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Divorce and Your Money - #1 Divorce Podcast

Visit us at https://divorceandyourmoney.com. Join Shawn Leamon, MBA and Certified Divorce Financial Analyst as he breaks down divorce with practical advice to protect your financial interests. With more than 500,000 listeners and 200 episodes, Divorce and Your Money is the podcast #1 divorce podcast in the nation. Get your questions answered, checklist your way to financial freedom, and safeguard your new future with an expert’s help… because you and your family are worth it.
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Feb 15, 2018
Today we bring back guest Matt Sweetwood, to announce the release of his new book:
 
Leader of the Pack: How a single dad of five led his kids, his business and himself from disaster to success.
 
"I was unprepared, overwhelmed, broke, and often depressed and I was sure I would not live through the experience. 
 
With five kids under eight years old to care for, a large business to run, a court system bent on bankrupting me, all I saw was a 20-year jail term ahead of me, ending with me old, broke, and broken…Finally, though, one day, it was over…
 
Get it on Amazon now!
 
Available for Download: Feb 15, 2018
Soft Cover Available: Mar 8, 2018
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Feb 6, 2018
What happens if you are going through a divorce and have digital assets? Digital assets can come in many forms. Bitcoin and cryptocurrencies are popular topics in the news lately, but there are other forms of digital assets like your music library, ebooks, rewards points, or even a website you own. When it comes to digital assets, state laws have not yet caught up. Many of these assets are relatively new, and the laws cannot always address all the complexities of splitting them. In addition, there are often unique elements about digital assets that make it difficult to know their value and how to split them.
 
This episode will give you some steps to take if you have any kind of digital assets.
  1. Figure out if you have any digital assets.
  2. Determine what is marital versus separate property.
  3. Figure out what you can realistically do with those digital assets.
 
Digital assets can be hard to find. In some cases, it may even be hard to realize that you have them. Some of you may have an online business, like this podcast. 
 
You may have a blog, an ebook, or Bitcoin. Digital assets are just data. Since they are intangible, it can be challenging to identify them. Think about what assets you may have. Most of you probably have some kind of rewards points, such as a hotel brand or airline rewards. These can often be translated to a dollar value.
 
Most of you have been married for a length of time, from several years to decades. In that case, the digital assets you have are likely marital property, especially if the assets are so new that your marriage predates them.
 
The nature of the digital asset and its value will be relevant. For example, you can determine a dollar value for your airline miles. The other spouse may end up getting a credit for those miles in the divorce negotiations. You may also opt to transfer the miles.
 
Some digital assets can be split relatively easily, such as Bitcoin, but you and your spouse could decide that one of you will keep the asset while the other receives the cash value of their portion.
 
Digital assets can be easy to hide, because they are intangible and there is often an element of anonymity. It is important to be aware of what digital assets you and your spouse have and address them in your divorce negotiations.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Jan 17, 2018

This episode will explain why most of you will want to finalize your divorce in 2018, if possible. After 2018, divorce will be even more complicated than it already is. You probably already want an efficient divorce process, but the recent changes to tax law will provide some additional incentive to move things along.

The change in tax law primarily concerns spousal support. Taxes are not a fun topic, but they are critically important to understand so you can make the best decisions for your situation. How you structure your divorce settlement can ultimately get you 20% to 50% more money and assets. For more about taxes and divorce, visit our archive.

To understand what is changing this year, we first need to understand how spousal support has worked for the past 75 years. Currently, if you receive alimony, you claim it as income and pay taxes on it. The person who pays alimony receives a tax deduction for the amount of the alimony.

For divorces that are finalized after December 31, 2018, the person who receives alimony will not count it as income. The person who pays the alimony will not receive a tax deduction. Why is this such a big deal? If you are the person paying spousal support, you get no tax benefit for paying the support, so you have an incentive to pay less. People who will receive support will probably be getting less.

These changes came from the tax bill that was passed at the end of 2017. If you can wrap up your divorce in 2018, you will not have to worry about it. However, if your divorce is not finalized until 2019, you will be affected by this change. If you are paying support, finalizing in 2018 will give you tax benefits. If you are receiving spousal support, you are highly likely to get more support if you finalize this year.

Who receives spousal support today? In a recent census, it was found that about 97% of people receiving spousal support are women. Most of them were stay-at-home parents during the marriage, or they worked fewer hours than their husbands. Although there are many female breadwinners, women are going to be affected greatly by this law.

What are your options if you find yourself in this situation? You can often come up with clever, creative solutions that will work for everyone. Here is a simple example. If you know that you will probably receive less spousal support for the foreseeable future, you can structure your settlement so that you get more money up front as a lump sum. This can help make up for the tax benefits that you will not be receiving. Look for ways to structure your settlement that will benefit you in the long term.

Many people wonder why this law is changing. There is a good reason for it. In 2017, about 350,000 people claimed they were paying spousal support, and received a tax break. However, only about 180,000 people said they were receiving spousal support (and paid taxes on that spousal support). This means there are 170,000 people who received spousal support who did not report it to the IRS. That adds up to billions of dollars of lost tax revenue.

In future episodes, we will discuss more details about taxes and how to structure your settlement. There is no need to panic, but it’s important to understand how this change will affect you in the broader context of your divorce negotiations. If you understand that you will be losing money because of the change in tax law, you can look for ways to make up for it.

Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Jan 3, 2018
With the start of 2018, there is a lot you should be doing to prepare for divorce. This is a great introductory episode for you to listen to! 
 
Learn more about all of the great Divorce and Your Money resources at divorceandyourmoney.com.
Dec 21, 2017
In the previous episode, we discussed the initial things you should do when you get your divorce settlement. You will need to study your settlement in-depth and create a calendar of all the dates and deadlines that will be coming. It will be important to stay on top of everything, even as your divorce is wrapping up, because there are a lot of small things to handle. It’s not quite time to rest yet. Listen to the previous episode for more details.
 
This episode will be about setting up your new life. You may not realize all of the things that you will need to take care of. Many of these things are tedious and boring. However, they’re very important.
 
  1. Check your credit report.
  2. Set up new financial accounts.
  3. Update your will and estate planning documents.
  4. Check your beneficiary on all your accounts.
  5. Speak to a financial advisor.
  6. Speak to an accountant.
 
When you have finally gotten divorced, you will need to make changes to a lot of financial accounts. Regardless of your level of income, you should check your credit report. Look for any joint account that is still active, and close it or freeze it. Usually to close an account, you must have a zero balance. If you do not have a zero balance, you can freeze it to ensure there’s no additional spending on that card. You will still be liable for any account that is left open that has your name on it. You could face a difficult situation down the road if you don’t handle it now.
 
Change all of your accounts so that your spouse will not have any information about your account, such as the account number. If you have any joint bank accounts that are still open, split them up and close them. Don’t make it possible for your ex-spouse to take more than their fair share, even if you doubt that they would do such a thing. Also, change all of your passwords and security questions. It’s best to protect yourself.
 
Estate planning documents will outline what will happen to you when you pass away or are incapacitated. If you already have these documents, it is likely that your ex-spouse is listed on them. Update your will and other documents with an estate planning attorney. You will have to think about who will take care of your children, how your assets will be divided, and what will happen to you if you are incapacitated.
 
