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Jan 30, 2017

“Attorneys often tend to feel they have the knowledge and experience to take care of many complex financial matters on their own, even though most do not hold any sort of business degree. This can create costly mistakes for their clients if they do not fully understand the complicated financial concerns at hand.”

- Joseph E. Cordell, Partner of Cordell & Cordell, the largest family law firm in the United States

Your divorce lawyer is essential for advising you on the legal aspects of your divorce. However, most divorce layers are not financial experts, and your attorney can make costly mistakes that could end up hurting you for many years after your divorce is over.

I am going to show you the five most common financial mistakes your attorney could make when crafting a divorce settlement—and what you can do to protect yourself.

1) Failing to navigate steep tax consequences

When you think about finances in divorce, it is not important what you get, but what you get to keep. There are tax consequences to almost every major financial decision. However, while divorce attorneys are great at helping you negotiate a settlement, they often fail to account for the tax implications.

Retirement accounts (such as IRAs, 401ks, and pension plans) have different rules when it comes to withdrawing money from the account when you need it. You may think an account is worth $100, but after you pay all the taxes and penalties, you only have $50 left.

If your attorney does not help you navigate the tax consequences of every potential asset and account, you can find yourself agreeing to a settlement that is not fair, and does not make financial sense later.

What if you plan to sell your marital home after divorcing? Many divorce attorneys fail to advise a way to save $250,000 in capital gains taxes: selling your home while you are still legally married. That information could mean a lot more money in your pocket after the divorce is over.

How should you file your income taxes? There are tax traps regarding spousal and child support, which marital status you choose, and how you handle a tax refund when you are getting divorced. A wrong decision while getting divorced can cost you for the rest of your life.

2) Mishandling investment accounts

Investment accounts are one of the most complicated financial assets in the world. There are hundreds of thousands (if not millions) of different investment options. After a decade of exclusively working in the financial services industry, there are some areas that I still find complex.

How can you expect someone who went to law school to make the proper investment and financial decisions for you? Numerous times, I have seen even the highest-profile family law attorneys make easily preventable mistakes when dividing investments during divorce.

Let us look at a few basic examples:

Mutual Funds: Mutual funds are common, but they come with risks you may not consider as you negotiate with your soon-to-be ex-spouse. Is the money in a taxable or tax-deferred account? Is there is a high portfolio turnover in the fund? In other words, is there frequent buying and selling of investments associated with it? If so, there could be a large, unexpected tax liability that you will not discover until the end of the year. Furthermore, there are hundreds of different strategies and structures of mutual funds, so you should be very selective about which ones you fight to keep.

Stocks: If you are thinking about keeping an individual stock, do you know its cost basis (which has a huge impact on calculating future taxes if you sell it)? If the stock is a big portion of your overall assets, do you know how to “hedge" it or diversify the risk? There are some incredibly complex considerations regarding stocks, and many books are dedicated to this subject alone. Taking the word of your family law attorney (or worse yet, your spouse) without getting specialized help could be an expensive mistake.

Alternative Investments: Are trying to split a hedge fund or private equity fund? Do you even know what these assets are? Be very careful. Many of these funds involve periods of up to 10 years in which you cannot sell them. Therefore, if you need the money, you could find yourself in a tough financial position.

3) Forgetting to look for hidden assets

You may have suspicions that your spouse is hiding money from you. Sometimes it is obvious, but other times, it can be difficult to tell. When your marriage is on the rocks, it is a very common occurrence for money to start disappearing.  If you and your spouse own a business, then hiding money becomes much easier.

Given the financial complexities of identifying red flags, many divorce attorneys often inadequately search for hidden assets, which is secret money that you may be entitled to receive. Your spouse may do things like transfer money to friends, report lower income or higher business, create fake or inflated debts, withdraw money in cash and hide it, overpay the IRS and keep the refund, or mislead you about the value of assets.

Finding hidden assets is complicated and potentially expensive, as it may require you to employ a forensic accountant or private investigator. That said, failure to examine this kind of misdeed could cost you a lot of money.

4) Neglecting to secure support payments with insurance

What happens if your spouse unexpectedly stops making child or spousal support payments because they die or become disabled? Support payments may be an essential income source for you, and a sudden loss of payments could cause a host of financial complications.

Many attorneys fail to advise this cost-effective way to protect you: getting insurance to make support payments should the unforeseen happen. The specific implementations can take many forms, but if you are the beneficiary of the policy, you will be protected.

However, you should make sure you own the policies, and that any premium payments are kept current. Otherwise, you will find yourself at a loss when you need the funds.

5) Overlooking a post-divorce financial plan

One day, your divorce will be over—even if it does not feel like it now. Before you sign the settlement papers, are you sure the agreement will make sense for you in the long-term? Many settlements may make sense for the first year or two, but you can find yourself realizing you made a major mistake later down the line.

