Yearly Archives: 2020

What is a successful divorce?  For some that may mean getting most of the assets; for others it may just be completing the process as quick as possible. My desire for the individuals and couples I work with would be that both parties come out educated, with an understanding of what their divorce settlement means for their future, while still maintaining the family unit throughout the process. For that to be a reality there are a few secrets that you must know to achieve that successful divorce.

Secret #1 – Be Open to Mediate

No matter where you live divorce is expensive and the longer the process and more fighting you do, the costlier it becomes. Have you ever spoken with anyone who bragged about how awesome their divorce was? I haven’t, and suspect nobody else has either.  What if you were willing to come to the table and civilly hash out the most appropriate divorce settlement for each other and your family?   Just picture the possibility of not only a smoother divorce, but also a quicker and cheaper divorce too.

Secret #2 – Work with the right Professionals

If you are considering a large financial purchase or life change like retirement, it is not uncommon to hear, “hey, you should talk to my financial advisor.” So why is it that when someone mentions divorce, which requires huge financial decisions, does everyone ask if you have called a lawyer? Don’t get me wrong, attorneys are great and necessary in a lot of cases, but why wouldn’t you first call a financial expert? A Certified Divorce Financial Analyst® (CDFA®) can help to educate you and guide you through this large and complicated financial decision. A lawyer can direct you and provide legal counsel, but a CDFA® can help you understand what your divorce settlement looks like today, as well as projecting it out in the future. If you want the outcome mentioned above be cautious of the combative attorneys and consider a CDFA® to be a part of your team.

Secret #3 – Prepare Emotionally

Divorce is scary, emotionally draining, confusing, overwhelming, and the list goes on and on.  Nobody expects you to check your emotions at the door; it’s okay to feel the emotions of divorce. What you need to be aware of is allowing those emotions to become all consuming. This could lead to an inability to make decisions or making too many emotionally driven decisions. If you are not working with a counselor or licensed therapist, you should be. Emotional healing must start with looking inside yourself first. If you are seeking a successful divorce that can ultimately lead to a healthier and happier post-divorce, then you must be willing to examine your own life.

So, what is the formula for a successful divorce? I believe it starts with a willingness to work together, something that may be very difficult to do, but necessary to save money and save each other from more pain and heartache. Then it’s contacting the right professionals who can work with you to settle without paying an arm and a leg. If you want to learn more about what this might look like, please contact Next Step Divorce Solutions.

There are a lot of mistakes that can be made throughout a divorce, but there are some that can be felt for years beyond the final divorce decree.

Avoiding the Financial Homework

It is typical that one spouse handles the finances.  As you enter negotiations on a divorce settlement the family financial manager will have a leg up.  If you believe you are heading into divorce or have recently been served papers and you are not the financial person in your marriage, it is time to become one.  You can work with a Certified Divorce Financial Analyst® to help guide you through the items to begin collecting, but you need to go beyond collecting the data. You are embarking on a journey that will require you to begin making big financial decisions and you must start learning what you have and how to manage it. Working with an advisor is a good starting place but don’t expect to pass the responsibility over, they are there to guide and direct you.  This may seem daunting, but you are capable, it starts by taking one step at a time.

Hiring a combative attorney

Hiring the right professionals in a divorce case can get very expensive, especially if you end up heading to court. According to Martindale-Nolo Research the average cost of divorce in Texas is just under $16,000 and on average will last a year. If you end up having to go to court to settle your divorce, those figures could nearly double.  You will save yourself a significant amount of resources and time by choosing to work together, with some guidance, and mediate your case. Not only will this be less costly, but it will also offer you the most flexibility when negotiating your divorce settlement.   

Making emotional decisions

Divorce is emotional, nobody is arguing that fact.  When it comes to splitting assets, I would caution you to not get focused on any one asset; the house, paintings, pension, etc. Lean on your Certified Divorce Financial Analyst® to help you get a look at the bigger picture.  This is commonly seen with the family home, especially if children are involved. The main caregiver, in most cases the women, may not want to cause more emotional distress on the kids so she fights to keep a house she can’t afford. She becomes house poor and after years of being a stay at home mom, she is now having to go back to work or ultimately sell the house she fought so hard to keep.  Making emotional decisions may satisfy a short-term desire but it may have long lasting negative impact on the financial health of the “losing” party.