Your bank account, investment accounts, pension plans and insurance policies all have a beneficiary who will receive the funds if something happens to you. When you are married, your spouse is often the beneficiary by default. Update these appropriately.
 
It can be difficult to make a budget after a divorce that takes your goals into account. You will likely need to plan for your next house, your next car, or your retirement. If you don’t have a good financial plan, it is time to build one. Find a financial planner. Many will help you for free. We’ve talked about post-divorce financial planning in a prior series of episodes. A financial planner will help you achieve your goals.
 
Many of you are financially savvy. Even so, it’s advisable to consult an accountant the year after you get divorced. They will help you get all the right deductions and minimize your year-end tax bill.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Dec 13, 2017
Right now, a lot of divorce cases are rushing to a close. Most people want to finalize their divorce before December 31. The year that you are officially divorced is the first year you file taxes on your own. However, just because your divorce is wrapping up, it does not mean that the process is over.
 
In this episode and the next, we will cover what to do after your divorce is over. Your post-divorce tasks fall into two categories. You need to ensure you receive everything you agreed to (and that you give up everything that you agreed to). You also need to update all of the documents in your life to reflect your new situation. This episode will be about the first category.
 
Once you have the settlement in hand, you need to sit and study it, line-by-line. You want to find time when you will not have distractions. Take notes as well. Set up your notes with a column for what you need to do, what your spouse needs to do, and optionally, anything that your attorneys need to handle. As you go through the settlement, make notes of whatever you need to do. Do you need to transfer money from your bank account, or make sure that your spouse does? Do you need to set up a parenting schedule? Go through each line to make a list of everything that you need to do. There will be a lot of little things that need to happen.
 
Once you are very familiar with your settlement, and you have that list, you will need to create a calendar. This is a complicated step. Your calendar will have a lot of different dates on it. In some cases, you may have to start the process far ahead of the deadline. For example, if you are transferring a 401k, that process can take a few months.
 
Other dates will be routine and repeating. If you have a custody schedule, you will have to map out every date that the kids are supposed to be in one place or another, for years. Your life will revolve around those dates, so they are important to have in your calendar, even if the dates are far in the future.
 
Some asset transfers are slow, especially with large, illiquid assets. The most common one is a house. It will take time to sell a house, often 6 months to a year, before you will see the proceeds. In some situations, you may be transferring ownership of the house, but this can present complications. There was one case where a condo was being transferred. It took 8 months and nearly $500,000 in legal fees because of the complexity of the transfer. It was important to keep the deadline in mind, even though there was a complicated process going on.
 
Likewise, if you are selling a house, you will need to start preparing the house for sale early, so that you have ample time to sell the house and receive the highest price possible. Otherwise you may be forced to do something that is financially unwise.
 
For the calendar dates that will take time, you can create milestones for each issue. For example, if you are splitting up a 401k, you will need a QDRO – which can take months to obtain. The first milestone would likely be finding a QDRO attorney. Your second milestone could be to submit documentation to that attorney. The third would be obtaining pre-approval, and so on. Creating milestones for large tasks will help you stay on track to meet your deadlines. Many of the tasks on your list will need to be broken down into milestones, so your calendar will be complex.
 
If you aren’t a very organized person, you may want help breaking your task list into manageable parts. Ask a friend or hire a personal assistant to help you set up your system. If you choose to hire a professional organizer, you may work with them for a few days in the beginning, and then just once per month to keep you on track.
 
In the next episode, we will discuss what you need to do to set up your new life – setting up financial accounts, checking your credit report, and updating important documents.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Dec 6, 2017
In this episode, we’ll discuss different types of divorce attorneys. Divorce financial analysts often work with a wide range of attorneys. They all have different styles. Many attorneys are excellent. In some cases, you may encounter an attorney that is not so good.
 
The goal of the divorce attorney or family law attorney is to have the best possible outcome in your divorce. What that outcome looks like will depend on your situation, but you want an attorney who will put you in the best position possible, whether it’s in terms of assets, support or child custody.
 
A bad attorney will hurt your chances of getting anywhere near what you deserve.
 
The attorney will be the most important person on your divorce team, other than you. They have the biggest effect on how smoothly your divorce goes. There are no hard-and-fast rules, but here are five types of attorneys you may want to avoid.
  1. The most expensive attorney.
  2. The “therapist” attorney (also known as the “best friend” attorney).
  3. The pit bull attorney.
  4. The too-cool-for-you attorney.
  5. The inexperienced attorney.
This is the attorney that likes to have a lot of billable hours, which can add up over time. These attorneys have the nicest offices, cars and clothes. Their staff is often picture-perfect, and they have an air of exclusivity. These attorneys aren’t bad attorneys. They are just expensive.
 
This attorney spends a lot of time discussing how you feel, and not enough time working on your case. An actual therapist is a great person to discuss your feelings with, but your attorney should be there to guide you through the legal process of your divorce. You could be paying $400 an hour or more for your attorney’s time, rather than a therapist for $120 an hour (with better results).
 
This attorney is extremely aggressive. They want you to fight on ever issue in the divorce, under the cover of being “tough.” That approach can be counter-productive. In episode 152, we discussed why you don’t want the most aggressive divorce attorney. In short, the aggressive attorney ultimately causes more harm than good. Aggressive does not equal effective. 
 
This attorney probably seems like a good choice on the initial meeting. Then, after you pay your retainer, they disappear. They don’t return your emails or phone calls. It seems like your case is just not that important to them. This is surprisingly common, and it can be very frustrating.
 
Your attorney should have experience practicing family law. If an attorney has experience in another area, that does not mean their skills will translate well. Family law has its own set of rules, regulations and guidelines. You should ask how much of their practice is dedicated to family law, how long they have been practicing family law, and how many cases they deal with per year. You should ask similar questions if you interview a divorce financial analyst.
 
If you find that you have a sub-optimal attorney, it does not necessarily mean it will be the end of the world. You can still get a good resolution to your case. Just be aware that if you have a bad relationship with your attorney now, the relationship will probably not magically get better. You will find yourself complaining about these same things months (or even years) down the line.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Nov 8, 2017
When you go to court, you may be going for a hearing or for a trial, and there are differences between the two. This episode will explain what happens in each situation.
 
Going to court is almost never like what you see on television. In particular, the process of going to court is not as glamorous as it seems on television.
 
When you go to court for a hearing, a judge will look at evidence and make a decision about a specific issue in the divorce. That evidence could be written documents, records, testimony, financial affidavits, and so on. The judge will make a decision on the issue in question after hearing the evidence. A hearing usually occurs while a case is still going on. It is not intended to resolve every issue in a case. A hearing can be for temporary issues, like temporary custody or spousal support. They may be used for a specific issue in discovery.
 
What happens at a hearing? You go to a court and go before a judge. Judges can vary greatly in age, race and background. Sometimes they are multidisciplinary, so they may hear other types of cases like criminal cases or business disputes. When you get to the court, you will wait outside the courtroom until you are called. Often, your attorneys will do the talking, although you may be asked questions or called to testify.
 
Trials are very different. Trials are more involved, and therefore, much more expensive. In a trial, a judge will make the final decision on many issues in the divorce, so the stakes are high. Not all trials are complicated, but many are. In some cases, people spend hundreds of thousands of dollars on their trial even if they don’t really have that much money to spend.
 