Divorce attorneys generally do not prepare long-term financial plans for you. All too often, I see people like you put in this position: Just a few years after the divorce, they are scrambling for money or considering bankruptcy.

You may regret having chosen to keep that house, or choosing a bigger retirement account (versus cash in a bank account today). You do not want to end up in a position where you are asset-rich but cash-poor. Most of the time, divorcesettlements are tough to change, so you must be sure you can afford the settlement when you sign on the dotted line.

Keep your attorney from f***ing up your settlement — and your life

Get specialized help. You are paying your lawyer for advice about the law. Be sure to have someone help you handle the complex financial issues during divorce, such as a Certified Divorce Financial Analyst (CDFA). CDFAs are trained by theInstitute for Divorce Financial Analysts.

Their mission is to "assist the client and his or her attorney to understand how the decisions he or she makes today will impact the client’s financial future.” Some CDFAs operate in general regions, and others like me help people across the country.

Fortunately, there are some great FREE resources out there. For instance, I host the Divorce and Your Money Show, which is the #1 podcast in the United States that discusses the financial issues in divorce.

You can also check out these courses:

By doing your homework and not being afraid to get help, you can successfully navigate your divorce. Then you will end up with the settlement you deserve.

Do not get f***ed.

Find this information helpful? Please share it with someone else who needs it.

Shawn Leamon, MBA and Certified Divorce Financial Analyst, is the host of theDivorce and Your Money Show, the #1 show on iTunes that discusses personal finance issues in divorce. He is also author of Divorce and Your Money: The No-Nonsense Guide, available on Amazon. Learn more

Disclaimer: Divorce and Your Money and its affiliates do not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.

Jan 26, 2017

Going through a divorce is one of the toughest things that can happen in your life. There are legal issues, financial complications, and of course, intense emotional strains. The process can be made all the more confusing because of poor,  conflicting feedback; you might find this shoddy advice online or hear it from family and friends. Therefore, where do you turn for trustworthy information?

The good news is that you are not alone. There are some reliable blogs and online resources to help you survive the divorce process. As someone who has helped thousands of people get through divorce, I only recommend a handful of blogs. Some of my favorite resources are listed below.

Overall Best Divorce Blog: Huffington Post Divorce

Huffington Post Divorce has the most comprehensive information for people going through a divorce. The blog includes a wide range of interesting topics, including legal issues, co-parenting, and even celebrity issues. There are a wide range of contributors, from individuals (sharing their own experiences and lessons) to experts (e.g., attorneys, therapists, financial analysts, and sex therapists).

The only downside to Huffington Post Divorce is that the amount of information on the site can simply be overwhelming. They have numerous posts every day, and it can be hard to find information about a specific subject. But overall, it has the most complete information related to divorce anywhere online.

Runner-Up for Best Divorce Blog: AvvoStories Divorce

Avvo is a site that provides ratings and reviews for attorneys across the country in various areas of the law. They have a great blog on divorce called AvvoStories, which covers a wide variety of divorce subjects, usually written by former attorneys, authors, and freelance contributors.

Although AvvoStories is not as comprehensive as Huffington Post Divorce, it does focus on some unique, lesser-known subjects, which you will not find articles about anywhere else. For example, AvvoStories discusses divorce concierges and divorce masters. Overall, AvvoStories serves as one-stop shopping for reading, researching, getting answers to questions, and connecting with an attorney.

Best Blog for Divorcing Women: Divorced Girl Smiling by Jackie Pilossoph

In the Divorced Girl Smiling, Jackie Pilossoph shares her experiences and offers advice since her divorce. Her recently redesigned blog covers a wide variety of topics, including separating, co-parenting, and dating after divorce. Pilossoph is also the author of the highly entertaining novel Smiling and the creator ofDivorced Guy Grinning, another great blog.

I recommend Divorced Girl Smiling for women looking for practical advice that feels like it is coming from a close friend or peer. The site has a lot of great information, and the writing is both informative and entertaining.

Best Blog for Divorcing Men: Dad’s Divorce by Cordell & Cordell

Cordell & Cordell claims to be “the largest family law firm in the nation focused on men's divorce, child custody, fathers rights, men’s rights, child support and other family law matters.” Their blog provides essential information on the divorce process, child custody issues, child support, property division, and spouse support. They even offer an attorney directory, a variety of divorce guides, and advice about divorce laws in specific states.

This blog is great for men going through contentious divorces. Oftentimes, men feel like divorce laws (especially custody-related ones) are biased in favor of women. As a response, Dad’s Divorce provides very helpful information about protecting men’s interests.

Overall Best Blogs by Divorce Coaches: Moving Past Divorce by Terry Gaspard and Tracy Clifford

This blog is written by Terry Gaspard, MSW, LICSW, and Tracy Clifford, a mother/daughter team who grew up in divorced families. Their mission is to help women make healthy choices in their relationships, and they are authors of the excellent book Daughters of Divorce: Overcome the Legacy of Your Parents' Breakup and Enjoy a Happy, Long-Lasting Relationship.

