11 Mar Divorce Costs Followup

As a followup to my previous blog today take a look at this article from the  BBC and UK about the rising costs of divorce.    It quotes a report by the Legal Ombudsman for England and Wales showed complaints by clients in divorce and family law were higher than in any other category.

http://www.bbc.co.uk/news/uk-21611496

Have you gone through divorce recently? What do  you think of the costs involved?   At the end of it all, did you get value for what you paid for?

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.

11 Jan Retiring and Divorcing at the same time?

Thought your retirement would be like this?

Thought your retirement would be like this?

But instead it turned out more like this?

But instead it turned out more like this?

The baby-boom generation is showing that it ‘s never too late to consider divorce.  As our life span extends,  people in their fifties and sixties with better health expectations figure they have a number of good years left. Why not live them to the fullest?  That may mean ending their long term marriage and going it alone.

The problem with getting divorced late in life, is that most people find it hard enough to save for retirement and don’t imagine living off of just half of their savings, whatever they may be.

If a couple had money in the marriage, there may be enough  money to go around after divorce.  The challenge is for normal middle-class couples who just scraped by.  Or those couples who lived beyond their means.  When they try to make their house and retirement assets cover two households instead of one, there’s simply not enough to go around.  And they’re not likely to go back to work.  They may be expecting to do the things they never allowed themselves to do while they were married like join a club, travel etc.

When people are relying on a pension or savings, there’s never going to be enough to duplicate the marital lifestyle.  If you’re divorcing at  55 or 60, it may be too late to go back to work or  too late to recover financially.

If you didn’t consider that divorce would be par t of your  retirement plan,  you may want to  work with a divorce team that consists of  both legal and financial professionals. They are there to help you navigate this difficult time, both in a legal and financial capacity.

Image courtesy of Ambro at FreeDigitalPhotos.net <http://www.freedigitalphotos.net

15 Oct Divorce Settlement Options

When it comes to the financial aspects of divorce, it not just lack of understanding of the family’s finances, it’s the lack of information about a family’s financial picture that tends to make good financial decisions challenging  for couples when they decide to divorce.

One spouse may  know more because they managed the family investments or were in charge of paying the bills.  After all, the couple may have thought it would be a waste of time for both to balance the check book twice every month so one takes the responsibility and tends to keep doing it throughout the marriage.

Important decisions to be made when negotiating your settlement need high quality information from which to judge the options. The spouse with less knowledge may spend more time collecting documents,  working on past and go forward budgets. This is the most important part of divorce financial planning.   Decisions regarding finances are based on choosing one option relative to another. If you are confronted with a decision you must make based on limited information you risk  reaching a poor conclusion that may  affect you for a long time.   That’s why divorce financial planning before, during and after is critical to  your future when dealing with separation and divorce.

 

Image courtesy of Keerati at FreeDigitalPhotos.net

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.

23 Apr DIVORCE AFTER 50- THE BENEFITS OF MEDIATION

The closer retirement, the more important it is to manage resources.  It takes a lifetime of planning for the years when more monies will go out than will be earned.

For most couples, their plans for retirement are meshed.  When kids are young, there are often dreams about what an empty nest will feel like.  When it finally comes, thoughts often move ahead to the time when leisure will dominate.

No couple plans for a divorce.  They are too busy working, saving, managing the household and just living life.  But recent statistics show that separation and divorce is growing more quickly among mature couples.  There are many theories, including the one that says the “baby boomers” are a generation that feels a strong entitlement to their lifestyle choices.  This is the generation that is now spiking divorce rates.

The math is simple the closer you are to retirement.  There is less time to save and a longer time to spend.  Preserving the nest egg means splitting it up in a way that will bring the most benefit to each person.  And spending it on a fight means less for everyone.

Mediation is a very useful process when maintaining resources is paramount.  Here are some good reasons for engaging a good mediator to help you work out your separation agreement:

  • It is better for your kids (imagine how hard it is for grown kids to see their family change)
  • It is your process and you can control cost and timelines
  • It is confidential
  • It gives you the chance to leave the process with an ongoing relationship to maintain a healthy family
  • The mediator along with a financial partner will make sure you understand what your financial future looks like and will offer you the opportunity to make market adjustments as necessary
  • You will be given the opportunity to work on your future, not to fight about your past
  • Mediation has been around for decades and has a proven track record of success
  • It is something you can both agree on

10 Apr Grey Divorce

In 2009, people ages 50 and older were twice as likely to divorce as their counterparts in 1990. Researchers have just begun to explore why. They know that, for many boomer couples, the kids are out of the house and it’s time to face reality. Who gets to keep what is  even more stressful at this age when  you have to consider the financial impact  this will have on the rest  of your life.

If you or someone you know is facing divorce in their 50’s, this is a  reminder that we are hosting “Late in Life” Divorce Talks on Thurs Apr 12th. Join us to hear about the what the financial  effects might be depending on whether you’re the dumper or the dumpee.

To register click here  http://www.eventbrite.com/event/2544127554