In a trial, you will present your evidence. The trial may last a day or a week, depending on your circumstances and local court rules. The court looks at the various issues in the divorce and resolves them. You may even have a trial with a jury, depending on your state, although it’s rare.
 
When you go to court, whether it be for a hearing or a trial, be aware that it will be expensive. The more work you can do up front, the better off you will be. If you are going to court, be prepared and understand what is at stake. Make sure to leave a good impression and put yourself in the best position possible.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Nov 1, 2017
This episode is about vocational experts in divorce cases. Vocational experts are only used occasionally, but they should probably be used more often.
What is a vocational expert? Often during a marriage, one spouse was not employed. They may have lost their job or they may have decided to be a stay-at-home spouse. It does not necessarily mean that they were unable to work, however. A vocational expert will help answer the question, “How do you know how much income a spouse can earn if they have not been working?”
 
As an example, a female client has a husband who holds a PhD and was in the military, but who chooses not to work. The client herself is a doctor. The husband is trying to get spousal support so that he can continue to be unemployed and be supported by his ex-wife. However, this gentleman could easily get a job because he is highly qualified.
 
In another case, the wife worked for a while early in the marriage, making $75,000 a year. However, when the couple had children, she stopped working so that she could dedicate the next twenty years of her life to being a stay-at-home mother. In this scenario, the wife is still capable of working, but has been out of the work force for such a long time that it will be difficult to immediately find a position like the one that she left when she had children. However, she does have some skills and a college degree.
 
In this scenario, the husband should consider getting a vocational expert to help determine how much income the wife might be capable of earning.
 
It’s important to factor in a spouse’s earning potential into things like spousal support and division of assets. Just because a spouse has not been working does not mean they cannot. If a person getting divorced is 50 years old, they could still feasibly have 15-17 years of working life ahead of them. They may need to start at a lower income level and work their way up, but whatever income they are earning should decrease the spousal support they receive.
 
This is why a spouse’s earning potential is a controversial issue. A vocational expert can evaluate a person’s abilities, education, and experience to determine their potential for employment. They will determine whether that person can find a job, and how much it might pay. If the person has not worked in a long time, they may start at an entry-level position. However, it can also be the case that the spouse is capable of earning a good salary, as in the example with the husband who holds a PhD.
 
You can present the vocational expert’s findings as evidence in court, whichever side of this debate you are on. If you are the spouse who has been working, a vocational expert can help you make the case that your spouse is capable of earning money, which can reduce your spousal support and/or child support. Conversely, if you are the spouse who has not been working, a vocational expert can help you establish that your career prospects are slim and that you need the spousal support. You can also use a vocational expert, outside of the context of the divorce, to help you assess your career options and make a plan for yourself.
 
Vocational experts are very persuasive in court because they are independent. Their goal is to present the facts of the person’s experience, education and skills and assess what kind of jobs and salaries they may be able to get. They are an important resource to consider for your divorce.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Oct 25, 2017
Electronic evidence may come into play in your divorce case. Electronic evidence can be from your computer, phone, text messages, apps, cameras, bank accounts, and so on. Everything you do these days has a record. You may need to look for evidence of your spouse doing something they shouldn’t, like getting a hotel room. It’s increasingly common for people to leave an electronic trail that can come back to hurt them later. Most people forget that everything they do is tracked, one way or another. 
 
As you go through the divorce process, keep these tips in mind.
 
1) Be aware that everything you do is recorded or could be recorded.
2) Do not try to hide assets.
3) Be aware that what you say or do can be taken out of context.
 
For example, if you make a threat during an argument or send a nasty text message, it can come back to haunt you. If you are about to say or do something that you might regret, take a step back and calm yourself down. All of your conversations on social media have a record of them, so they can be subpoenaed. Likewise, monetary transactions through your bank or credit cards will be traceable. Be aware if there’s something your spouse may have done, you may be able to access those records.
 
There are records of all assets, so it’s a bad idea to try to hide money. If someone really wants to track down money that went missing, they could. It can come back to hurt you during the divorce process, or even several years later.
 
As an example, let’s say that you are playing with your kids, and you playfully say, “I’m going to beat you up!” Your spouse might write that down and later tell a judge, “On Tuesday, June 2, he threatened the kids and said he was going to beat them up.” On paper, that transcript looks terrible for you. Quotes can be taken out of context in divorce to be used against you.
 
Technology is evolving so quickly that people often don’t comprehend all the repercussions it can have. Technology that is convenient on a day-to-day basis can ultimately hurt you during the divorce process. Minimize your interactions with your spouse. Be careful with what you say (verbally and electronically) as you are going through a divorce. Remember that what you say and do can end up hurting you later.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Oct 18, 2017
In this episode, we’ll discuss tips for when you’re going to court for divorce, whether it’s for a hearing or for a trial. If you will be going in front of a judge for your divorce, you should be prepared. Try to avoid making some of the most common mistakes with these tips:
 
1) Real court is not like television.
2) Dress appropriately
3) Show up early, but expect to wait.
4) There are time limits.
5) Not everything you may want to cover is legally relevant.
6) Answer questions truthfully.
7) Don’t do something dumb in the heat of the moment.
 
Court is not glamorous or exciting. Don’t expect it to be like television shows.
 
It is important to dress appropriately so that you make a good impression. Dress business professional, like you would for a job interview at a large corporation.
 
It can take time to find parking and get through security, so allow ample time. Arrive at least half an hour in advance. Even if you are on time, you may have to wait to be seen.
 
Every court has rules as to how it proceeds. For example, in Dallas, one court gives each side twenty or thirty minutes to present their case, and that’s all. You should ask your attorney or the courthouse in advance how long you will actually have. You need to be efficient.
 
You need to know what is important when it comes to your case. Details of what happened during your marriage will not necessarily be relevant. For example, in some cases, infidelity will have no impact on spousal support, so there is no reason to discuss infidelity while you are discussing spousal support.
 
If you are asked a question by anyone in the courtroom, answer truthfully. Don’t lie, because often whatever you say will be part of a permanent record, so it can cause problems for you later.
 
When you are in court, there are a lot of emotions tied in. You may have adrenaline going, or get set off by something your ex says. You may find yourself flustered or have an urge to do something that will ultimately be unhelpful to you. Don’t say or do anything you might regret.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
 
Oct 11, 2017
In this episode, we’ll cover five things your attorney must be doing for you. If they are not doing these things, your case may be in trouble. We offer a course on managing your relationship with your attorney, because it is one of the most important aspects in your divorce. You should be concerned if your attorney is not doing any of these things:
 
  1. Your attorney does not return your phone calls, emails or messages quickly.
  2. Your attorney does not keep you informed on your case.
  3. Your attorney misses deadlines or waits until the last minute to file reports.
  4. Your attorney does not bill you regularly.
  5. Your attorney does not close the case when the divorce is over.
This is inexcusable. If you contact your divorce attorney and they do not reply within a day or two, it is a bad sign. You should be able to expect them to at least reply quickly that they have received your message, even if they are having a busy day in court or are on vacation. They may not be able to give you a detailed response immediately if it is something that they need to look into, but they should communicate that with you. If they do not, you may need to make a change.
 
This is closely connected to the point above. Your attorney should check in with you to let you know what has been going on with your case. There may be times when nothing is happening with your case, such as when you are waiting on a court date for a minor issue. However, if there are things going on, your attorney should keep you apprised of what is happening. Keep in mind that you also need to be proactive. Check in with your attorney to see if anything has happened lately.
 