The blog is geared toward people seeking tools to help cope with the emotional challenges involved during and after divorce. There are also great guest posts from other experts, including Rosalind Sedacca, Lisa Gabardi, and LJ Burke. In addition, the website includes a comprehensive list of recommended books.

I recently interviewed Terry Gaspard on the Divorce and Your Money Show. She was an excellent interviewee; you can listen to the interview here.

Since My Divorce by Mandy Walker

Mandy Walker is a divorce coach who went through a divorce of her own. Her blog provides advice about many facets of divorce, including emotional and legal challenges.

She also has a great Story Catalog, which includes a large collection of stories about men, women, and children who experienced divorces. They offer unique perspectives that are not regularly found on other sites about divorce.

I recently interviewed Mandy Walker on the Divorce and Your Money Show. You can listen to the interview here.

Overall Best Blog for Financial Planning during Divorce: Divorce and Your Money by Shawn Leamon, MBA, CDFA

Shawn started his career as a financial advisor, then branched out into financial planning for divorces. He created “Divorce and Your Money” to help people going through a divorce make smart financial decisions, save money, and protect their assets.

This website is a great resource for financial guidance when facing a divorce. The podcast is free and offers great information on the go, which is a big plus for busy people who do not have time to sit down and read. The blog covers a large range of topics related to financial concerns during divorce.

The site offers resources for everyone going through divorce, as well as coaching for people who want more individual attention (generally for those who have larger assets). He also offers an affordably priced course called Divorce 101: Your Complete Divorce Plan.

(Full Disclosure: The author is affiliated with Divorce and Your Money.)

Runner-Up Blog for Financial Planning during Divorce: Think Financially by Jeff Landers, CDFA

Jeff Landers writes an informative financial blog for women. He is one of the most prolific writers in the divorce industry, is a regular commentator for Forbes, and is the author of several divorce books, including DIVORCE: Think Financially, Not Emotionally® Volume I: What Women Need To Know About Securing Their Financial Future Before, During, and After Divorce (Volume 1).

He also offers consultation services for those with more complex financial issues. If you want information, his books are the best resource.

Is there a blog you love that I missed? Leave a comment below.

Notes: Blogs focused on family law are excluded from this list, as laws vary by state. I have exclusively focused on blogs that help with the emotional and financial elements of divorce.

This post contains affiliate links.

Find this information helpful? Please share it with someone else who needs it.

Shawn Leamon, MBA and Certified Divorce Financial Analyst, is the host of theDivorce and Your Money Show, the #1 show on iTunes that discusses personal finance issues in divorce. He is also author of Divorce and Your Money: The No-Nonsense Guide, available on Amazon. Learn more

Disclaimer: Divorce and Your Money and its affiliates do not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.

Jan 23, 2017

Surviving Divorce after 50

Divorce is always complicated, but the stakes are even higher when you are getting a so-called “gray divorce.” The divorce rate for people over 50 has doubled over the past decade. And many of them have been married for over 20 years. A big driving force is increasing life expectancy. Today, when you are 50 years old, it is easily conceivable that you will live for another 30, 40, or even 50 years. Even if your relationship with your spouse is decent, do you want another 30 years of the status quo? Or is it time for a change?

Marriages end for all kinds of reasons, including poor behavior, growing apart, boredom, and financial issues. But surviving a divorce after 50 comes with unique challenges:

Retirement Is Coming (or you’re in the thick of it)

Even if you had your retirement under control before you started pursuing a divorce, it is going to look a lot more uncertain after you are facing it. The prospect of losing a large chunk of your savings, perhaps even half of your retirement, can be a daunting realization.

The picture becomes even more complex because retirement assets are some of the most complicated to split during a divorce. Pensions, IRAs, and 401Ks all have different rules and requirements, as well as tax consequences and other complications.

Health Concerns Are at the Forefront

Additional health concerns occur when you are over 50. You may have already experienced them, and others are essential as preventative measures. Your medical expenses have likely increased, and you might even be considering long-term care. To understand what options you will have available to you after the divorce is over, you must be well-informed throughout the process.

You May Be Supporting Adult Children

Your children are probably adults if you are getting divorced later in life. However, they are still an important concern as you proceed through a divorce.

The pain of watching parents split is never easy, no matter how old you are. Your adult children may intellectually understand that all relationships do not last forever, but you must still keep them at the forefront of your concerns. The future of your relationship will depend on it.

In addition, even though your children may be in college or working full-time, you may be accustomed to providing for financial support for them (or your grandchildren). Although divorce may be inevitable, you should realize that every dollar you spend paying attorneys is less support that you may be able to provide your children in the future.

