To Leave or Not to Leave. That is a Very Tough Question!

To Leave or Not to Leave. That is a Very Tough Question!

Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – It probably comes as no surprise that people who ultimately decide to get divorced, had their first thought about that possibility more than a year before it happens – and sometimes it has been many years!

I have a divorced friend that was married for more than 10 years, even though she left him for the first time in their first year of marriage! Talk about red flags!

Even with early signs, the decision to dissolve a marriage is a very tough and complicated one. Many choose to just stay and still only find the resolution when the spouse you’ve been thinking of leaving for so long, up and leaves you.

Why does that happen? Why do people wait so long? Why do they sacrifice so much while clinging on to something that isn’t healthy? Well, I’m not a psychologist but I’ve spent my fair share of time studying the ins and outs of divorce.

What I know for sure:

  • When people say “for better or worse” most actually mean it! They go in committed to work through anything. But sacrificing self sometimes is not healthy.
  • If your marriage is really hard work, you’re married to the wrong person.
  • If you don’t like the person you are most days, you’re with the wrong person.
  • If you feel bullied, controlled, ignored, or completely misunderstood, you’re with the wrong person.
  • If you’re staying together for the kids, you’re hurting your kids, not helping them.
  • Kids need to see a model of a healthy love relationship or they will not know how to have one.
  • The right relationship should be effortless.
  • The right partner inspires you and you want to become a better person for them because you feel so lucky.

Something to think about.

Three Ways to Plan for Your Divorce

Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – Divorce does screwy things to a person’s head. Believe me, I’ve seen it.
The intelligent, put-together person that you were, turns into an emotional, brain-fogged, unorganized basket case. You try hard to keep it together, but you know this will not go down as “the best of times.” You want to sit down and get a handle on your future plans, but feel paralyzed and surrounded by a fog of indecision.

What’s a person to do?

Well, first, get real.

Admit What You Don’t Know

When it comes to the family finances, what has been your role? Do you handle the bill paying? Are you “in the loop” on all your investment accounts, retirement plans, bank accounts, etc., or are you in the dark? If you are in the dark, you need someone to help you turn the lights on – and quickly! If you and your spouse are cooperative, ask for statements on all your asset accounts and your most recent tax returns so you can find a Certified Divorce Financial Analyst® to bring you up to speed. A CDFA® is specially trained in the financial aspects of divorce and will be your best friend during this process! They will help to clear out that brain-fog like a cool ocean breeze!

Think About Your Future

This is hard at first but start thinking about what the next phase of your life looks like. Unfortunately, this must happen at the same time you are grieving over what you thought the next phase was going to look like. However, if you allow yourself some space, it could actually be fun. You have the chance to start from scratch. What did you dream of doing that got lost during your marriage? Is it time to go back to school? Maybe a downtown loft condo should replace that huge family home. Whatever you dream of you must have your budget and financial picture clearly defined. So, the step above has to come first so your dreams don’t outsize your wallet!

Build a Single Identity

Often through marriage all the credit cards, mortgages, loans, etc., are in the names of both spouses. All those accounts have to be closed or converted. After the marriage is over, your credit picture may not be nearly as strong, so you’ll want to put some things in place while you are still married. Immediately open a checking and savings account in your own name to begin the process of establishing your own financial identity. Next, find a good rewards credit card to apply for in your name alone so that you will be assured of having access to credit post-divorce (and maybe even during the process if legal fees are necessary).

These steps seem small but are valuable first steps to get you thinking financially and looking out for your future. Take control! You can get through this! A little help from a CDFA® friend is a great place to start.

Just How Neutral Can a Divorce Mediator Be?

Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC –Yes, a divorce mediator can easily stay neutral, because they are trained to be attentive to the needs of both parties. Mediators focus on the issues that each individual wishes to address concerning the matters most important to them. Concerns such as child custody, property, financial matters and more, can be discussed with the mediator, who will help guide the couple to a peaceful resolution.

The divorce process will be stressful.  Handling a divorce with a mediator can greatly reduce the stress during this emotional time.  The process avoids having discussions about the personal aspects of your life in such a non-personal setting like a court room(where decisions are made for you, not with you). Not to mention avoiding the stress and high cost of litigation, which definitely makes a divorce nerve-racking.

Working with a mediator also saves the children in the home from the stress of a court room setting. This is a huge benefit and can make the divorce process a less traumatic experience. The divorce mediator also has much more flexibility in the scheduling of times that they can meet with clients to resolve important issues.

