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Steer Clear of Financial Advice from Friends and Family During Your Divorce

posted by admin 3:42 PM
Thursday, November 3, 2011

Imagine you are enjoying a wonderful evening at a five-star restaurant. You’d like to order a bottle of wine, but you’re not sure which one would best accompany your meal. Would you ask the bus boy or valet for their recommendation? Of course not! If you’re ordering wine at a five-star restaurant, you want the advice of the wine expert on staff. Naturally, you would turn to the sommelier.

The same logic applies to other aspects of daily life. If you have a problem with your car, you take it to a trusted mechanic. If you have a concern about your heart health, you consult a cardiologist, etc.

So, to whom should a woman turn when she has concerns about the financial aspects of her divorce?

The answer is simple: She should consult only with a professional divorce financial expert – someone who is specially trained to handle the multifaceted financial aspects of today’s complex divorce settlement agreements.

Unfortunately, that’s often easier said than done.

Why? Because when it comes to divorce, there’s no shortage of friends and family who are willing to lend their advice.

In fact, as I see it, divorcing women need to learn to make an important distinction. They need to learn: 1) where to get financial advice, and then, just as importantly, 2) where NOT to get financial advice. Quite frankly, the opinions and recommendations of friends and family can often be more detrimental than helpful. They all mean well, of course. But, this is definitely one of those instances where a little knowledge can be a dangerous thing.

To illustrate my point, here is my short list of people you should “tune out” if they start volunteering financial advice during your divorce:

1. Friends, family, or anyone who claims to have “been there” (or knows someone who has)

Lots of people have a divorce story to tell, and usually, they’re quite eager to share it.  In reality, though, no two divorces are alike. Even relatively fundamental things like differences in geography can have a profound impact. Just because a friend of a friend who lives in Silicon Valley received a settlement that included half of her husband’s tech company doesn’t mean you will get the same deal in your east coast divorce. (See my earlier post for more details about the differences between Community Property and Equitable Distribution States.)

Likewise, even though your cousin kept her marital home , that doesn’t mean you should. And, discussion about your stock portfolio can lead to a veritable minefield of misinformation, as well. Uncle Joe, who helped you get on the right track with investing as a twenty-something, just isn’t the right person to help you understand how dividing your current portfolio will impact your long-term financial well-being.

As I mentioned earlier, all of these people are well-intentioned, and there’s no doubt that they can provide support for you in other ways during your divorce. But, when it comes to advice about your finances, please learn to say, “Thanks –but, no thanks.”

2. A financial professional who doesn’t specialize in divorce

A CPA can file your taxes or give you a snapshot of your current and past financial status.  A typical financial adviser is hired to help you invest in stocks, bonds and mutual funds.  But should you rely on financial professionals like these during your divorce? No, you shouldn’t.

Instead, you need someone with a skill set specific to divorce finances.  A Certified Divorce Financial Analyst (CDFA) specializes in divorce finance and will carefully weigh each settlement proposal presented and project how it will affect your short- and long-term finances while calculating the tax implications for each scenario.

Keep this in mind: The US is home to more than 1 million accountants and some 320,000 financial advisors. But there are only about 3,500 CDFAs who are specifically trained in the financial aspects of divorce.

What’s more, many CDFAs have completed additional education and training. For example, in addition to being a CDFA, I have attended law school and have also completed dozens of advanced training courses in finance and divorce, including many of the same continuing education courses that are required for divorce and other attorneys (trust and estate, asset protection, etc.).

3. An attorney

Finding a firm that specializes in divorce/family law and dedicates at least 75 percent of its practice to divorce is a MUST.

But, these days, there are numerous critical financial tasks that are beyond the scope of even the finest divorce attorney’s expertise. For example, preparing financial affidavits and projecting the financial and tax implications of each divorce settlement option are now the purview of CDFAs.