In the coming guide, I am going to walk you through the key issues in a grey divorce, as well as some helpful tips to keep you from making financial mistakes that could hurt you for the rest of your life.

4 Ways to Avoid Devastating Financial Mistakes that Could Derail Your Retirement

1) Choose the Right Method of Divorce

Divorce does not have to be a fight. The traditional litigation method may be the least effective way to split, so you should investigate two alternatives: mediation and collaborative divorce. If you are civil with your spouse, you should seriously consider these methods:


Mediation occurs when you hire a neutral third party, such as a retired judge, to help navigate all the issues in your divorce or resolve particular sticking points.  In order for this third part to be the mediator, both you and your spouse have to agree on this person.

You can both still have attorneys help you navigate your wishes and negotiations, but the process is generally less formal and contentious. You, your spouse, the mediator, your attorneys, and any other advisors, such as a Certified Divorce Financial Analyst, sit in a conference room and knock out the key issues.

The downside to mediation is that the outcome is non-binding. If you do not come to a resolution, or if one of you changes your mind later, then the process could be waste of time and money. You will have to do your homework, think about the relationship with your spouse, and really consider if mediation will work for your situation.

Collaborative Divorce

Collaborative divorce is another method to seriously consider. It is structured on the premise that trying to fight and “win” is a poor way to resolve divorce. Collaborative divorce is actually a better idea than trying to sit down and solve problems. You and your spouse will work with a team of collaborative divorce professionals, and come up with a more amicable settlement (that is mutually beneficial).

At the outset of the collaborative divorce process, you, your spouse, your attorneys, and other advisors must commit to this process—in order to come to a resolution. If you do not, you may end up having to go to court. Then your attorneys and advisors have to resign from your case.

The goal is to come up with a peaceful resolution to your divorce without a fight, so there is a strong emphasis on mediation and negotiation.


Sometimes you have to litigate the divorce. In other words, you and your spouse hire different attorneys to represent your interests. If you do not come to a settlement out of court, a judge will decide those issues for you.

Although litigation is the most well-known kind of divorce, it is also the most expensive. Quite simply, litigation is a fight. In fact, the cost of litigation is directly proportional to the amount of acrimony you have with your spouse. The process can drag along for years, and oftentimes, the only winner is an attorney.

That said, perhaps you and your spouse do not get along. Or there is abuse or another issue that prevents you from using mediation or collaborative divorce. If so, litigation may be the best option for you.

Fighting is Expensive

There are many advantages to mediation or collaborative divorce, particularly when you are older. These processes are usually cheaper, faster, and less formal than the traditional route of litigation. Perhaps more importantly, using one of the alternative methods can help maintain a better long-term relationship with your soon-to-be ex-spouse and your children. The direct combat of litigation can end up bankrupting you, and it can leave a trail of damaged relationships in its wake.

2) Prepare Financially

Understand Your Current Financial Situation

If you were not previously involved in the family finances, now is the time to understand what has been going on. You should collect your tax returns, payroll stubs, regular bills, bank and investment statements, real estate information, and other documentation to gather a comprehensive snapshot of your current situation and your financial history.

When the divorce is over, you will be living independently, and you will need to take charge of your current finances. [Check out this course Divorce 101: Steps to Take Before Divorce to help you as you plan.]

Create a Post-Divorce Budget

Splitting your current lifestyle in two is difficult, and you need to understand all the costs involved.  In addition to expenses related to the divorce, your existing assets will be split in two—and not necessarily 50/50.

In other words, you incur many new expenses to maintain a home of your own: moving costs, new furniture, a new mortgage or rent payments, and new heating, internet, and electricity bills.  As you think about what your needs will be after the divorce, create a budget. Then you can protect your future and understand your needs. You may realize that the lifestyle you were accustomed to while you were married may look different after your divorce.

Open Individual Accounts

As you move on with your life, you will need your own checking and savings accounts, credit cards, and other financial information. The joint accounts you once had will eventually need to be closed, and you will maintain all the assets with just your name on them. If you need credit (such as a mortgage or car loan), your personal credit history will be the determining factor after the divorce. Start now by creating accounts in your name only.

Hire a Team of Divorce Professionals to Help You

Divorce is always a difficult process. But when you are over 50, it is an even higher-stakes endeavor. One of the best ways to protect yourself and your future is to build a qualified team of divorce professionals, who will assist you with the process.

There are three major areas of divorce: legal, financial, and emotional. You should hire a specialist to help you with each area. Given that divorce is a legal transaction, you will need an experienced divorce attorney to help you. To help with the complex financial considerations in divorce, hire a Certified Divorce Financial Analyst. A therapist can help you work through the often-devastating emotional effects of divorce, and can keep you focus on the big picture.