This problem does not come up often, but when it does, it is a major issue. It can be hard to tell if this happens because the attorney is just bad with deadlines or if your case simply isn’t a priority for them. In a recent case we dealt with, the attorney repeatedly waited until 24 hours before a major deadline to submit key information to their client. The client then had to scramble to complete their part in time. It can put you in a bad position where you may have to miss deadlines to ensure you submit accurate information. 
 
You should be getting a bill every month, rather than a large bill after several months. This will let you know how much of your retainer has been spent, how much time has been spent on your case, and what progress has been made. The bills should be clear about what was done and how much time was spent doing each task.
 
It is very tempting to put the case aside when it has been settled. However, there are still several steps to complete the divorce: taking names off accounts, transferring assets, signing documents, and so on. You want the end of the divorce to go as smoothly as possible, and to be sure that all the small details are wrapped up. If your attorney forgets to tie up all of the loose ends, it can cause problems for you down the line.
 
If you find yourself in one of these situations, what do you do? First, make sure that you are staying on top of things yourself as much as possible. For example, check in with your attorney to see what has been going on with your case. However, if there are serious issues that keep coming up, it may be a sign that you need to look for a new attorney. These issues will probably not get better over time, and if the problems are severe, it can impact the rest of your life.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Oct 4, 2017
In this episode, we will discuss your involvement in the divorce process. You can have any number of experts helping you – lawyers, accountants, certified divorce financial analysts, valuation experts, social security experts, and so on. However, at the end of the day, it is your life and your divorce, so it’s up to you to stay on top of this process. Here are some of the major areas for you to be working on:
 
  1. Complete your statement of net worth or financial affidavit.
  2. Make a budget.
  3. Document everything.
  4. Complete your interrogatories and depositions quickly and truthfully.
  5. If you are using experts, help provide context.
  6. Participate in your settlement negotiation.
 
This is one of the first steps you will need to take in your divorce process. You will need to get your financial information together for your attorney and other experts. If you make a mistake on your financial affidavit, it’s your fault. Get help with this if you need it, because the court will use your financial affidavit to determine things like spousal support, child support, and the division of assets. You can find more resources for your financial affidavit in our store.
 
Make sure you put together a post-divorce budget. How much will you have to spend on housing when your divorce is over? What will your living expenses be? What will your car payment be? How much do you normally spend on groceries and eating out? What expenses do your kids have? Your life is going to change as a result of the divorce. You will probably have less income but more expenses after a divorce, so you need to plan for these things now. It will help you keep these things in mind during your settlement so you can negotiate for what you need.
 
In divorce, there will often be he-said-she-said disputes, but if you have documentation of what happened, you can submit that information to the court so there will be no question. The method of documentation will vary depending on what it is. For transactions, your bank record or credit card statement is good documentation. For property, you may want to take a picture. Document communication that you have with your spouse, especially if there’s anything negative, like a threatening text. Documentation will allow you to present your case in a much more compelling manner.
 
Often, you will have to complete interrogatories or give depositions during the divorce process. Just make sure you do so in a timely fashion. Even if your spouse is withholding information or lying, it doesn’t mean you should. Take the high ground and provide truthful, complete information. You don’t want it to look like you’re hiding things or being intentionally misleading.
 
Experts will need context to be able to help you. For example, if you go to a forensic accountant and ask them to search for assets, that isn’t very helpful. If you can provide more context, like a business that you own that had some suspicious transactions, tell them. Give them information to work with so they are better able to help you.
 
Clarify your priorities with your attorney. Make sure you are fighting for what you want, and that you aren’t losing out on the things you need. Clarifying your priorities will also help you avoid spending a lot of money on legal fees on things that aren’t important. It’s up to you to make your wishes known and be involved in all parts of the divorce process.
The more involved you are in the divorce process, the better. It will help reduce your legal fees and expert fees if you invest your own time. Eventually the divorce process will end, so you want to set yourself up to be in the best position possible.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Sep 27, 2017
“How much is my divorce going to cost?” 
 
This is one of the biggest questions people wonder about when going through a divorce. In this episode, we’ll talk about four factors that will affect the cost, some of which are out of your control.
 
  1. What you do during the process
  2. What your ex-spouse does during the process
  3. What your ex-spouse’s attorney does
  4. What the court does
 
You have control over your responses and decisions in the divorce process. If you are asked to complete a financial affidavit or if you are questioned in an interrogatory, you are responsible for answering truthfully. If you’re thinking about a settlement, you have to decide what issues are worth fighting for and what issues are worth letting go. This will have a significant impact on the cost of your divorce. Sometimes the smaller issues are worth letting go when you consider the big picture.
 
This is something that you cannot control, but it will certainly affect the cost of your divorce. You may find that your ex-spouse is not truthful or forthcoming during the divorce process. They may omit certain facts, or they may outright lie about what happened in the marriage or their finances. You will have to follow up on those issues, and may even need to hire additional experts like forensic accountants or private investigators. If this is the case, your divorce process will be longer and more expensive.
 
Earlier episodes of the podcast have discussed choosing an attorney, and why you should avoid an aggressive attorney. However, what if your spouse chooses to go that route? Aggressive attorneys lead to more unnecessary conflict, which adds to the expense of the divorce. If both your spouse and their attorney are disagreeable, you will have to spend time and money to deal with the additional conflict they create, even if you are ultimately in the right.
 
Courts are tricky. Every court has different rules and procedures. For example, in Dallas, there are three counties within twenty miles. Each county’s courts have different procedures. If the court needs a status update on your case, one county might just ask for an email, while another requires your attorney to come to the court in person to provide a written and verbal update. Your attorney still has to draft the letter, but now they also need to take the time to go to the court and speak with the judge. This will impact your legal fees as you are paying for your attorney’s time.
 
You will only have control over yourself. Unfortunately, you don’t have control over your ex-spouse, their attorney or the courts. However, you can make the best decisions possible for you given the circumstances. Focus on yourself, and making the best decisions possible with the information you have.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Sep 20, 2017
This episode will cover the options you have if you own a business with your soon-to-be ex-spouse. Under normal circumstances, businesses are very complicated. When you are getting divorced, it is even harder. Because this is such a complicated topic, this episode will not be able to go in-depth, but we will cover the options that you have for dealing with your business in a divorce:
 
  1. One spouse buys out the other.
  2. Both spouses continue to work in the business together.
  3. Walk away from the business entirely.
 
This is one of the most common options in the divorce world. One person retains ownership in the business, and the other no longer has any ownership, but they receive money for the value of their share. For example, let’s say you and your spouse co-own a gym, and your spouse wants to buy you out. How will that work? In a perfect world, you know the value of the gym, and you know the value of your shares. If the gym is worth $100,000, and you own half, your spouse will write you a check for $50,000. What happens if your spouse isn’t able to pay you $50,000 right now? It will become more complicated. 
 
They may offer to pay you $10,000 a year for the next five years. In that case, you may want to factor interest into the equation. You could also consider taking a portion of the profits each year. You may also be able to pull that $50,000 from another asset, like a retirement plan. There are options for how you structure a buyout. However, with most buyouts, it is difficult to determine exactly what the business is worth. There are experts who value businesses, but it is a somewhat subjective process.
 
