Building Your Divorce Team

Building Your Divorce Team

Building Your Divorce Team

When you get married, you surround yourself with a team, which usually includes, at a minimum, a dress-maker (or seamstress), a caterer, a florist, perhaps a religious official and maybe a wedding planner. That’s just a few of the professionals who might be involved. It can take months to plan, be incredibly stressful, and the whole thing results in a piece of paper that says your official state of relationship has changed from single to married. However, for over 50% of Americans, that happy day is the beginning of a journey that ends with another piece of paper that, once again, changes your official state of relationship—back to being single. The average divorce today takes about a year, and sometimes longer, to resolve. It can also cost as much as (or more than) what you spent on your nuptials and has the potential to be emotionally overwhelming and financially crippling.

So what do you do?  Just as you did when you got married, you should surround yourself with a team of professionals when you get “unmarried.”  You probably didn’t make your own dress, so you should probably not write your own separation agreement. You would hire an attorney for that. Your legal professional is also going to help guide you through the legal system’s maze of Family Court, regardless of whether you use mediation, collaborative law or litigation. Instead of a caterer, you’ll have a financial professional who is going to help you understand the short-term and long-term financial implications of the decisions you will need to make. This piece can be particularly important, especially if one of the parties isn’t as involved in the family finances as the other, or if there is a business or pension involved. In place of the florist, you might have a therapist or counselor to help you, and/or your children, handle the emotional impact of uncoupling. Divorce can be emotionally complex for everyone involved and those emotions can, if allowed, result in poor decisions. And there could be others on your team depending on your circumstances, including a realtor, an accountant or tax-preparer, a child-specialist and/or a valuation specialist to name a few.

Additionally, just like most weddings are not cheap these days, a well-planned divorce comes at a cost. However, building a thorough divorce team and using those resources wisely can actually save you money in the long-run by making sure that you are making wise financial decisions to help protect you now and into your new future.

When we marry, we are building a future with “that special dance partner.” When we divorce, we are building a new future, just using different dance partners. Remember, when you go through a divorce, choose partners that have experience to try and avoid any missteps along the way.


Ready to Retire?

It’s time, you’ve been in the workforce for decades and you are thinking of pulling the trigger and retiring from your job. You worked hard at putting your financial house in order, reviewed your potential retirement expenses and income sources and now it’s time to think about collecting Social Security.

Did you know that there are over 1,300 different strategies for collecting your benefit? Some of these strategies will net you over $75,000 (during a lifetime) more than others. Additionally, there are over a dozen different items that you need to make a decision about and an eight year time frame during which you can make those decisions. And that’s just if you are single. There are nearly twice as many decision points if you are married and you can add more months to the equation. And you thought Common Core math was tough?

It is estimated that 90% of American retirees don’t maximize their Social Security benefits. Before you potentially leave a significant amount of money on the table, consider speaking with an advisor who can prepare you for the decisions that you face. Seek an financial advisor who is familiar with the process that can help guide you when it comes to making some very important decisions like:

  • Choosing between a spousal benefit or your own.
  • Whether to file or suspend.
  • Collecting against your ex-spouse versus collecting your own benefit.
  • Collecting early or letting your benefit build for a few years.

Let’s focus for a minute on collecting early versus letting your benefit build. It is Economics 101 that inflation on a higher amount will net you more later in life. However, every situation is different and finding a professional that can advise you on your unique financial circumstances may be the difference between being comfortable in your golden years or having to ask the kids for help.

If you are married, one of the other things you need to consider is making sure that your survivor receives the best possible benefit when you are gone. By maximizing your benefits and exploring your options you can help ensure a successful retirement.


Spring Cleaning of Your Financial House

Spring cleaning is the first thing that comes to my mind when I see the days getting longer and the flowers starting to sprout. Spring cleaning also applies to your financial house. Why not take an hour and review how you are doing compared to the budget you put in place last January? What? You didn’t write a formal plan for yourself for the New Year! It’s never too late to sit down and review where you stand financially. It’s not that difficult either, but it doesn’t hurt to have a coach on the sidelines helping you evaluate your next move.

For example, a good “best practice” is to (1) write down your goals and aspirations, (2) devise a plan to help you reach those goals, (3) periodically review where you stand relative to your plan and (4) engage the services of a professional to coach and counsel you on the right moves to make. As a career financial advisor, I work with very smart people every day who know what they need to do, but lack the resources to actualize their plan. That’s where I come in. As a fee-only financial advisor, my job is to provide as much or as little coaching as each client might desire. And, frankly, that’s all many clients need to feel confident and on-track with their plan. Questions? I am only a phone call away…


Retirement is just a stop along the way…

Good retirement planning is a balance of saving for tomorrow while maximizing your enjoyment of today. Are you holding out for when you’ll be retired “and you will get to do all those things you’ve been looking forward to doing?” Many financial advisors are wising up to the new reality of retirement. Retirement is in actuality an imaginary point on life’s path. People need to live their lives balancing enjoyment now and anticipation for later.

Now, this isn’t a license to ignore common-sense rules and throw caution to the wind with no thought to tomorrow (and, yes, some people actually live like this…). It is important to take time today to enjoy life while on the path. Surprisingly, many of the things people put off (taking care of relationships, postponing their overall well-being, reconnecting with old friends) cost little, provide perspective on what future retirement might look like, and can improve your health, which studies show helps improve your retirement finances.

The quickest route to a disappointing retirement is failing to contemplate, understand and experience what you’ll do when you get there. How will you know if you don’t do a little exploring now? Take a moment and speak with your financial advisor about the things you can do now to bring some perspective to your path to retirement.


Divorce American Style

The economy is on the rebound and many people are seeing the positive effects of the American economic recovery in their investment accounts. Good news…bad news! According to a study on Bloomberg.com, divorce filings fell to record lows during the Great Recession and are now on the rise. As we all know, divorces cost money. During the Recession, money was tight, assets balances were down, and many couples who would have otherwise gotten a divorce decided to consciously or unconsciously postpone their separation. With the economy on the rebound, fewer couples are deciding to stay together now that they feel they can afford to pay the bill, split their assets and support their separate lives.

If you are deciding to get divorced, take some time to do it right so that both parties come through to the other side in the best possible manner. Remember to consider all of your divorce options (i.e., mediation, collaborative law, litigation or plain old-fashioned do-it-yourself). Pull together all the information you need as efficiently as possible. Don’t just get any attorney; get a great attorney and don’t use your attorney as a therapist. Some of the professionals you should consider are: a mediator, an attorney (or two), a therapist (particularly if there are children) and a financial analyst. Building a team may seem like you are spending a lot of money upfront, but should actually save you money in the long run—well after the divorce papers are signed, filed and dusty.

Wondering where to begin on this painful topic? Check out the Foundation for Women’s Financial Education which is holding a series of workshops entitled “Second Saturdays.” These workshops are designed for women at any stage of untying the knot to help them better prepare for the complexities of divorce while avoiding common financial, legal and emotional pitfalls. Additional information can be found at WomensFinancialEducation.org