11 Mar Even billionaires are concerned about the “costs” of divorce

Billionaire T. Boone Pickens was recently divorced from his 4th wife and chose collaborative practice to settle his divorce.

For the whole story, go to http://www.bizjournals.com/dallas/blog/2013/03/t-boone-pickens-on-how-to-save.html?ana=e_abd&u=rk2Eh9uif4Sgj7UM9KhZGpj2jD7&goback=%2Egde_2936590_member_219548098

“The collaborative approach saves both money and emotional wear and tear on families.” Pickens said.

Should non billionaire couples consider the costs of divorce before choosing how they divorce?  Couples should do their research about different processes and the costs of each process.

Creating a  separation agreement with the help of a mediator means you share the cost of one mediator.   If you are choosing the collaborative law approach, you are each working with your own lawyers however,  much of the work can be taken on with the help of  other collaborative team members.

If you have a family professional, rather than your own lawyers,  they help to create and draft a parenting plan.  This is  a shared cost (usually at a lower hourly rate than lawyers).  If you use the assistance of a divorce financial professional, like a Certified Divorce Financial Analyst (also usually at a lower hourly rate than lawyers) to help with gathering the financial information, you’re sharing that cost (and the work too as there is usually one spouse that has handled all the family finances and is better at accessing all the financial statements and documents).

Billionaires become billionaires not only because they make millions… they also recognize when they have the opportunity to save a million or two.

01 Jun Financial Homework in Grey Divorce

When you’re considering divorce in your 50’s,    a big concern is the financial impact for you and your spouse at this stage of your lives.  If you delayed having children, they may be young and child support payments may derail retirement plans/savings. You may still be faced with funding post secondary education. You may be supporting aging parents. One spouse may already be retired.

Part of divorce is dissolving your family’s joint financial relationship. This can’t be done unless you know the total financial picture. All the facts need to be on the table so you can determine how best to separate your finances allowing both of you to make the best choices of how you will move forward on your own.

This means doing some homework in advance.  As a start, you need to find and prepare the following documents:

  • Tax returns from most recent tax years
  • Recent paystubs that show payroll deductions
  • List of personal property  such as cars, boats, valuable art, jewellery, antiques
  • Recent statement from Assets:
    • Bank accounts
    • Investment accounts including open, RRSP, RRIF accounts
    • Education savings Accounts
    • Other assets such as Stock options, other Company awards
    • Company Pension
  • Recent statements of Debts: Mortgage, Line of Credit both personal and joint, Car loans
  • Miscellaneous Info: Life insurance, Medical benefit plans
  • Business Ownership details

Doing your homework takes time.  Documents may be hard to locate. You may have to request copies from the bank or your employer. You may not have looked at some of these documents for a very long time.

You can hire a divorce financial professional to “tutor” you with your homework. They can help explain and organize it all so everyone is ready to start.

31 May Discussing “grey divorce” June 6th

Our popular “Divorce Talks” is coming up on June 6th… We’ll be discussing all the myths surrounding separation in the growing trend of “grey divorce”. If you or someone you know is contemplating divorce, have them join us. If you have clients that may find themselves in this situation, join in the conversation for more info, go to http://www.eventbrite.com/event/3496932419

15 May Financial stability is top of mind in grey divorce

From Marion Korn’s blog http://marionkorn.com/index.php/financial-stability-is-top-of-mind-in-grey-divorce/

At the time in life when incomes start to shrink and retirement is approaching, divorce costs are likely not in the budget.  A lifetime of planning for the future can be deeply undermined if emotions get the better of good sense.

Divorce among couples in their 50’s and 60’s is on the rise.  Whatever the cause, the effect is that a new strategic financial plan is needed.  Additional living costs will be a certain result.  And postponed retirement may be another.

Luckily there are good options that can control the cost of settling all the details in a “late in life” divorce.  Gone are the days when divorce meant court and the delays and expense that entailed.

Collaborative Practice (also called Collaborative Law) is a popular choice among separating couples who want to work out their futures with respect for one another.  They also recognize that preservation of their assets is key in ensuring that they can both look forward to financial stability.

The collaborative process is about management.  The well trained lawyers manage the negotiations by making sure their clients are well informed and that they have the time they need to fully understand the effect of the choices they make.

The financial outcomes are also managed by the financial professionals who can translate the clients’ thoughts and choices about their futures into numbers that illustrate the realities.

Managing the costs of separation is the first step in re-establishing a plan for the future.

Call Marion Korn at  416-915-7000 for more information about Collaborative Practice and how this approach is well suited for late in life divorce.

12 Mar LIVE Divorce Talks… April 12th at 6:30pm

If you are considering a divorce, join Marion and myself for a conversation about the things that matter the most when thinking about separation and divorce – kids, finances and your future.  Our goal is to give you the answers you need in a safe and comfortable setting.  If you or someone you know is contemplating separation, join us to learn how to move from where you are today to a plan that works best for you and your family

Our next Divorce Talks session will take place on Thursday April 12th, 2012 6:30 to 8pm.

