17 Apr How working with CDFA makes a difference in Divorce

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.

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

20 Mar I Owe What in Income Tax?!?

Tax

Tax (Photo credit: Images_of_Money)

If 2011 was the year you signed your separation agreement and Spousal Support  payments were part of your agreement,  you should   get professional help when  filing your taxes  this time around .

The spouse who pays support is entitled to claim the amount of the payments as a deduction against his or her income tax. The receiving spouse is consequently obliged to claim the support he or she has received as taxable income on his or her tax return. If he/she is working, the amount received in spousal support must be added to his/her employment income. The payee will be taxed on his/her total income, including support payments.

To ensure you can make this deduction, your separation agreement, which obliges the payer to make the spousal support payments, must clearly state that the payments are for spousal support. Without this clear statement, the federal Income Tax Act requires the payments to be treated as child support payments, which are not tax deductible. Also, they are they not reportable as taxable income in the hands of the payee (your former spouse and partner).

You need to track these payments on your own.  If you are the receiving  spousal support payments, don’t assume you’ll be getting any official  ”tax slip” like a  T4 or T3 that confirms these payments.

I can calculate your estimated tax payable if your receiving spousal support  payments  or amount of tax deducted if you are paying spousal support.  If you are  receiving support I can provide some strategies for  saving and reducing the tax bill .

You don’t want to have any  surprises come next tax season!

17 Aug Get real: Divorce is a business

Have you put aside the romantic notion that love conquers all…No matter how intense your emotions, it’s important to remember that ending a marriage is in fact a business deal. Those who ignore the business aspects of divorce do so at their own peril, as that divorce statistic shows. Many people seemed shocked by the advice that women and men should prepare themselves financially before ending a marriage.

Here are (3) important business affairs that required your attention:

1. Pull your credit report.Pull your credit report before the divorce so that anything in dispute can be resolved before the divorce is final.

2. Open individual bank, credit card and brokerage accounts.
You also need to do this before the breakup is official. It will be easier to get a credit card and bank account in your own name while you are still married. This is especially important for a woman who has never established credit in her own name.

3. Close all joint accounts.Closing shared accounts is a critical step and one that is too often overlooked. Cancel the accounts and be sure to request that they report each account as “closed by customer” to the credit bureaus. Divorce can take time; pay off share debt with joint assets if possible.

Since money is the number one cause of divorce, it’s safe to assume that splitting the financial sheets won’t be easy. Have you considered all of the financial ramifications in your situation?

03 Aug When You Are the One Paying Support

Nearly one third of all married women make more money than their spouses. This economic statistic is certainly a factor why women increasingly are paying support. However, in our society, women seem surprised to have to pay support even if they earn more. As the financial gender gap continues to narrow, an increasing number of women involved in a divorce must confront the possibility of paying support to their spouse. (AKA, “Manimony”).

I have assisted many divorcing women who face the prospect of paying support. Women who have worked hard building careers, taking care of children, dealing with aging parents, feel that they have contributed more than their fair share while married.

Are you someone who make more money than your spouse? If you found yourself in this situation, how did you deal with this issue?