This is not a very practical option. It can be difficult to continue to work with your ex-spouse. You may have to be around their new boyfriend or girlfriend. When work-related problems arise, the history that you have with them can amplify the conflict. This option is very difficult to execute, although people do sometimes attempt it.
 
You could sell the business or simply close up shop. There are a number of reasons to consider this option. If it is unfeasible to continue running the business, you may want to walk away. Owning a business can be a burden, and sometimes it is simpler to sell the business or close it.
 
What you decide will depend on what is best for you. Businesses are very complex. There are also legal considerations – is it an LLC, a C-Corp, an S-Corp? Who are the shareholders? What does your operating agreement say? What if investors or employees own part of the company? These are complicating factors that you will have to consider. You will need to understand the various considerations: taxes, employees, investors, etc. Make sure you handle all of these issues as cleanly as possible.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Sep 14, 2017
In an ideal world, it would take a minimal amount of time to go through a divorce. Unfortunately, in the real world, divorce is a slow process. Courts are packed, attorneys are slow, and the process often takes a year or two. However, it is possible to drag it out even longer, particularly if your spouse uses delay tactics. It can make your divorce more expensive and puts you in a much worse financial position. If your spouse is out to punish you, they can do so by dragging out the divorce.
 
This episode is about some tricks that your spouse may use to delay your divorce. Also listen to episode 147, where we discussed ways to combat some of these tricks.
 
Be prepared if your spouse uses any of these tactics against you:
  1. Your spouse fails to respond to discovery.
  2. Your spouse changes lawyers.
  3. Your spouse does not communicate at all.
  4. Your spouse brings needless motions.
 
Discovery is one of the most important parts of the divorce process. It is important to understand what each spouse’s financial picture looks like. In a perfect world, both parties would be forthcoming, share their financial information, and be truthful. Unfortunately, your spouse might refuse to share information, delaying the process. They might not complete essential information. They may even lie. If several months have gone by and you still do not know what your spouse’s finances look like, it becomes a real problem. If this happens to you, you can force your spouse to react with a motion to compel.
 
Your spouse has the right to be represented by an attorney of their choosing. However, they may fire their attorney right before important court dates, delaying the hearing. It may take a month or more to get a new hearing. On top of that, the new attorney’s fees may come out of marital funds, so it may cost you money.
 
When your spouse is non-responsive, it slows down the whole process. They may even leave the state or the country. This can be dealt with through the courts.
 
This comes up with aggressive attorneys. It can be very frustrating to be on the receiving end of these motions. It drives up the cost of the divorce and adds unnecessary conflict. They may request continual extensions to drag the process out as long as they can.
 
Tactics like these can make divorce slower and nastier than it needs to be. By keeping a clear head, regardless of what your spouse is doing, you can make the decisions that will be best for you. Eventually this process will be over, so all you can do is control your reactions to end up in the best place possible.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Sep 12, 2017

Why You Need a Prenuptial Agreement

You have met the person of your dreams, and you know that they are the one for you. However, now that you are getting married, all of your friends have told you that you might want to look into a prenuptial agreement before saying “I do.” The problem is that you are just not sure if you need one. After all, prenuptial agreements are only for the rich and famous, correct?

The truth is that prenuptial agreements are designed for everyone; not just those with money. In this article, you will learn exactly what a prenuptial agreement is, how they are used, and how they can be beneficial to you.

What is a Prenup?

Prenuptial agreements (also known as prenups or premarital agreements) are legal agreements that are designed to be prepared before you get married. A prenup basically outlines what property each person in the relationship financially gains, should the marriage end in a divorce.

Many people feel that if they do a prenup, they are telling the world that the marriage is not going to work. However, that could not be further from the truth.

Think of it this way: When you get insurance on your car, are you saying that you are inevitably going to get into an accident? No. You get the insurance to protect you in case an accident does happen.

Use this same rationale about getting a prenup. If the marriage ends, then the prenup will outline what you will walk away with. Or if you have assets going into the marriage, it will outline what is protected, and what your spouse will get. It is protection for you both.

What Can Be Included in a Prenup?

Each person will generally come into the marriage with their own belongings (separate property). Then there are those belongings that you accumulate while you are married (community property). Legally differentiating these kinds of property can make it easier on both of you, should the marriage not work out. In most cases, it saves arguments over many assets.

In addition, if you had a lot of assets coming into the marriage, a prenup is a great way to protect those assets. After all, you worked hard for those assets before your future spouse came along.

A prenup is also a great way to protect yourself if your partner has less-than-ideal credit, and a lot of debt coming into the marriage. Your prenup can state that your spouse assumes all responsibility and liability for any debts coming into the marriage. This way, creditors cannot come after you or seize your separate property. Again, it is like an insurance policy.

When it comes to your property, you do not want the state assuming control over determining who gets what, especially if you have separate assets. Therefore, use your prenup to put the power in your hands by stating ahead of time what each person will walk away from the marriage with.

Prenups are also a great way to list the expectations of each other during the marriage. So you can list whether one spouse will pay for the education of another, how much of a spending limit or allowance each person will get, and how access to bank accounts will be handled. If you have businesses coming into the marriage, then a prenup can be used to outline the separation and liability of those businesses.

What Cannot Be Included in a Prenup?

Now that you know some of the things that a prenup can do, let us talk about some of the things that cannot be included in this type of agreement.

Prenuptial agreements cannot dictate child-support amounts. Remember, child support is there to protect and provide for the child. The court is going to work in that child’s best interests, so they will determine what amount of child support, if any, will be received.

When it comes to alimony, most states will not allow a person to waive their right to alimony. Therefore, you will want to check your state’s guidelines, but generally, this waiver cannot be included in a prenup. In addition, prenups are a legal document, so they cannot contain anything that can be construed as illegal. In most cases, doing so would void out the prenup. Also, prenups cannot encourage someone to get a divorce.

In addition, prenups cannot be used to list things for your own personal gain, such as dictating if and when a child will be brought into the marriage, and who is responsible for taking care of that child. For instance, a prenup cannot be used to turn your spouse into your own personal housekeeper.

Remember, a prenup is designed to protect your assets; it is not meant to be used for personal gain.

Do Prenups Actually Work?

The answer is a resounding yes! The key to making any prenup effective is to make sure that you are clear and detailed when writing it. If the prenup is not clearly written and difficult to understand, then it can leave lots of room for interpretation, which is not something you want.

It should clearly outline what each person’s responsibilities and liabilities are regarding financial and property assets (before and during the marriage). Sure, things will change in the relationship over time, and there may be assets that were unpredicted when the prenup was written.

The key is to protect what you are coming into the marriage with, as well as outline the basic responsibilities of money and property in the marriage. Everything else can be handled by your divorce attorney, should that time come.

Can you afford to let the court decide if your spouse gets the house that you paid for before the marriage? What about half of the nest egg that you built up before the marriage, should it all end in a divorce?

Protect yourself, and get a prenup.

Sep 12, 2017

Filing your taxes at the end of the year is an arduous process, even under the best of circumstances. Most taxpayers are filled with trepidation at the very idea of filling out the proper forms, tallying up their total income, then having it reviewed by the Internal Revenue Service. However, the process is made even more complicated by unique circumstances (for instance, if you choose to include your child support as income. Since this form of income plays a large role in your finances, how do you plan to file?