Discussions with the mediator, in a private setting, one on one, also manages the tensions that can arise when talking things out.  While the mediator doesn’t make decisions for you, they are skilled at resolving conflicts and clearing the lines of communication between a disagreeing couple. They keep the discussions about issues such as child custody and the dividing of assets on track. They help each spouse voice their own needs and act as a referee, so each party feels that they are heard. Their tools can help individuals avoid unpleasant moments when discussing these highly emotional issues, hopefully making things much smoother.

The divorce mediator can also be instrumental in assuring that the financial well-being of both parties is taken care of. By teaming with divorce professionals such as a Certified Divorce Financial Analyst, it ensures that the important questions are answered for the clients regarding the financial outcome. The CDFA® will list the benefits of specific settlement options and advise clients on the most advantageous property divisions taking the uncertainty out of financial concerns.

Your divorce process will be an emotion, intense and highly stressful period.  It makes logical decision making difficult. At such a critical time, avoiding potential financial disaster is crucial: through professional and proper guidance, concerning financial matters, a CDFA® and mediator can help ensure financial security for both parties as they move into the next phase of their lives.

For help with recommendations on a qualified Divorce Mediator, contact us today!

Five Financial Errors That Will Cost You During a Divorce

Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – For most people, the divorce process is draining and exhausting. Many people describe it as being frozen, numb or moving in slow motion. While experiencing emotional and mental trauma, you will be expected to go through your finances with a fine-tooth comb to ensure that your settlement agreement is fair and equitable. With divorce brain, that’s a lot easier said than done!

Even if you feel like you are clear headed, here are a few of the most common money mistakes to look out for when getting divorced:

  1. Underestimating expenses after the divorce. You will be asked to do a financial affidavit that reflects your expenses AFTER the divorce. It is critical that you are realistic and don’t leave anything out. This information will be used to determine if spousal maintenance is necessary. You must be sure to include everything from your health care deductibles to anticipated home repair charges for the roof you need to replace. If you underestimate your expenses by $200 per month, that’s $2,400 per year. Where is that extra money going to come from? When you are the primary breadwinner,this mistake could lead you to agree to pay maintenance that you ultimately can’t afford. A Certified Divorce Financial AnalystTM will help you scrub your affidavit for errors and make sure that you don’t leave anything out.
  2. Believing that your attorney will handle everything. Your attorney is an expert in the law, not finances. Would you ask your doctor for advice about repairing your car? No!So, why would you expect your attorney to be an expert in finances? The attorney’s job is to ask you to fill out your financial affidavit and take your word that it is correct. A good attorney will glance over it looking for any glaring errors but that’s about it. The most commonly miss-valued asset is a pension. Oftentimes, the pension is the most valuable asset in the marriage. I often see attorneys accept a present value statement from a pension as the correct value to include as marital property. It’s not. Not by a long shot. A CDFA® can value it properly and make sure that tax ramifications are considered and won’t be an issue down the road.
  3. Not consideringtax deductions. Not everyone realizes that portions of your attorney or CDFA® fees during divorce are tax deductible. In fact, very few people do. Any fees for obtaining alimony and/or retirement funds during your divorce proceedings may be tax deductible (this means QDRO fees). Also forgotten are how to handle tax deductions post-divorce. Who will claim the children? Should you alternate them each year? What about tax issues when selling the marital home? All ofthese issues need to be addressed on the front end of the settlement, so you don’t experience ongoing divorce wreckage for years to come.
  4. Letting attorneys do the talking for you. The more you and your spouse can work out by just communicating, the more money you’ll save. I’ve seen many couples that could not bear to be in the same room,but consider the cost.If you have your attorney relay information to the other spouse’s attorney, you’re racking up bills upwards of $600 an hour because you refuse to talk. This makes sense to no one. Get over any anger and talk about what will work. Get through it so you can get over it.
  5. Letting your emotions make your decisions. So many people going through divorce just want to “get it over with.” This is not the time to throw your hands up and agree to a settlement just to be done with it.This kind of thinking is why divorce so often leads to bankruptcy! A 50/50 split of assets is almost NEVER a truly equitable settlement. So, put the emotions aside and talk to your spouse. Take your time and make sure you thoroughly understand what your future will look like after your divorce and be sure to hire the right professionals to help you.

There Is Life After Divorce … And It Just Might Be Awesome!

