Listen below to my interview with Ari Kaplan, host of “Family on Air” on 96.7 FM Zoomer Radio where we discussed the unique financial concerns couples face when contemplating “grey divorce” and our book When Harry left Sally.
I believe one of the most important roles I have, as a Certified Divorce Financial Analyst (CDFA) is providing a reality check for my clients before , during and after divorce. I am pragmatic and not judgmental. I take the words in settlement agreements and turn them into numbers. .
Firstly, I do this by having a systematic approach for pulling together the financial numbers and information that they need to start separation discussions whether the are working in mediation, collaboration or traditional negotiations.
Secondly, I’m focused on finding solutions that work in both the short and long term. I create projections based on clients goals and possible settlement options , whether that be proceeds from sale of their house , impact of varies duration and levels of support, impact of future income and savings. These projections educate and show clients the future implications of what is being proposed. They also show the the impact of other decisions clients have control .
I had a client who was the main breadwinner of the family. She went back to school to upgrade her skills when her husband was downsized from his corporate job. She found a very well paying position and has had a number of promotions since starting at her company. Her husband found it difficult to get back into the workforce in his previous role. Discouraged, he started a small consulting practice but wasn’t having much success in getting clients. When they decided to separate, her income was substantially more than his. She was very resentful of having to make Spousal Support payments to her husband. This looked like it was going to stall the settlement negotiations. I worked with her to understand her current & future spending, her future income and have her see the impact of various levels of support. I helped her set priorities going forward. Once she could see into her financial future, she agreed to a spousal support payment schedule she and her spouse could live with as she now felt confident about her own financial future.
Divorce is not only the ending of a marriage but it involves the unbundling of the business part of the relationship .. separating assets.. the house, retirement savings, pensions, dealing with debts, future income, future financial goals. If you are facing divorce.you are likely beginning to understand that there is a legal, emotional and financial aspect of divorce. You should reflect on where you’re at and prioritize what professional help you need most. You may need to get emotional support from a counsellor or therapist to prepare you emotionally and financial advice from a divorce financial consultant who will provide the financial guidance to have you ready to begin legal separation discussions
If any one of the situations listed below is your case, you have good reason to get some expert financial advice; if you face two or more, going without seeking advice, is risky.
Personal
Property
Your spouse
Divorce, for most couples, is an unexpected event as a whole. Couples need to be prepared for unexpected financial changes and challenges they will face as divorce is the breakup of not only a family unit but the breakup of an economic unit as well. Each spouse needs to look at their finances from both quantitative and qualitative viewpoints to understand what’s important to them. In other words, divorcing couples need to take into account everything from balancing a new budget to maintaining a certain quality of life. Knowing this information will allow them to better assess how they can move forward on their own.
Here’s a short list of financial questions divorcing couples should consider:
•Do they have a “divorce” budget? How will they pay for the professionals they may need to work with?
•Have they thought about how bills /expenses will be paid until a final agreement is reached?
•What will it cost to maintain two households rather than one?
•Have they considered renting rather than purchasing another home?
•Have they reviewed all of their children’s activities and prioritized what they can do and what they can afford?
•Will the stay-at-home spouse need to consider going to work full-time or part-time?
•If there is a business, does the business need to be sold?
•Is there existing debt (mortgage, lines of credit)? Have they thought about how this debt will be managed? Will they need to take on additional debt to fund future payouts?
•How much will the divorce affect retirement plans?
When working with a collaborative team that includes a financial neutral during your divorce, questions like these ones are often raised and then answered. This allows couples to make informed decisions about their financial plans and futures.
Our book “When Harry Left Sally or Sally left Harry – FInding your way through Grey Divorce” has be published. It will be available for sale at www.whenharryleftsally.ca early January 2014 . You’ll be able to find the EBOOK version on AMAZON, ITUNES and KOBO.
The book provides insights on what to expect of a “Grey Divorce” or divorce that occurs late in life. We have taken our real life experiences and give couples splitting up an idea of the financial and personal situations that await them. The books sets out to reassure and advise older couples going through divorce.
I’ll post the official launch details shortly.
There was a recent article in the GLOBE AND MAIL about rising costs of household expenses. You may be surprised with some of the findings.
https://secure.globeadvisor.com/servlet/ArticleNews/story/gam/20130815/GICARRICK0814ATL
Do you know that food purchased from stores spending was down 1.8% but food purchased from restaurants was up 3.6% from a year ago? Landline telephone services were down almost 6% while cellphone pager and text messaging services were up over 10%. Clothing and accessories were down almost 3%.. is that a result of more competitive pricing with US retailers coming to Canada?
The largest increase was surprisingly in pet expenses … may not reflective in higher food prices but rather additional health care bills as people to improve and extend the life of their dear pets.
This is all good information. It’s really important information to have if you are facing divorce and need to see how you’ll manage once you’re on your own.
Check out Ellen Roseman’s Article Separation’s high cost: Spending cut to the bone http://www.moneyville.ca/article/1270309 (from yesterday’s Toronto Star online) in which she interviews me about my role as a certified divorce financial planner and my advice for separating couples.
It looks like you’re separating. One of the first steps you’ll be required to do is pull together your financial information … assets, debts, income, expenses.
Where to start? What is required? Where will it be used?
Join us for an information session that will have you learn:
What specific information you need t
DATE: Wed. November 14th, 2012
TIME: 6:00 to 7:30 PM
LOCATION: 79 Shuter St. Suite 200 Toronto
Traditionally, autumn is a boom season for divorce, particularly for couples, who wait out the summer at the cottage before returning home to cut their marital ties. Many couples considering splitting decide to wait until after the holidays to break the news to their children. How are these parents going to approach their separation or divorce – and how will it affect their children?
Obviously school-year separations can be difficult for school-age children. Parents need to bend over backwards to minimize the changes and transitions in their child’s life so as to keep school-related schedules, after-school activities, playtime with friends and other routines as much the same as possible.
Parents with university aged children face the additional burden of having kids who are moving away from home. The added stress of dealing with ever increasing tuition costs and related school expenses makes divorce at this stage more complex.
As couples work through their separation agreement, they should be aware of the many financial issues that affect them and their children beyond the traditional items of child support.
They should be considering such things as:
Sending kids off to university is an exciting and challenging time for both students and parents alike. Dealing with divorce at this stage in your family’s life adds additional challenges. If you need help sorting through the financial issues around these issues, we may be in the position to help.
Many of the women coming to see me are concerned about their ability to negotiate their settlement when separating. They believe they know very little when it comes to the “family finances”.
In a recent poll conducted by Investors Group, 58% of those women surveyed said they were more involved in household budgeting than their partners while 44% feel more involved than their partner in investment and retirement planning decisions.
Understanding household budgets.. where money is being spent now is integral in understanding the implications of any settlement being considered. It’s not just how much is coming in by the way of support payments but how much you spend. Budgeting is a measurement of lifestyle. If your goal is to maintain a “similar lifestyle” after divorce, having a good understanding of what you life cost before and after divorce is key in good negotiations when dealing with divorce.
Give yourself credit ladies.. you know more than you think you do!!