If you are not sure whether your child support is taxable, it is time to begin sorting through the finer details required by the government during tax season. We will take a closer look at three important points that will leave you feeling more confident next tax season.

Child support is based on your income level.

When determining the appropriate level of child support, judges will often base the number on the income of the parents. While specific formulas and calculations vary from state to state, this general rule of thumb will predict the amount of child support you could receive. The income of both parents will typically be taken into account.

Because child support is usually based on your current income levels, it makes sense that many individuals and families believe that it is considered taxable income, but that is actually not the case.

Child support is not considered taxable income.

Child support is not actually factored into your gross income, and should not be added to the rest of the funds you earned that year while filing taxes with the IRS. If you know that your child support should not affect the levels of taxation at the end of the year, it gives you a little more financial security in the present moment, which allows you to more effectively plan and budget your child-support check each month. You should know exactly what the final number will be without having to account for a portion of it being owed to the federal government.

If you are the spouse who is ordered to pay child support, you should know that you will have no significant advantage. Child support is not considered a tax deduction for the party ordered to pay it. Therefore, you cannot deduct the overall amount of the payments from your taxable income when reporting your annual taxes to the IRS. You are required to report your income, including the entire money you paid out for child support to the federal government each year.

Paying child support does not entitle you to claim children as dependents.

Usually, the custodial parent has the right to claim children as dependents, as long as all of the tests from the IRS claiming exemptions are met. In order for the parent who pays the child support to claim them as dependents, additional steps must be followed. If you issue a check to help financially provide for them each month, it does not necessarily grant you the automatic ability to claim that tax credit.

In order for the noncustodial parent to claim children as dependents, they must file a Form 8332, which allows the custodial parent to release their rights to claim them as dependents on that year’s tax return. This form is known as a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Bear in mind that you must have a separate form for each child that you plan to claim as a dependent that year.

The custodial parent can also complete this form for a set number of years into the future. If you do so now, you can prevent hassles and headaches during each tax season. If the plan changes in the future, the custodial parent can also revoke the release of the claim to be an exemption—with a new form for each child.

Prepare for tax season early.

Filing your taxes when you receive child support does not have to be an arduous, time-consuming, and frustrating process, as many may be led to believe. It helps to plan early and know what your rights are, learn the proper process for filing your taxes to claim dependents, and accurately report your income.

If you have any questions regarding the finer details of filing your taxes following divorce, consider hiring a tax accountant to assist you. Search for a professional who is well-versed in handling situations that financially mirror your own. A good tax accountant can help you efficiently and correctly  complete your taxes, which will take away some of the pressure and burden that this time of year can bring about.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

Sep 12, 2017

Vocabulary is a significant part of the divorce process, and knowing what various terms mean can make a huge difference in your progress towards finalizing your divorce. Filing on the grounds of irreconcilable differences seems to be growing in popularity. If your attorney recommends this claim, do you know what it actually means?

Find out if filing for divorce based on irreconcilable differences is the right choice for you and your spouse by understanding the basics of these principles.

Irreconcilable differences means that your marriage cannot be saved.

Every marriage consists of two spouses, each of whom have their own unique habits, opinions, personalities, upbringings, all of which contribute to who they are as individual people. Those items not only contribute to their personality and character, but also can also add up to the breakdown of a marriage. Both spouses could be equally at fault for the end of the marriage in terms of dysfunctional communication.

Common issues that can lead to bigger struggles within the marriage and ultimately lead to irreconcilable differences include parenting, religion, money management, relationships with extended family members, and other day-to-day items. Irreconcilable differences means that the details of a successful, healthy future cannot be worked out between spouses, even with a serious attempt to do so, such as counseling or therapy.

Unfortunately, both spouses do not necessarily need to be on the same page regarding the likelihood of salvaging the relationship. Even if you feel like your marriage is unsustainable based on the issues you are both experiencing, your spouse does not need to agree with you in order to file for divorce due to irreconcilable differences. (This caveat may vary depending on state laws in your area.)

Irreconcilable differences means that no one is at fault.

Filing this status means that your marriage will end in a no-fault divorce, placing equal responsibility for the dissolution of your union on both spouses. Unlike other options for filing for divorce, irreconcilable differences does not place the blame solely on one spouse, or label them as being at fault for the breakup. A fault divorce can be far more difficult and time-consuming than a no-fault divorce, which means that filing with irreconcilable differences can often lead to faster divorce times, depending on your state’s laws.

A faster divorce has more than just the benefit of saving precious time when it comes to moving on with a newly single life. Particularly on behalf of a spouse who was wronged, it can save a significant amount of money on your attorney’s fees. A no-fault divorce allows attorneys to avoid the hefty time investment associated with carrying the burden of proof for whatever underlying reason ultimately contributed to the split, even if the cause was adultery or abuse.

State laws regarding irreconcilable differences will vary.

Keep in mind that each state has its own laws and could possibly even have different terminology for a divorce filed on the grounds of irreconcilable differences. Some states may refer to it simply as a no-fault divorce. Other states may offer irreconcilable differences as the only option for filling for divorce, therefore not allowing one spouse to place blame on the other, regardless of the specific circumstances.

Laws surrounding separation when filing for irreconcilable differences may vary as well. In many cases, these types of divorces can be completed quicker than others, so there will be different separation periods based on state laws before a couple can pursue finalization. While some states offer very quick turnaround times, others require lengthier waits before the courts will accept and finalize your divorce.

In many states, splitting up your assets will not be affected by whether you file for a fault or a no-fault divorce. They are typically divvied up according to the typical standards set for your area and the agreement or negotiation between the two of you, regardless of how you choose to file for your divorce. However, filing for a no-fault divorce (as opposed to a fault divorce) could affect items such as custody, alimony, and child support.

Understand the definition.

In short, filing for divorce on the grounds of irreconcilable differences means that you or your spouse does not believe that the marriage can be salvaged in a way that will result in a successful future together. The implications of filing for divorce based on irreconcilable differences can be far-reaching, including the potential for a faster, less costly divorce process. Be sure to understand all of the state laws for your area before deciding how to file for divorce. This decision could have long-term repercussions for your future, so be certain to do all of the necessary research in advance.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

Sep 12, 2017

Goalsetting is a critical component of having a successful divorce. Setting appropriate goals, even in the middle of your divorce, helps you identify where you are, versus where you would like to be. It gives you an excellent means to realistically evaluate both your present and future, and take the first few steps (be they hesitant or enthusiastic) towards your own success.

How do you go about setting the divorce goals that will lead you toward a successful future as a single individual? Every decision you make regarding your divorce should be made with your goals in mind. As such, it is important to ensure that you know the best guidelines for setting realistic goals for yourself. The following three guidelines will give the building blocks for setting the best goals for your own future.

1. Decide what you want out of life.

Do not allow yourself to get swept up in the minutiae of daily responsibilities, or get to the finish line as quickly as possible. Instead, keep your mind focused on what you want your future to actually look like. While it may seem nearly impossible in the midst of your emotional turmoil, take time to step back from the stress and envision your ideal future.

You should consider each aspect of your life, and take time to consider these kinds of questions:

  • What type of custody arrangement do you want with your spouse?
  • What type of financial supports or arrangements will you need to make, in order to achieve a comfortable lifestyle for yourself and your children?  
  • How much of your joint debt can you afford to assume? How much are you willing to help pay as the future moves forward?
  • What will retirement and investment savings look like as a newly single individual?
     