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC When you’re going through a divorce, it can be difficult to see the sunshine through the trees but, let’s face it, if you’re getting a divorce, it’s because you believe that you can be happier if you’re not married. At least, not to the person you are married to now. Here are some of the possible upsides of life after divorce:

Free Time
How many years has it been since you’ve had time to yourself?? No kids, no husband, no responsibilities. Wow! What are you going to do with yourself? It may take a while to stop feeling lonely, but now’s the time to take a dance class and check out some local meetup groups. It will be a great way to start to find your way back to yourself. You’ll need to start the process at some point and now is better than waiting.

Space
You no longer have to share the office, the garage, the kitchen, etc. It will feel so nice not to have to rinse whiskers out of the sink or try to make room in the shower amongst 30 bottles of hair products! The space all yours and you can do with it what you like.

Sleep
There is nothing better than totally sprawling across a queen or king size bed, spread eagle, to sleep. Not to mention if you were married to a snorer. The peace and quiet is such a treat!

Control Of The Remote
You could spend all day watching Say Yes to The Dress, The Voice, American Idol, and chick flick movies! Or sports, if that’s your thing. No nagging. No arguing. No Interruptions. Just blissful “me time” all evening long!

No Money Battles
Almost every couple that divorces had some sort of conflict over finances. While it’s really nice not to have to battle, make sure you are making good decisions for your own personal finances.

Working with a Certified Divorce Financial Analyst (CDFA®) will help you understand how to put together a settlement for the long term. If you need help analyzing your settlement options and want to make sure you give yourself the best chance of success during this next phase of your life, give us a call.

Divorcing Men Need Financial Help, Too

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC What’s a man to do?

You may have noticed that there are multitudes of services that cater to helping women during the divorce process. Of course, this is largely because of the more-than-likely scenario that the husband has handled the finances during the marriage and the woman needs a little more hand holding. However, this is not always the case. Men can struggle to find the resources they need, as well.

Even if you handled the family finances during the entire marriage, you still need to be sure you understand the intricacies of your financial options, as well as your legal ones. In my experience working with men, there are some common mistakes to avoid that could save you a lot of money.

1. Thinking the assets are all yours because she didn’t work.
Listen, if you have been married for a while, and your wife was primarily a wife and mother during the marriage, I promise you, she worked just as hard (if not harder) than you did. What you now have together, you built as a team, and you each deserve your fair share of those assets. Even if you begged your wife to get a job for years and she refused, you still allowed the situation to continue and participated in the dance. Get over it.

2. Refusing to give up retirement assets.
I see a lot of men that are emotionally attached to pensions and retirement plans and will negotiate a settlement that lets them keep those assets. Remember, both pensions and retirement assets are taxable income when you receive them. If you are earning significantly more money than your spouse for most of your life, chances are you will always be in a higher tax bracket than her. Take advantage of this and give her the entire settlement in retirement assets adjusted for HER tax rate instead of yours. This strategy can save a significant amount in taxes, and they BOTH get to share in the benefit. Mentally tying yourself to those assets, just to pay a higher amount in taxes in the end, is just kind of shortsighted and dumb.

3. Being a bully.
Sometimes fear can show up in the negotiation process as anger and I see lots of men that make the mistake of thinking that being angry will somehow help the situation. Gentlemen, it’s just a bad, bad idea. You’re both scared. Make sure that you work with a Certified Divorce Financial Analyst (CDFA®) that will incorporate future financial planning into your settlement negotiations and everyone’s fears can be addressed fairly.

4. Not Asking For Help.
The last tip I have for you is to realize that you don’t know what you don’t know. Men are often motivated by saving money and will attempt to have a do-it-yourself divorce where they draw up their own paperwork. Bad, bad, bad idea. There are so many intricacies, both financial and legal, to the divorce process that you can save a significant amount by making sure you cover all the bases.

At Inkpointe Divorce Solutions, LLC, we want to help everyone in the divorce process have a kinder, gentler, much more affordable experience. Let us help you navigate the pitfalls of your divorce.

We’re here to help!

Ethics In Divorce: It Really Can Exist!

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC –So you find yourself facing a crossroads in your marriage and you land on the side of divorce. Now that it is decided, can you keep things ethical? Can you find a way to do what’s best for both parties? While only five percent of divorce cases today actually end up in court, that process is rooted in finding out where to place guilt and fault. It really got me to thinking, what is the role of ethics in divorce? And how does it show up?

When you think about ethics, interesting images may come to mind: the snake oil salesman of the 1920s, Mr. Potter in “It’s a Wonderful Life”, or the typical caricature of the Lawyer who doesn’t care about his clients and is only interested in the fees that will line his own pockets.

