally and financially. Don’t be in such a hurry to reach a settlement that you make these costly financial mistakes:
-Having unrealistic expectations. “Divorce will put a cramp on your lifestyle,” asserts Violet Woodhouse, author of Divorce & Money: How to Make the Best Financial Decisions During Divorce. One household is about to be split into two. Unless you’re a rock star–or a Rockefeller–expect money to be a little tight.
-Not communicating. If you don’t share information with your spouse or your lawyer, you’ll just end up paying for the legal work it’ll take to get it.
-Getting into an endless battle. Turning the courtroom into a battleground will drain your emotions and your finances. Pick your battles wisely and “don’t end up paying for your lawyer’s kids’ education,” advises John Crouch, a family law attorney who practices in Arlington, Virginia.
-Getting hung up on the numbers. A fair split is not necessarily an even split. Woodhouse counsels her clients to assess their tolerance for risk before deciding how to divide their financial assets. One spouse may not mind taking over a risky stock portfolio; the other may prefer the relative security of a bond fund.
-Focusing on the present and not on the future. Make sure you understand the financial implications of your decisions. Rather than accepting a BMW worth $35,000, for example, consider taking a mutual fund with the same current market value. The car will depreciate; the fund, if chosen wisely, probably won’t.
-Forgetting to assess tax. Don’t forget to factor in the tax costs of every financial decision you make. For instance, two stock portfolios of seemingly equal dollar value might really be worth completely different amounts, depending on capital gains.
-Overlooking important information. In the struggle to keep your divorce simple, make sure you have information on absolutely everything that will affect your financial future: all assets, investment funds, retirement pensions, and so on.
-Failing to untangle all joint finances. Keep your finances mingled and your financial future could be jeopardized if your former spouse defaults on payments, commits fraud, goes bankrupt, or becomes disabled. You might also be liable for any debt that your spouse has incurred under your name. Make sure you have worked out a way cut or minimize all financial ties that bind you before the divorce rather than after it.
-Failing to take into account the amount of time you’ll to get your career back on track. If you gave up your career when you got married, it probably won’t be easy to jump back into the workforce. Don’t be surprised when the costs–both financially and emotionally–of resuming your old business turn out to be greater than you’d thought.
A divorce is considered as one of the toughest situations we can experience. The emotional aspect, the psychological aspect, and the social aspect of it can be devastating. But there is another important aspect to a divorce that can become very difficult to handle, and this is the financial separation.
There are very high costs associated with a divorce, and if it is a prolonged one, these costs can skyrocket. Plus, you now need to divide all of your belongings, a big burden to handle when you are not at your best in emotional and psychological terms.
Iowa State University published an interesting article analyzing the various aspects you should take into consideration when facing a financial separation. At Financial Divorce Strategies, we specialize in helping you handle a financial separation. We can help you have a clear picture of where you are standing, and where you want to get from here, in order to make better decisions trough this process.
Source, http://www.extension.iastate.edu/Publications/PM1719.pdf
When planning for your financial future, it is important to understand the different options you have to choose from. In the past, people would work for 30 – 35 years at one job and then retire with a nice pension and Social Security. Things have changed dramatically since those days. Instead of a pension, companies offer 401K, 403B, etc. types of Savings accounts that are used as a retirement vehicle and replace the pensions in general. Employees may contribute to these accounts and most of the time the company will match a part of it.
Other types of accounts are the Traditional IRA in which an individual may contribute to every year in order to save for retirement years and receive tax advantages. You may contribute to this account while you are working and until you turn 70 ½ and then discontinue the contributions and start to take a distribution. It becomes taxable income only on the amount that is withdrawn.
Another type of account is the Roth IRA. Unlike the Traditional IRA, contributions made to this account are done with already-taxed dollars and are not tax deductible. However, when a distribution is made it is tax free. You may continue to contribute to this account for the rest of your life and there is no mandatory withdrawal age. If your estate or settlement is large, it is advised that you contact a Trust Attorney and discuss the best way to preserve your investments for yourself and your heirs.
In a lot of cases it doesn’t matter who files the initial papers. However, if either you or your spouse have recently relocated to a new state or even county it is wise to discuss this with your attorney. It may be to your advantage to be the first to file because part of your strategy could be that you want to present your side of the divorce to the judge first.
When did you relocate and how long do I have to wait?
Waiting periods and residency requirements are different in every state. Your attorney can advise you on this. It may be as short as six weeks or it may be as long as one year. The definition of residency is the length of time you have lived in the state before you are entitled to file for your divorce there.
The waiting period deals with the length of time you must wait between filing the initial paperwork, sending it to your spouse and finally getting the judgment of divorce. This also will vary according to the state and will range from 30 days to more than a year. The courts and Judges are busy with hearing divorce cases and although you may have everything in order and are just waiting for a final judgment of divorce in your case, remember you cannot get this until the waiting period has passed.
Going through a divorce is maybe one of the hardest experiences one has to go through. And I’m not referring to the relationship side of it, but more to the legal aspect of this process. A divorce will determine the future of not only both parties involved, but also of their children in case there are kids from that marriage.
As with most, if not all, things in life, it is important to make this an informed process, and to surround yourself with experts in the subject. In an article I run across, Jeff Landers writes:
For ten years on the sitcom Friends, Courteney Cox starred in the role of Monica Geller, a beautiful and successful 20-something who prided herself on being fastidious, competitive and bossy.