    Ultimately, you want to consider the real question at hand as you set goals for yourself: If you could live your life in any way that you choose, what would it look like in light of your pending divorce? Deciding what is important to you now can help you begin crafting that life on your own.

2. Create actionable steps for your goals.

Once you decide exactly what you are hoping to achieve, it is time to start putting actual steps in place to reach success. Select a few actionable steps that would allow you to measure progress towards your goals. They could be relatively simple things, or long-term plans broken into several steps. They could be things such as obtaining a job or a better-paying position, setting a stricter budget, reevaluating your retirement savings, or doing something fun with your children over the weekend. Putting a few steps in place (no matter how basic they may seem) gives you the ability to work toward your goals without feeling defeated during the process.

Experts recommend making goals using the SMART acronym; each goal should be Specific, Measurable, Attainable, Relevant, and Timely. Each step that you put in place should correspond to all five of those categories in order to move you that much closer to your overarching goal for long-term success and stability.

In particular, consider setting a deadline on your specific goals, which will force you to act on your progress within a set period of time. This plan is designed to motivate you to achieve progress faster than you may otherwise be able to.

3. Have some flexibility in your goals.

Understand that sometimes things do not work out the way you plan for them to. Be willing to maintain some flexibility within your plan if things go amiss. Many individuals will want to set a few overarching goals that they would like to achieve within their divorce, and acknowledge that there may be multiple ways to achieve the same outcome. The goals may look different in your day-to-day life than you imagined, so your flexibility can come into play.

You may also want to be flexible about the fact that the goals and steps you set for yourself and your family could be more time-consuming than you originally anticipated. Therefore, be patient with the process while you continue to set measurable, attainable steps toward the goals you set for yourself.

Summary

Setting goals for yourself is crucial to helping you determine which decisions within your divorce are in your best interests for the future. Each decision you and your spouse make regarding your split will have some repercussions for your future as an individual. Your goals can help keep you focus on the bigger picture, instead of getting caught up in the details.

Keep an open mind in both your approach to each goal and the results that you achieve along the way. You may find that your goals shift as you get further into the divorce process and begin to get a better outlook at what single life will look like for you. Revising goals that no longer serve you well is acceptable, and you will want to be flexible and open to this possibility.

Goalsetting can certainly be a stressful process, which forces you to consider where you currently are, compared to where you would like to be. However, with Specific, Measurable, Attainable, Relevant, and Timely goals in place, you can move toward your future in confidence, apart from your spouse.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

Sep 12, 2017
This episode will cover five easily-avoidable mistakes you may make during a divorce.
 
  1. Do not get divorced without getting legal advice.
  2. Do not fail to verify budgets and statements of net worth.
  3. Do not assume your attorney will take care of everything.
  4. Do not try to get through the divorce without a support system.
  5. Do not assume you can change your divorce settlement later.
 
A lot of people think they can do a divorce themselves. Even if you are savvy, and your spouse is reasonable, you should still consult a lawyer. You may be able to hammer out 95% of the details on your own, but you want to make sure that you aren’t missing any steps. It can save a lot of time and headache later on.
 
This goes for both you and your spouse. You cannot guess on your personal statement of net worth or financial affidavit. Find exact, verifiable numbers. If you are incorrect, you could be accused of intentionally misrepresenting your finances, which can damage your credibility. Conversely, if your spouse is manipulating numbers, you will want to address it.
 
You are in charge of your divorce. It’s your life and your future. Your attorney is there to help you with the legal aspects of your divorce: navigating your local laws and formalizing a legal agreement. They are not there to review your financial information or calculate your budget – a certified divorce financial analyst can help you with those things. Your attorney is instrumental to the process, but you are ultimately in charge.
 
One of the biggest issues in divorce is the emotional component. You should have a support system so that you don’t go through it alone. That may mean finding a therapist, going to a support group, or confiding in close friends. Do not try to keep your emotions bottled up, because they may affect decisions you make during the divorce that will impact the rest of your life.
 
Many people think they can make changes later on, but that is not the case. There are limited circumstances where you can re-open certain issues, but it will always be an uphill battle to do so. The legal fees will be expensive, and it will also re-open emotional issues. Make sure that your settlement is right the first time. Sometimes it is helpful to have an outside opinion to review your case before you settle to make sure you are getting a fair deal.
 
Avoiding these mistakes will put you in a strong position to be successful for your life after divorce.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
Sep 7, 2017
This episode of the Divorce and Your Money Show is about child support. This one of the most essential issues of divorce when children are involved. We will answer some basic questions about child support in this episode.
 
What is child support? 
It is a mandatory payment that occurs during divorce whenever there are minor children present (under the age of 18 or 21, depending upon your state). Child support lasts until the child is an adult. The only exceptions are some children with disabilities who require support into adulthood. From a tax perspective, child support is not taxable income to the person receiving it, and is not tax-deductible for the person paying it. This differs from spousal support – the person who receives spousal support pays taxes, and the person paying it receives a tax deduction.
 
Who gets child support? 
The parent who has primary custody of the children receives child support. In the case of 50/50 child custody arrangements, there is usually one parent who is considered the guardian or custodial parent. The guardian still receives some child support in 50/50 custody arrangements, albeit less than if they had primary custody.
 
Why does child support exist? 
Child support laws were made to ensure that children grow up with all of their needs taken care, hopefully living a similar lifestyle to what they were before the divorce. These laws were created when our society was different – men were the primary income-earners, and women stayed at home and raised the children. If a couple divorced, the woman was often left to raise the children alone, with little job skills to support her family. Before these laws existed, the husband could run off and not be required to pay anything, leaving his children in poverty. These laws exist to ensure children are taken care of.
 
How is child support calculated? 
Every state has specific rules on child support, so you can search online for your state + “child support calculator.” In general, the calculation depends on the spouses’ income levels, how many children there are, and sometimes other factors. These calculations usually don’t allow much leeway, except at high income levels. The laws may dictate a certain percentage of earnings be paid up until a certain income level, say $200,000. If your income exceeds that limit, your child support will be determined either in negotiations with your spouse or before a judge. However, for most people, the guidelines will be pretty firm and you have to abide by those calculations. It isn’t an area that you should fight over, because it’s not going to be flexible.
 
How is child support paid? 
Usually, child support is paid directly from one spouse to the other on a monthly basis. Some people choose to go through an intermediary. If you don’t pay your child support, your employer may garnish your wages. Likewise, if your ex-spouse is not making child support payments, you can file a claim with their employer to garnish their wages.
 
What if you are concerned your child support payments aren’t being used for the children? 
Sometimes, the ex-spouse treats child support like free money that they can use for whatever they want. If this is the case, consult your attorney. There are remedies to ensure child support is being used for the kids. If you receive child support, make sure that full amount goes towards the children’s food, clothes, schooling, etc. Document all of your child support expenses so that if someone were to ask at any point in the future, you could show how much you spent, and on what, in a given month. It can come back on you later if you aren’t clearly documenting everything.
 
This is an important topic if you have minor children when you get divorced. Make sure you know the basics of child support in your state and what to expect.
 