With the business of divorce, ethics may show up in the many times you comfort an emotional client, reassuring them that everything will be ok.  Letting them know that divorce does not mean economic ruin is a big part of the process. You may think about the recommendations made to couples to sell their house, despite their emotional attachment and desire to stay, because it’s the best thing for their futures. As a financial advisor who digs into every minute detail of their finances, I am often the only person who realizes that keeping the house would lead to a financial mess down the road. While this is difficult news to deliver, it is better than the news of a looming foreclosure or bankruptcy that some face when trying to keep the marital home. The truth is, concern should be for the ultimate stability and welfare of both parties in the divorce, regardless of who the client is … especially if there are children involved.

Perhaps that’s the real difference. Regardless of who the client is, the goal is to help this couple become the best divorced family they can be, because they’re still a family! The goal is to get the couple through the process without either of them feeling like a criminal. Afterall, the way we treat divorce in this country, I’ve seen couple after couple embark on the litigation process only to end up feeling punished, angry, financially devastated, and anything but a winner. We’ve got it all wrong.

It is a major miscalculation to think of divorce as a legal dispute that can only be handled in a courtroom. Our process neglects to understand that this is not primarily a business dispute. Rather, it’s a family situation. Notice I didn’t say dispute. My experience has been that differences in opinion around the division of assets only become disputes when fueled by the misguided advising of combative attorneys or family and friends. Now, don’t get me wrong, there are very ethical attorneys out there. But unfortunately, the language of the law is very confrontational and combative. Even with good intentions, it appears that someone is picking a fight.

The reality is the legal system is not created for family situations. It’s created for crime. And almost without exception, every couple I have known that has gone through the litigation process for their divorce, has ended up feeling like a criminal. Well, of course they do! That’s what the system is for! However, with the recent growth of the Collaborative process and options like mediation, it’s moving towards a more ethical process.

The beauty of being human is we can change. We can decide something doesn’t work and do it differently and better.  We can help families that have decided that the best answer for their family is two households, not one, and help make that situation work with love, understanding and a system that supports them.

If you feel like a criminal during the divorce process, give us a call.

We’re here to help you through it.

Five Things You Must Do After Your Divorce Is Final

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – FINALLY! After an emotional roller coaster, you get that manila envelope with your divorce decree signed by the judge. You are officially a single person again. You may celebrate, or you may mourn on that day, but stay focused – you’re not quite done yet. There are some very important items that you will want to take care of right away.

Review Your Decree

First, make sure you fully understand what’s in that envelope and what’s been legally awarded to you. There’s a good chance that you will need to have a QDRO prepared to split a retirement plan. Don’t delay! Get it going to ensure a timely split of the account. Now is a great time to sit down with a financial advisor to map out your new financial plan, open any new accounts necessary and consolidate any old ones. You’ve just gone from “our plan” to “my plan” and it may require some significant changes to your retirement strategy.

Review all accounts

If you don’t already have one, get a credit card in your name alone. Now is the time to establish your own financial identity. And be sure to remove your ex-spouse’s name from any existing accounts including utilities, banks, credit cards, insurance policies, etc.

Get Organized

If you’ve never had one, create a filing system for your important financial documents as well as any statements that need to be retained for taxes. If you’re tech savvy, this might be 100% electronic but it needs to exist.

Review Estate Docs

Be sure to update all your beneficiaries on accounts and insurance policies immediately. When I worked for an insurance company years ago, I remember taking a call from a woman whose husband had just died. When I asked to verify her information, she wasn’t the person listed on the account. Turns out, the beneficiary of her husband’s life insurance policy was his ex-wife who he had divorced over 25 YEARS EARLIER! You don’t want to live a nightmare story of an ex-spouse inheriting a huge 401(k) plan or life insurance benefit because someone forgot to update the beneficiaries.

Write a New Will

Everything has changed. Be sure your new wishes are clear so there is no confusion. If you had any trusts in place, you’ll need to have them terminated and create new ones.

When you get your final decree, it may feel like a new beginning. You might cry a little for the end of your old life, but your heart should also swell a little in anticipation of the new one. The business side of divorce isn’t tons of fun, but with each step you’ll feel your new independence and identity sinking in and it will help you heal.

Today is the first day of the rest of your life. Make it count!

If you need a little help reaching the finish line, contact us today. We’re here to help!

Alimony: How Much Is Enough?