Don’t Forget about Social Security

After the age of 62, Social Security can serve as an important source of income for you. After divorce, you may have the option to claim your own Social Security benefits (or those of your ex-spouse’s). To receive your ex-spouse’s Social Security, you must meet certain criteria:

  • You must have been married for 10 years or more.
  • You must be over 62 years old.
  • Your ex-spouse must be eligible to receive Social Security benefits.
  • Benefits you are entitled to receive from your own work must be less than the benefits you would receive from your ex-spouse’s work. These specifics can be determined by going to the Social Security Administration website, and doing the calculation yourself.

Social Security has a lot of rules, and they can be confusing. Here are a few things to keep in mind:

  • Social Security benefits are not marital assets, so you do not need to negotiate them during a settlement.
  • You should learn your spouse’s anticipated Social Security benefit—to see if you should be claiming 50% of his or hers, or claiming your own benefit.
  • If you do claim your spouse’s Social Security benefit, it will not have any direct impact on your spouse—as it is a government-sponsored program.
  • Once you are eligible for benefits, you should start claiming them—since there is no way to catch up on missed benefits.

3) Divide Retirement Assets the Right Way

During divorce, retirement assets are the most complex to divide. There are three general categories of retirement assets: defined contribution plans, defined benefit plans, and individual retirement accounts. We will review each one to help you understand what is involved during divorce.

Defined Contribution Plans

With a defined contribution plan, the employer contributes a certain amount of money to the employee’s retirement plan—throughout the duration of that person’s employment. Upon reaching a certain age, funds can be withdrawn from the policy. The amount of money you have depends on the investment performance of the funds over time.

The most common types of defined contribution plans include the 401(k), 403(b), 457, Thrift, Profit-SharingMoney Purchase, and Employee Stock Ownership plans.

Defined Benefit Plans

Commonly called a pension plan, defined benefit plans guarantee an employee a specified monetary benefit once they reach retirement. The contribution formula takes age, duration of employment, and salary into account. Determining the value of a defined benefit plan is complicated, so the employee’s life expectancy is often a substantial factor in calculating the future value of benefits.

Individual Retirement Accounts (IRAs)

An IRA is one of the most common retirement plans. So participants are allowed to contribute a certain percentage of their annual income and deduct the contributed amount from their taxable income. IRAs have several types, including Tradition, Roth, SIMPLE, and SEP.

Dividing IRAs Is (usually) Easy

Dividing an IRA during divorce is simpler than other retirement plans, because it does not require a QDRO. A simple signed letter or a court order must indicate how to split the assets. And the IRA can be transferred to the other party without any negative tax consequences (when done properly). Future tax obligations will fall under the responsibility of the new IRA owner.

When to get a Qualified Domestic Relations Order (QDRO)

In divorce proceedings, couples typically require a QDRO to distribute their defined contribution or benefit plan. As per the divorce decree, the QDRO summarizes the division of a retirement plan.

It must contain the following:

  • Personal Information - Details and mailing address of the retirement plan.
  • Gains and Losses - Due to the investment market’s volatile nature, the potential gains and losses have to be accounted for when splitting a retirement plan. Parties may also decide on a set figure (without considering any potential gains and losses).
  • Valuation Date - Retirement plans are valued at different intervals. In the QDRO, it is necessary to include the valuation date closest to the official divorce date.
  • Surviving Spouse Provisions - To safeguard his or her own interests, it is important to have the former spouse listed as the beneficiary. In the event that the retirement-plan holder dies before the approval of the QDRO, the former spouse would still be entitled to a portion of the plan.

The QDRO is complicated and requires an expert who has experience drafting this agreements. If you are going to need one, present the QDRO to the plan manager long before the completion of divorce. Then you can ensure that you have covered the proper details, so you will avoid hang-ups later.

4) Review Your Estate Planning and Medical Coverage

When divorcing after 50, one of the most complex areas to consider is how to handle estate planning and insurance issues. Each of these issues could easily span a book (or an entire career), so we will only focus on the high-level concerns you should think about during divorce.

Contemplating your mortality is never fun, but it is an essential part of protecting your wishes.

Estate Planning

After divorce, you will need to make sure you update your essential estate-planning documents. You and your estate attorney should investigate creating the following documents: a will, durable power of attorney, and healthcare proxy. You should also check and update the beneficiary designations on all of your accounts and insurance policies to ensure that they meet your wishes. If you have never looked at or prepared these documents before, the time after your divorce is a great place to start.

You probably do not want to end up in either one of these situations: your ex-spouse ends up receiving a large chunk of your assets, or is responsible for making essential medical decisions for you.

Life insurance can also play a key role in the estate-planning process, as it can provide your family with quick access to funds upon your death. And it can also play a role in minimizing estate taxes.

Medical Coverage

Medical costs and medical insurance only get more important with age. With the high costs of medical expenses, health insurance is one of the most important assets you can have. If you are covered by your spouse’s insurance plan when you start a divorce process, it is time to think about how that will affect your health insurance coverage in the future.