Fee: $25 (inclusive of HST)

Location: 79 Shuter St. Toronto, ON M5B 1B3

Refreshments will be served. 

For more information or to register please contact us at 647-341-9040 or   by e-mail at info@mutualsolutions.ca

Please register by Friday April 6th, 2012 at http://www.eventbrite.com/event/2544127554

01 Feb Prepare an After Divorce Budget… NOW!!!

If you are facing divorce, you have  a myriad of documents and information to collect and sort. If you haven’t paid attention to the family finances, you may not be aware of what it takes to run the household now. For many, learning about what you spent when you were together is a challenging and difficult task. It’s eye opening for most. What you need to know is what your costs of living will be after the divorce. Some people’s incomes drop drastically after divorce. It’s best you be prepared by building a budget now instead of being hit over the head with bills you can’t pay.

You will have to estimate some expenses but it is important so that you can have some idea of what you will need to survive in your new life.  Where to start? A financial planner specializing in divorce can help you create your “after divorce” budget. They are trained and have the experience to anticipate situations and expenses you may not have considered or included. They can create projections to estimate such things as future mortgage payments, taxes owing on spousal support, future education costs, health benefit plans, etc. 

You need to know what you will need financially in order to evaluate your settlement options. It is also important to know your future needs because it will influence how you negotiate your settlement.

25 Jan GETTING OLDER- GETTING DIVORCED

Here are some interesting statistics about the increase in divorces among long term partners.  According to Statistics Canada, as the Canadian divorce rate fell by more than 11 per cent between 1993 and 2003, it rose among couples over the age of 40.  In  the 50-to-54 age group, divorce rates increased to 34 per cent. The rate of divorce for Baby boomers between the ages of 55 and 59, increased by 47.8 per cent. The numbers fell slightly for those in their 60s, but still stood at 31.7 per cent. Among seniors, it dropped remarkably to 9.2 per cent.

Whatever the underlying reasons for this trend, there is no question that the event itself can be confusing to grown children and extended family.  At a time when couples would be preparing for retirement, the unexpected costs of divorcing can also have a major financial impact.

Managing the costs of divorce at this age is an important aspect of planning for the future.  The reality of covering the additional expenses of having 2 homes is reason enough to make sure that cost of the separation is handled responsibly. 

Both mediation and Collaborative Practice offer older couples an approach that allows them to make decisions about costs and provides the opportunity to plan for their separate financial futures together.  Financial projections that give information about the impact of the today’s decisions on tomorrow’s finances are a value added service.

13 Jan Divorce in Recession

Divorce is a financial strain on your family because it divides you and your spouse’s cumulative assets. In this economy, where assets are quickly turning into debts, it is critical to understand the financial consequences of a divorce and how to make the most out of its aftermath. A divorce divides one family unit into two separate units. When one spouse moves out, there will be one more mortgage or rental payment to make. Having 2 separate families also means twice the living expenses, including, but not limited to: health insurance, car payments, and all the children’s needs in the separate households.

Debt loads start to grow when: 

  • you have been living beyond your means even before considering divorce 
  • one of you have lost your job due to downsizing and have been depleting savings to cover living expenses 
  • you may be already living apart and dealing with additional expenses of second home

If you have accumulated substantial debt and are facing divorce, you will be dealing with how to divide the debt, rather than the equity. In the unstable economy, where your stocks, RRSPs, savings, and assets are quickly eroding, use the combined services of a certified divorce financial analyst and mediator to focus on a solution that works for both spouses.

06 Jan What the Supreme Court of Canada has to say about making changes to spousal support

This article explains what the Supreme Court of Canada has said about making changes to spousal support in the years after an agreement has been signed.  If you want to be able to make changes in the future, then your agreement today should say so- and it should also say what future events would be considered if one person or both want to make changes. 

http://www.theglobeandmail.com/news/national/supreme-court-takes-firm-stand-on-spousal-support-payments/article2279213/

The more open the negotiations in the first place, the more likely you are to have the conversation about the future “what-if’s”.  Both mediation and Collaborative Practice encourage these conversations.  For more information, go to www.mutualsolutions45.com .

09 Dec Planning to Separate after the Holidays?

Many families postpone their separation until after the holidays.  There are things that can be done in preparation for that change while you have the time to research online or make enquiries during your time off from work.

Here are some tips:

1.    Start collecting financial documents like credit card and bank statements, investment and RRSP statements, mortgage and property tax statements, etc.  Prepare a file so that you both have what you will need.

2.    You can check your credit rating.  In that way, you will have the same information as the bank when you start to negotiate lines of credit or changes to your accounts or even your mortgage.

3.    Work from a budget for the holidays.  In the event that you are using joint credit cards, it is easier to agree on who will be responsible for costs when you are planning a purchase than when you are paying for it.

4.    Find time to research your options.  Such things as:

  • a survey of the cost of alternate accommodation in your area
  • the dates of the school holidays for the upcoming year
  • local divorce professionals and their approaches to separation and divorce
  • local mortgage brokers
  • local real estate agents

Remember that your involvement in your separation and divorce is the most important factor in reaching an outcome that works for everyone.