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – Many couples going through divorce know that some level of spousal maintenance or alimony is needed but have no idea how much or for how long. Most attorneys go by your budget numbers which, in my experience, are almost always wrong. Attorneys are also paid to seek the best possible outcome for their clients. Therefore, if you are the payor, they will argue for the lowest number possible – if you’re the recipient, they’ll argue for the highest number possible.

There is a better way!

If you don’t already know, I am a huge advocate of negotiated settlements, whether you use attorneys or not. So, where’s the right number and how do you find it?

A Certified Divorce Financial Analyst can do a full financial projection for each party for any number of years into the future. An analysis that considers all expenses, income, assets and liabilities. It is basically a full financial plan for each person reflecting whatever settlement agreement they are considering.

Once you have that sort of data in front of you, it becomes a lot easier to find the sweet spot that can be a win for both sides. We want both parties to move into the next phase of their lives with the confidence that they will have the financial futures they envision for themselves.

Once we can show that the payor’s net worth and cash flow are positive and increasing, and he or she can still address their financial goals if they pay a certain level of maintenance, they are far more likely to reach an agreement. And that’s what you want, right? To agree and move on?

Don’t spin your wheels trying to convince the other side you are right without the numbers to back you up! Give us a call.

We’re here to help.

How do you spell divorce surprise? Q-D-R-O!

By Duncan E. White, Owner
Inkpointe Divorce Solutions, LLC

IRMO, SC – You’re in the final stretch of your divorce, you can see the finish line and you have reached a settlement agreement with your spouse. Then, your attorney turns to you and says, “Now you need a QDRO and that’s going to be an additional cost.”

Wait, what? Are you kidding? What the heck is a QDRO?

The QDRO is usually that last stop in the divorce process and most divorces will ultimately need one. QDRO is an acronym for a legal document called a Qualified Domestic Relations Order and is required whenever a divorcing couple needs to divide a Qualified Retirement Account. Let’s clarify exactly what that means. A Qualified Plan is typically one being held by an employer and includes 401(k) plans, 403(b) plans, pensions, 457 plans, deferred compensation plans, and some restricted stock unit accounts.

IRAs, or Individual Retirement Accounts, do not require a QDRO, although some companies are starting to ask for one. To take advantage of a little-known opportunity in divorce to avoid withdrawal penalties, even the IRA must use a QDRO. Legally, your divorce decree is all you need for an IRA division. For a Qualified Retirement Account, to assign all or a portion of the accounts to a non-employee spouse, it has to be stated in the divorce decree and then the second document, the QDRO, must be completed and submitted to the plan for the assets to be separated.

If you are granted retirement assets from a former spouse via QDRO, this is the point where you have ONE opportunity to take money out of that plan with zero penalties. It will be taxable income, but there will be no 10% penalty for the withdrawal before age 59 ½. If you want to be able to do this from an IRA, then you must use a QDRO.

During my time doing this work, I have become aware of the multitudes of pitfalls that QDROs present and oftentimes, the failure of attorneys and mediators to address the issues in the settlement negotiations. Here is just a short list of some of the subtleties often overlooked:

  • Is the non-employee spouse eligible to receive a lump sum settlement upon retirement?
  • If the employee spouse dies, will the non-employee spouse still receive benefits?
  • Were any outstanding loan balances taken into consideration?
  • If splitting a 401(k), what is the actual date of division? Will the earnings after that date be included?
  • For pensions, does the plan set up a separate account for the non-employee spouse so they can choose their own payout options and beneficiaries? If not, have you protected the non-employee spouse from early-retirement penalties?

As you can see, the waters are fraught with peril and not for the inexperienced! Also, buyer beware! Prices for QDROs can range significantly!

Each plan has very specific requirements for the language of their QDROs and it is essential that the preparer have the plan documents in advance to ensure it will meet the requirements. You will want to ensure that the QDRO will be PRE-APPROVED by the plan, if allowed, to prevent rejection and more cost to re-do it correctly.

Once your decree is final and signed by the Judge, then you submit the finished QDRO to the court. Once it is signed, only then is it ready to submit to the plan. At that point, they will contact the non-employee spouse to get instructions for the disbursement or to identify the new account set up on their behalf.

This QDRO stuff is complicated. Be sure you have a knowledgeable professional that can guide you through it and make sure you don’t get taken advantage of by the sharks out there that know you need help.

If you need help finding the right professional with QDRO experience, contact us today. We’re on your side.

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