You can include health insurance coverage as part of the divorce decree—particularly if you were not working outside the home, and have easy access to health insurance after the divorce.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was created to protect employees and their dependents from losing group-insurance coverage because of divorce or job loss. Therefore, under COBRA, you may be eligible for temporary insurance coverage through your spouse’s employer. COBRA has eligibility conditions. For instance, the company in question must employ at least 20 people. But if it is available, you may continue coverage for up to 36 months (at your own expense).

Other options to consider include the health insurance marketplace, Medicare, or Medigap. Medical coverage is a complex subject, so make sure you investigate your options—sooner, rather than later

Parting Thoughts

When facing divorce after 50, half of your assets (and your whole financial future) are at stake. So you need to make sure you focus on your long-term financial security. You should think about your retirement. How are you going to have enough cash for daily living? Know that the lifestyle you lived before the divorce will not necessarily continue.

The decisions you make today will affect you for the rest of your life. So prepare well, and avoid making financial mistakes you will regret.

Find this information helpful? Please share it with someone else who needs it.

Shawn Leamon, MBA and Certified Divorce Financial Analyst, is the host of the Divorce and Your Money Show, the #1 show on iTunes that discusses personal finance issues in divorce. He is also author of Divorce and Your Money: The No-Nonsense Guide, available on Amazon. Learn more at

Disclaimer: Divorce and Your Money and its affiliates do not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.

Jan 19, 2017

This article was originally published on Read the original article here.

Starting the search for a brand new divorce attorney can be stressful and overwhelming. Just a quick glance through the phone book reveals countless options, but how will you know which attorney is the right one for your divorce? You should know what you are looking for from the very first phone call and know what to expect from your initial consultation meeting. Head into that first meeting educated about what services they can provide and what you believe will work best for your divorce.

A relationship with your attorney is the same as any other business relationship you maintain. Can you work with this person? Do you actually want to work with this person? Making key decisions such as this one at the very beginning of the process is far better than making them six months into your divorce proceedings.

When you are beginning a relationship with a new divorce attorney, here are a few tips for determining if they are the right fit for you:

1) Are they experienced and persuasive?

When you first meet an attorney, take note of whether or not you feel they have a particularly powerful presence. Are they persuasive enough to represent your interests and persuade the opposing counsel? This character trait cannot be underestimated when you are initiating a business relationship with an attorney. After all, your settlement is uncertain if they cannot convince opposing counsel or a judge of all that you deserve.

Another key characteristic of having a successful divorce attorney and client relationship is their experience level with family law. Ask questions regarding how many years they have been practicing family law, what other trades they serve, and how many divorces they process each year. You are keeping an eye out for an attorney that is highly specialized in family law and divorces, not a “jack of all trades” who dabbles in family law, construction law, and seven other specialties.

The amount of experience they have can be a good predictor of whether or not they have enough knowledge of the laws surrounding divorce to handle your case quickly, efficiently, and ensure that you receive all you are entitled. When they are highly specialized, they should have a greater amount of education regarding the laws and more experience in putting it into practice – both of which are great attributes for you as the client.

You also need to consider their experience and relationship with your spouse’s attorney, if you are privy to who that may be. A hostile relationship between your attorney and the opposing counsel could take the focus off your proceedings and shift it toward their relationship and motives with the other attorney.

2) How will you interact with them?

Customer service is a critical consideration, beginning with the very first phone call. Is the receptionist polite and informative? Does the attorney return your phone call in a timely manner? Answering either of those questions in the negative could be an indicator that you will not be pleased with the customer service they will provide throughout your proceedings.

Ask what the policy is regarding your communication with them. You should know what days they spend in the office, and what timeframe you can expect them to return your phone calls and emails within. If they spend several days each week out of the office, inquire whether someone else in the office will be well-versed with the specifics of your case in case you have pressing questions when the attorney is not available.

Furthermore, how will they charge for the work and communication that is involved in your case? You should have a detailed account of how the billing rates work, including if they differ among categories such as legal advice, filing paperwork, and making copies. Knowing how they count the minutes that you are in communication with them is an important consideration as well. Does your attorney charge per hour, in fifteen minute increments, or do they tally up each individual minute? The billing schedule can make a substantial impact on what the final bill for your divorce will be.

3) What service options do they provide?

Entering into an attorney-client relationship, you should already have a fair idea of what you believe you will need for your proceedings. The first question might be whether the attorney or their firm has relationships with other qualified professionals who can assist in trickier situations. Do they have a Certified Divorce Financial Analyst, forensic account, mediator, or other attorneys they can consult with in the event of needing outside advice and opinions from specific experts? When your attorney manages close relationships with other trades and services, it is far more convenient for you to reach out for additional assistance if necessary.