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Sep 6, 2017
This episode of the Divorce and Your Money Show discusses the reasons to consider selling your house when getting divorced. Many people come into the divorce process with strong preferences on this issue because they have an emotional attachment to their house. This episode will help you consider all sides of the issue. It’s a good idea to think about the financial side, because your house is one of your biggest assets. Here are four reasons to consider not keeping the house.
  1. The house is a burden.
  2. Refinancing is complicated.
  3. Homes are expensive to maintain.
  4. You may end up worse off than you would have if you sold the house.
After divorce, your income as a single person will be lower than it was as a couple, but your expenses will be similar. Given this reality, can you really afford to keep the house? A larger percentage of your income will be going towards your home payment. If your home payment is very low or you live very frugally, it may be possible, but for the vast majority of people, it is not a good situation to be in. It may not be financially feasible for you to stay.  
 
If you have two names on the mortgage, it is difficult to take one person’s name off. From the lender’s perspective, they will want both people to be liable to make sure that payments continue to be made. Since your income will now be lower, it will be hard to obtain refinancing.
 
A home is more than just a mortgage. There are property taxes, utilities, maintenance, general upkeep, repairs, etc. Are you able to afford all of the expenses?
 
Sometimes, people want to keep the house to give their kids stability. However, if you are struggling to make payments, will your kids really be better off? Selling the house and downgrading can afford you more financial stability and flexibility. If your home is taking away from your income, it can put you in a tough position. It may do more harm than good.
 
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Aug 31, 2017
When does spousal support end? Whether you are going to be paying or receiving it, it is important to know. Most of the time, spousal support will not last forever. State laws vary, but they are relatively consistent about what conditions cause spousal support to end. It should be written in your settlement agreement; if not, consider adding these conditions in.
 
Here are the five cases where spousal support ends:
 
1) When the recipient of spousal support dies. If the person receiving spousal support passes away, the support ends. It will not be passed along to a child or another party.
 
2) When the payer of spousal support dies. If the person paying support dies, support can end. That support may be essential to your livelihood, so you can find yourself in a very difficult position if you were receiving support. Two previous episodes of this podcast (58 and 91) discuss life insurance to cover any remaining support obligations. This is highly recommended for anyone who’s receiving spousal support.
 
3) When the recipient remarries or cohabitates with another person. If you are receiving support and you marry a new person, the support will end. In some cases, people try to get around this by living with a partner without marrying them. However, divorce settlements typically specify that if you live with a new partner for a certain amount of time, your support will end. This can be as little as 2 or 3 months or as long as a year of cohabitation. You may wonder how your ex-spouse will know if you are cohabitating. In some cases, the ex will hire a private investigator to find out.
 
4) When the payer of spousal support retires. When someone retires, they usually will not continue to pay spousal support. However, there are cases where you can end up paying support even after you retire. You can negotiate this in your settlement agreement, so think about this in advance.
 
5) When there has been a substantial change in financial situation for either party. If the person paying support loses their job for a substantial period of time or if they become disabled, they may be able to renegotiate spousal support. Conversely, if the person receiving spousal support suddenly receives a large inheritance, their ex may request renegotiation.
 
For many of these cases, you need to still know what is going on in your spouse’s life to some extent in order to know if you could renegotiate spousal support. You may not have any desire to communicate with your ex-spouse again, but you may want to informally keep up with what is going on in their life through acquaintances. If possible, it’s helpful to know if any conditions change that might affect the support obligations.
 
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Aug 29, 2017
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In this episode, we will discuss a common misconception. Sometimes, people will have an urge to punish their soon-to-be-ex-spouse in the divorce, so they look for the most aggressive attorney that they can find. Attorneys know that many people have that mentality, so some of them are marketing heavily to you in search engines. They may be paying $25 or $50 per click when you search for aggressive divorce attorneys, just for you to just visit their website. They want to persuade you to hire a tough attorney, especially when you are angry, so they can convince you that you need a fighter.
 
However, that might not be in your best interests. In some circumstances, an aggressive attorney may make sense, but for most people, it does not. Let’s face it – most people want to get divorce over as quickly as possible, with a fair result, and at a reasonable cost. Most of you just want to get what is fair, without bankrupting yourself in the process. Even if you hate your ex-spouse, you probably just want a reasonable result and to move on with the rest of your life.
 
Here are four reasons why you might want to avoid an aggressive attorney:
 
1) The divorce will be much more expensive. An aggressive attorney is going to be a lot more expensive because every issue becomes a big fight. You will always be on the offensive, submitting motions, and hiring experts. The attorney’s billable hours will pile up. What could have been a $5,000 - $10,000 divorce can become a $100,000 divorce very quickly. Your attorney will goad you into more fights, creating more expense. You may end up spending $5,000 fighting over a $200 set of silverware.
 
On top of that, you will not be able to get to a settlement very easily. Aggressive attorneys want to fight it out, drag your ex through the mud, and punish them. That punishment comes at your expense – selling your cars, emptying your retirement accounts, and double-mortgaging your home.
 
2) Judges hate aggressive attorneys. The probability that you will be settling your divorce is lower with an aggressive attorney, so you will end up spending more time in front of a judge. Judges have a good sense of the local attorneys, an over-stuffed docket, and they don’t want to spend a lot of time on any one case. This is why many judges don’t like aggressive attorneys, and find them an annoyance.
 
Picture a yappy chihuahua barking at a stranger – all bite and no bark – versus a relaxed chocolate lab. An aggressive attorney is like a chihuahua, making lots of noise about small things that don’t really matter. This is how many judges feel about aggressive attorneys. Every little thing becomes a big issue and a waste of time. It frustrates judges, and they often treat the client as an extension of that attorney. If you have an attorney that the judge likes, you can end up with a more favorable outcome.
 
3) Aggressive does not mean effective, and it does not mean tough. My favorite attorneys are pretty low-key, but they are experienced, sharp, and devastatingly effective. They may never raise their voice or show much emotion, but they crush some of the more aggressive attorneys with their tenacity. You do not need an aggressive attorney to get a good result. One of my favorite sayings is, “An empty can rattles the loudest.” There’s nothing actually in the can. Many aggressive attorneys are all bark and no bite, and don’t have a lot of substance to them. A skilled attorney who doesn’t have an aggressive style usually wins the day.
 
4) It is emotionally draining. Divorce is already tough enough, but when you add an aggressive attorney or two to the mix, it creates an all-out war. Aggressive attorneys have a tendency to misconstrue the truth. They sometimes come out with wild accusations, adding conflict to the process, and it ultimately is not helpful to their case. It may feel good at first to get fired up and try to punish your spouse, but this is ultimately a business deal – splitting up your assets, debt and property. Adding emotion to the process is not helpful. Your objective should be to put yourself in the best position possible for the rest of your life after the divorce.
 
For most people, aggressive attorneys are not a good choice. They are expensive, judges don’t like them, and it doesn’t necessarily mean you will end up in a better place. To be fair, some situations can call for an aggressive attorney. For example, if you have a custody dispute and there is a serious mental issue, a history of abuse, or an alcoholic spouse, then an aggressive attorney might be worth considering. However, for most people, it is not the best choice.
 
Before you go, visit divorceandyourmoney.com:
1) Sign up for the email list to get exclusive tips you won’t find anywhere else.
2) To get access to the best divorce resources in the United States, check out the store here.
3) Get personalized help. Learn about coaching services here.
 
Thank you for listening!
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