Not considering taxes

The U.S. tax code is complicated and doesn’t seem to ever simplify.  Whenever any financial decision is made about buying, selling, splitting, holding, inheriting, and the list goes on, you must consider the tax impact. Why?  The most obvious is the rates alone. Let’s say for example that a couple has a checking account and two IRA accounts. In an effort to make an equitable split one might suggest that one spouse keep the checking account and the other take the two IRA’s that in value equal the same as the checking account. Great, equitable split, right?  No! Whenever you take money out of an IRA it is like receiving a paycheck for tax purposes, so depending on the amount you take out you will pay ordinary income tax which today could be as high as 39.6%. Let’s suppose this couple is in their early 50s, now you have to tack on an additional 10% tax penalty for withdrawing the funds from an IRA prior to age 59 ½. Still think this is an even split? I caution you not to make decisions based solely on tax ramifications, but to not consider them at all is a huge mistake.  

Not Implementing the divorce

You have a final divorce decree, now what.  Now the work begins to unravel marital assets, so you can begin to pick up the pieces and move forward. What does that entail? Changing account titles, getting a Qualified Domestic Relations Order (QDRO) for your ERISA plans that will be split, and then actually following through to process it with the institution. Updating your estate documents; you may not want your ex-spouse being named as your power of attorney or receiving assets through your Will.  And don’t forget about those beneficiary designations too! Your financial advisor can help with this process and then work with you to redefine your objectives and goals to rebuild your financial plan.

For guidance on avoiding these mistakes please contact a Certified Divorce Financial Analyst®. This is the post content

Every marriage goes through periods of difficulty and it may have nothing to do with outside forces causing strain, you may just be stuck in a rut.  Unfortunately, we have entered a period in our culture where divorce is acceptable and common, so when things get tough or not fun anymore the only natural solution is to get a divorce…right?!?

My husband would agree that we have had some ups and downs, but in our short 7 years of marriage there has been one notable year that was our first real test.  Three years into our marriage a job opened that allowed us to transfer to Houston, my home (my husband was just glad to be back in Texas). The downside to the move was that I was the only one with a job, we used every penny of our savings to move home, and my husband was contemplating a career change. My parents graciously let us stay with them until we could figure out where in the vast city of Houston was best for us to settle into. One-month passed, then another, then another and our plight had not changed.  With each passing month my patience for our status grew thin and my feeling towards my husband’s lack of employment grew from support to understanding then to frustration and finally anger. Nine months into this “challenging time” we experienced what was probably our first real big fight and I said and thought things, including divorce, that I NEVER thought I would allow to cross my mind. No, I didn’t really want a divorce and I didn’t mean most of the things that I said, but how many couples do you know that hit that first real test of their marriage and choose to bow out? It goes back to a phrase that I am sad to say I have heard more than once, “if it’s not working you can always get a divorce”. If the thought crossed my mind at all then that must be what I want, right?

Thankfully my husband and I were able to work through that time and are still happily married but what if; what if I had fallen into societies trap?  Have you found yourself in that situation where maybe you have thought the D word or even threatened with it, and now the situation has come to the point you are heading down a road you never really wanted in the first place.  

If you are not sure you want a divorce I would encourage you to seek out wise counsel before making a decision that you can’t undo.  If you haven’t already done so I would seek out a local family therapist or church counselor.  Divorce is a huge financial decision, a Certified Divorce Financial Analyst®, can help to give you a better understanding of what it may look like to split assets. And of course, a local family law attorney can help you to understand the legal issues you may face throughout a divorce.  Marriage is not always easy, but it is worth fighting for.

Have you heard the song “Fear is a Liar” by Zach Williams?  If not, find it online and take a listen.  The chorus has become my new anthem.