You should also inquire whether they offer “unbundled” legal services or mediation. This allows you to cut some of the costs associated with divorce proceedings by only paying for the specific services that you are in need of. Whether you desire just legal advice, someone to help draft and file documents, or whether you need someone to manage all of the proceedings from start to finish, knowing what your options are can be helpful.

This even allows you to determine if you want to make the switch to a more do-it-yourself approach if you see your bill rising faster than you anticipate. This is a good time to begin asking questions about what you can do yourself to speed the process along and save on the costs. Are they open to a more do-it-yourself arrangement with you when it comes to documentation or filing paperwork? Asking upfront can save you money in the end if you decide that you are capable of handling some of these issues on your own.

Come to the meeting prepared.

While not a requirement, it does not hurt to come to the meeting prepared with the important documents that you will need to discuss. These could include a selection of recent tax documents, paystubs, bank statements, proof of adultery or abuse, and more. It may even be helpful to have your marriage license and important documents relating to you children (health papers, psychological papers, addresses, etc.).

By bringing all of the additional documentation that you believe is pertinent to your case, you are granting the attorney a clear look at what marital assets and liabilities will need to be divided. What do you have in retirement accounts, real estate, savings, and investments? Looking at the bigger picture may allow them to make clearer determinations of what the next steps and plans might look like.

Before you leave your initial consultation, you should receive some proposed game plan or plan of action from the attorney regarding what they believe the best steps to take are. You will need to evaluate whether you agree with their evaluation, especially if they believe it could end up going to trial. If you believe that your divorce could be settled more amicably (and for less cost), then you might want to reconsider your relationship with this attorney.

Because this is a significant business relationship that you will be a part of for the coming months, you should consider meeting with multiple attorneys if you are not satisfied with the initial consultation. There is nothing wrong with moving back to the drawing board before you commit to an attorney for the long haul. You never know how long your divorce proceedings could last, so be certain that you are satisfied with your attorney’s experience, qualifications, customer service, and cost. 

Find this information helpful? Please share it with someone else who needs it.

Shawn Leamon, MBA and Certified Divorce Financial Analyst, is the host of the Divorce and Your Money Show, the #1 show on iTunes that discusses personal finance issues in divorce. He is also author of Divorce and Your Money: The No-Nonsense Guide, available on Amazon. Learn more at

Disclaimer: Divorce and Your Money and its affiliates do not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.

Jan 12, 2017

12 Ways to Avoid Common Divorce Settlement Mistakes in 2017: How to Get a Divorce Without Losing Everything

Approximately 95 percent of divorces are settled out of court. If you or your attorney make a mistake during the divorce settlement, it can affect you for the rest of your life.

Your divorce settlement agreement will cover three main areas:

  • Dividing property
  • Spousal support
  • Child support and custody

In 2017, you will need to know what to ask for in your divorce settlement agreement to avoid big regrets later. Shown below are twelve ways to financially get the most out of your divorce.

1) Keep the Big Picture in Mind

Divorce is complicated on many levels: emotionally, legally, and financially. Facing the end of “happily ever after” can be gut wrenching. Given the complexities involved, it can be difficult to stay focused on the big picture. Treat divorce like a business transaction by determining your goals during and after the divorce so that the decisions you make today will set you up for the best position in the future. Before you start a fight about the kitchen chairs, make sure you view every decision during divorce through this lens: “Will this be helpful in the long run?” By staying focused on the big picture, you can avoid small squabbles that will end up being more hurtful than helpful.

2) Hire Your Own Attorney

You should not share the same attorney with your spouse. Perhaps your spouse has suggested that you share an attorney to save money. Nevertheless, as you try to decide what should be included in a divorce settlement, it is imperative that you have an experienced family-law attorney to stand up for your interests. Otherwise, you could regret it later.

3) Look for Hidden Assets

Do you suspect that your spouse might be hiding money from you? During divorce, it is an all-too-common occurrence. Failing to look for hidden assets can cost you a lot of money that you might be rightly entitled to receive.

Your spouse could hide assets from you by

  • transferring them to a friend;
  • reporting a lower income and higher expenses;
  • creating fake or inflated debt;
  • withdrawing a lot of money and putting it into a safe deposit box;
  • overpaying taxes to the IRS;
  • undervaluing assets, such as antiques and collectibles.

If you suspect that your spouse is hiding assets from you, you should consider having a private investigator or forensic accountant review your financial details.  Hiding assets during a divorce is a crime that has penalties. You need to protect yourself if you have any suspicions.

4) Know How Much You Owe

Debt is a highly contentious part of divorce, and it is one of the common reasons why marriages end. Debt includes credit cards, any other form of credit, mortgages, and any loans.

Early in the divorce process, check your credit report to see every account with your name on it. If your name appears on an account, you are legally responsible for it—regardless of what your divorce settlement states. To avoid a detrimental impact on your credit, keep your payments current on joint accounts.