Sadly, though, life does not always imitate art, and these days Ms. Cox appears to be proceeding with her divorce in ways that are distinctly un-Monica-like. Not only does she seem to be neglecting details, but she could be jeopardizing her sizeable, hard-earned fortune as a result. For example, last week I read about these two particularly surprising aspects of the Courteney Cox-David Arquette divorce case:
1. Ms. Cox recently filed legal docs responding to Mr. Arquette’s divorce petition, and –apparently following his lead –she did so without a lawyer.
2. The court docs apparently do not mention a prenup.
Can you imagine how Monica would react if a friend of hers was following the same path? I can’t help but think the conversation would begin with one of Monica’s characteristically blunt assessments. “Are you crazy?” she would blurt out.
Of course, if I had the opportunity to advise Ms. Cox, I would phrase things somewhat differently. “Ms. Cox, I think you should re-consider your strategy,” I would say . . . and then I’d ask, “Are you crazy?”!!
First, let’s review the importance of using a lawyer.
As I have discussed before, there are four broad categories of divorce alternatives: Do-It-Yourself (DIY), Mediation, Collaborative and Litigation. Of these, Litigation is the most common, but keep in mind, “litigated” does not necessarily mean the divorce ends up in court. “Litigation” is a legal term meaning ‘carrying out a lawsuit,’ and even though they’re litigated, the vast majority of all divorce cases (more than 95 percent) reach an out-of-court settlement agreement.
Why are lawsuits a part of divorce? Because no matter how “friendly” you’d like your divorce to be, it is extremely difficult and emotionally-trying to reach agreements on child custody, alimony payments and the division of assets and liabilities. Legal matters, livelihoods and personal futures hang in the balance, and it makes perfect sense to hire trusted divorce professionals to help you effectively navigate the sea of forms, legal filings and complicated rules of evidence.
Even if the divorce is fairly amicable, the laws are complex, and there are numerous financial and tax implications associated with dividing retirement plans, real estate, intellectual property, stock options, etc. Without the right professional advice it can be very easy to make irreversible mistakes. What’s more, children and dealing with custody and other parenting issues can further complicate the situation, as well.
Remember: Enlisting the expertise of a lawyer does not mean your divorce must be contentious. In fact, just the opposite is true. Most divorce attorneys (or at least the ones I would recommend) will always strive to come to a reasonable settlement with the other party and ensure that your divorce settlement agreement accurately incorporates the agreed upon points.
Now, let’s discuss the benefits of a prenup.
A prenup (short for “prenuptial agreement”) is a contract signed by both parties before their wedding. By using a prenup, both the husband-to-be and the wife-to-be decide in advance: 1) what property will be considered separate property, 2) what property will be considered marital property, 3) how any marital property should be divided, 4) particulars about estate planning and inheritances and even 5) how much alimony will be paid and for how long if there’s a break-up down the road. In short, the prenup details what the couple’s property rights and expectations would be upon divorce and if done correctly, it can be an excellent way to supersede your state’s marital laws. However, in order for a prenup to be effective, each party must be represented by its own separate attorney, and the agreement:
- must be in writing.
- must provide full disclosure (no hiding of assets and/or liabilities).
- must be executed voluntarily and without coercion.
- must be executed by both parties, preferably in front of witnesses.
- cannot be unconscionable, meaning that it cannot be completely lopsided giving one party so much more than the other.
- should be in a recordable format.
And, just to reiterate, the prenup must be executed before the wedding!
Since it appears Ms. Cox did not have a prenup in place, the money she earned during her twelve-and-a-half year marriage will now be considered marital property –and because California is a Community Property state it will be split 50-50. (And in case you’re wondering, she’s reportedly worth $75 million, while Mr. Arquette is worth $18 million.)
Maybe years ago, Ms. Cox considered the idea of a prenup awkward and unromantic. If that was the case, she could have pursued other options that would not have required her fiancé’s approval. For instance, she could have established a Domestic or Foreign Asset Protection Trust.
What about a postnuptial agreement?
Even if there were no pre-marital protections in place, Ms.Cox could have pursued a postnup. Similar to a prenup, a postnup is a contract between husband and wife, but it is entered into and signed after the wedding.
Could Ms. Cox have protected her assets with a postnup? It’s impossible for me to say. But, I do know this: When celebrities divorce, one of the biggest points of contention is typically intellectual property rights. These rights cover property such as patents, trademarks, copyrights and royalties and other contractual rights, and depending on the individual circumstances, they can be worth thousands, if not millions, of dollars.
What’s more, any intellectual property rights obtained during a marriage may be considered marital property –and that means they may be divided during divorce. Although the specific rules vary from state to state, the general rule of thumb governing intellectual and other property is this: Value that’s created during the marriage must be divided.
Again, it’s impossible to know with certainty how a postnup would have impacted the division of assets, in general, or how it could have impacted the division of intellectual property rights to, say, the sitcom Friends, in particular. But even so, if you’re a married woman involved in a similar business endeavor, my advice is simple: I believe having a postnup in place is usually better than having nothing at all.
All women –whether they’re single, engaged, happily married, contemplating divorce, or in the middle of divorce proceedings –can learn something by observing how celebrities handle their break-ups. In this particular case, I feel that Courteney Cox is being reckless and short-sighted. . . and I honestly think Monica Geller would feel the same way.
Be smart when going through those decisive moments in your life. Become an expert in hiring experts, and benefit from their expertise and knowledge. Attorneys, counselors and financial strategists are people who have dedicated themselves to gathering tools and information to help you make smart decisions, and protect yourself when going through life altering situations.
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