“Fear he is a liar
He will take your breath
Stop you in your steps
Fear he is a liar
He will rob your rest
Steal your happiness
Cast your fear in the fire
Cause fear he is a liar”

No matter what you find yourself going through, whether it be personal or career growth or a rough circumstance, fear can take many shapes and forms to stop us in our tracks. Divorce is hard, no matter which way you look at it, but allowing fear to control your decisions, the process, and/or your relationships can be detrimental.

1.    Fear can take your breath…Stop you in your steps

In a stressful situation where stress and anxiety run high, as well as every other emotion, FEAR can strike. Instead of the typical ‘fight or flight’ mentality, we become frozen. Here you are in possibly the most challenging time of your life having to make quite possibly some of the most important financial decisions you will have to make. Fear, you bet. My encouragement to you is don’t freeze. Focus on ONE STEP at a time. Surround yourself with good counsel, and I don’t mean just the attorney kind of counsel. Seek out others who can help to guide you financially and emotionally through this process.

2.    Fear is a liar

Don’t believe the lie. God made you capable of survival. You may not understand or grasp everything all at once, but Rome wasn’t built in a day either. As you head down this road begin to educate yourself a little at a time.  Begin collecting statements and do your best to understand what you own. You may have never handled the finances but that does not mean you can’t. Begin budgeting, start with an excel spreadsheet or free budgeting app. Try your best to learn about what you own and your budget.

3.    Fear will rob your rest…steal your happiness

When I became a parent and we were struggling through the ‘newborn phase’ I had several family and friends tell me “it’s just a phase, it won’t last forever, just get to the next phase”.  It is easy for me to become consumed with my circumstances and I often have to remind myself that whatever I am going through is not forever. Divorce is a difficult, but it will pass and there can be happiness on the other side.

Start by casting your fear in the fire. Don’t become consumed by the next ten steps, focus only on the next step.  Seek out good counsel, such as an attorney, mediator or Certified Divorce Financial Analyst® and start to educate yourself in the areas you feel most uncomfortable.   

Starting a business is exciting and terrifying all at the same time.  If you are a parent, you know what I mean. It’s like the moment you see that first double line on a pregnancy test and immediately the sense of pure joy and complete terror sweeps over you. That’s what it feels like to take the leap to start your own business.

So a couple of years ago I decided that I could either continue to ignore God’s direction or be obedient and at least take the first step by studying and receiving the Certified Divorce Financial Analyst® designation.  Thankfully I passed all exams right before the birth of my second little boy. As I adjusted to becoming a Mom of two under the age of two and maintaining some sense of normalcy in my career I put off doing anything until the new year. Kind of like that diet I would start as a new year’s resolution. Well weeks passed, then months but the constant push to go beyond just obtaining the designation kept creeping up. Reluctantly I moved forward and with each step I made, deciding on my company name, setting up my LLC, and getting my logo, the joy and excitement started to outweigh the fear, at least most of the time. 

So why, why would I, happily married with two sweet boys and no divorce experience of my own, decide to become a CDFA® and seek to work with people going through divorce? The answer, although it took me a long time to see it, was simple. I love people, I love helping people and more importantly I want so badly to reach individuals that are in a dark and difficult time in their life and be a light. Light. When I started down this path the scripture “your word is a lamp unto my feet and a light unto my path” constantly came to the forefront of my mind. I initially wanted to utilize the word ‘light’ in my company name but kept coming up short on how to use it. Then my amazing Dad offered a solution. Why not use the meaning of the scripture instead?  You see, our understanding of that scripture is not that God gives us a beacon of light to direct us.  When the scripture was written a ‘lamp’ was nothing more than an oil lit candle, it didn’t offer a bright light but instead just enough to take One Step at a time. So here I am, Next Step Divorce Solutions, offering a light to those that are struggling through divorce. 

I was blessed with the skills and knowledge to offer financial planning guidance and education to individuals and couples. So, as you try to piece together your expenses and your financial information for your divorce attorney consider this, what if you had a financial expert that could take this burden off your shoulders, who could come alongside you to make sure you fully understood your financial situation and how your divorce settlement would affect you and your family now and in the future? What will you choose to do? What will be your Next Step?