In divorce, you need to plan, do your homework, know how much you owe, and stay on top of any outstanding debt both during and after the divorce process. Poor credit can keep you from getting a mortgage or a car loan—or just moving on with your life.

5) Find Out What Your Assets Are Really Worth

It is not always easy to determine the value of certain large assets. For example, if your home has not been recently evaluated by a certified appraiser, you may not know how much the home is currently worth due to fluctuations in prices. Determining the value of the home is not as simple as logging in to an online appraisal website, such as Zillow or Redfin. Furthermore, the value of jewelry, art, antiques, and other collectibles is difficult to assess, so it may be wise to get an expert opinion.

One common negotiation tactic that your spouse may use is attempting to mislead you about the value of assets, which can lead to a one-sided divorce settlement. Do not let that happen to you. Properly appraise any valuable assets you have questions about.

6) Learn the Rules of Retirement Plans

Pensions, an IRA, a 401(k), and other types of retirement plans have their own set of rules. They also have specific procedures you need to follow during divorce. If you are deciding whether or not you should keep a retirement plan, you need to know the various financial and legal complexities involved.

For example, many defined benefit and contribution plans require a Qualified Domestic Relations Order (QDRO) to split the retirement plan. Failing to follow the necessary rules can cause you to have a variety of post-divorce headaches.

7) Evaluate the Liquidity of Assets

Not all assets can be immediately sold. Some may take months or even years before you can receive the cash you need. For example, if you want money from your home, it may take months to sell or refinance. Investment and retirement accounts may require different time periods, ranging from a few days to several years before you can access the funds in the account.

For example, hedge funds and private equity funds may have multiyear lockups that prevent withdrawals from your account. For every asset you are thinking about keeping during divorce, you need to know how hard it will be to liquidate when you need the funds. Otherwise, you could find yourself needing money but not being able to access it.

8) Realize Tax Consequences

Taxes can have a major impact on your divorce settlement. If you receive spousal support, that money is considered your taxable income, but if you are paying spousal support, those payments are tax deducible. On the other hand, child support is not taxable for the recipient or the payer.

When evaluating your home, investment accounts, and other assets, taxes get even more complicated.  If you do not understand the tax consequences of your settlement, you could find yourself in an unwanted position: $1,000 is only worth $500 after you pay your taxes.  To ensure that taxes will not take too much of a bite out of your divorce settlement, consult a Certified Divorce Financial Analyst (CDFA) or CPA.

9) Understand Every Word in Your Divorce Settlement

Divorce settlements are often long, complex documents. They have many legal terms and phrases, which will affect you for the rest of your life.

You might be unclear about part of the settlement or have a question about its significance. If so, be sure to ask your attorney for further clarification. The settlement may have a mistake, or a clause may not accurately reflect your best wishes.

Asking questions—no matter how small—can save you a lot of regret and heartache.

10) Determine if You Can Afford the Settlement

Is the settlement something you can afford over the long term? Even though the settlement may make sense over the next year, it may not make sense in five, ten, or twenty years. As part of the process, you should create an appropriate budget for your life as a single person, which includes your estimated income, expenses, and taxes.

You should determine if the divorce settlement allows you to live comfortably in the future or if you will need to make lifestyle adjustments. To make sure it is financially feasible for you, have a CDFA help you analyze both the short- and long-term implications of the settlement.

11) Secure Support Payments with Insurance

Spousal support, child support, and other divorce settlement payments can occur over the course of many years (and in some cases, a lifetime). What happens if your soon to be ex-spouse unexpectedly becomes disabled or passes away but still owes you support?

This situation can cause a host of financial complications, so you need to protect yourself. One method is to secure your divorce settlement with life insurance and/or disability insurance.

If your ex-spouse is no longer able to make payments for some reason, you will then have insurance that can take care of any unpaid support. Many people fail to utilize this option. Should something unforeseen happen to your ex-spouse, you will have a good layer of protection.

12) Create a Post-Divorce Financial Plan

Even though you have signed the divorce settlement, you may not have finished the divorce process. You will have to make sure that everything occurs during the settlement—as you agreed.

For example, if your spouse is supposed to remove your name from a joint account, you must follow up to ensure that it has been removed in a timely manner. If you are supposed to receive part of a retirement plan at some point, you need to mark your calendar accordingly; then you can ensure that you do not forget about it later on.

Your tax status will change after the divorce, so you should consult a CPA to help you navigate your tax situation. You should sit down with a financial planner and plan for retirement—adjusting for your new life.


Find this information helpful? Please share it with someone else who needs it.

Shawn Leamon, MBA and Certified Divorce Financial Analyst, is the host of the Divorce and Your Money Show, the #1 show on iTunes that discusses personal finance issues in divorce. He is also author of Divorce and Your Money: The No-Nonsense Guide, available on Amazon. Learn more at

Disclaimer: Divorce and Your Money and its affiliates do not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.