Put another way, think of the CDFA as the financial leader of your divorce team. A CDFA is responsible for creating comprehensive financial analyses and projections so you and your divorce attorney can fully understand the short- and long-term financial and tax implications of each proposed divorce settlement offer. Then, your attorney can use that information to substantiate and justify his/her positions when negotiating with your husband’s attorney.

Without a doubt, if you’re going through a divorce, you’re going to get advice –whether you asked for it or not. The trick is to know which advice to heed and which advice to ignore. Get the specialized help you need by hiring a CDFA. They’re the professionals that can evaluate your financial circumstances before, during and after a divorce, while helping you plan for a secure financial future.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.


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Should I Keep the House?

posted by admin 1:35 PM
Monday, September 26, 2011

Many women start divorce proceedings unprepared for the emotional rollercoaster surrounding the marital home.

Often, it starts as an internal struggle.  After all, most women fully expect to keep their house. To them, it represents a place of comfort that will provide solace during, and after, a time of great uncertainty.

But at times, the marital house can be just the opposite. It can serve as a painful reminder of all that went wrong with the marriage.

Mix in the feelings (and opinions) of a husband and children (not to mention the fact that the marital residence is typically a couple’s largest asset), and it’s easy to understand how a single piece of real estate can ignite a contentious tug-of-war.

Despite all these emotions, however, every woman must answer the question “Should I keep the house?” based on practical financial reasons. Part of our job at Bedrock Divorce Advisors is to complete the financial analyses and projections needed to help a woman understand if she can afford to do so, and if so, for how long.

Are you trying to decide whether or not you should keep your marital residence? If so, here are four key questions you need to consider:

1. Is your marital home a good fit for the new “single” you? Perhaps the house you’re living in now was purchased with the needs of others in mind. Did you choose the location because it was convenient for your husband’s business and travel?  Or did you seek out certain accoutrements largely because they were conducive to entertaining his business associates? If you did, maybe those accessories now seem frivolous and unnecessary.  Are the children you raised in the home grown and living on their own? This could be the right time to downsize and find a place that better suits your life now. It’s important to sort through and separate what you needed from a home in the past vs. what you need now and in the future.

2. What is the current value of the house? Because the marital home is often one of a couple’s largest assets, an unbiased third party real estate appraiser can be an integral member of your divorce team.  An appraiser will calculate the market value of the house by comparing it to homes recently sold and those that are currently on the market.  Ideally, these comparable houses are in close proximity to your home and have similar square footage, acreage and amenities.  Using this information, the appraiser will present an accurate selling price in the current competitive market.  The appraiser’s report could feature prominently in divorce negotiations whether or not you decide to keep the house.

3. What is the cost of keeping the house? Along with mortgage payments, you’ll also have to pay for taxes, utilities, seasonal maintenance, monthly service contracts and perhaps even additional staff to manage the property. Costs like these can add up to become a significant addition to your monthly expenses.   You’ll also have to consider looming repairs and renovations.   While projects like these may add value to the home, they could also prove to be a further financial drain on your resources.

4. What will you have to give up in order to keep the house? Often keeping the marital residence is a tradeoff, rather than an exchange of cash.  In other words, your spouse will keep something that is presented to be of equal value in exchange for the house. If you are concerned about hidden income/assets/liabilities, the possible dissipation of marital assets and/or the value of any item that’s under negotiation, you may need to add a forensic accountant and/or a valuation expert to your divorce team. They can determine the true worth of a business, professional practice or other asset with a keen eye for any misrepresentations that could skew that figure.  The valuation expert can also establish the value of stock options (and/or restricted stock, etc.) and intangibles such as  an advanced degree or training to help ensure that you do not unwittingly give up something of inequitable current or future value in exchange for the house.

Choosing whether or not to keep your marital residence may be one of the most difficult decisions you have to make during your divorce. Give yourself the time to think it through carefully, and remember: Think Financially, Not Emotionally®. You need to strategically manage your assets and develop a sound, comprehensive plan for financial stability and security in the future.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.

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How To Start Preparing Your Personal Finances for Divorce

posted by admin 3:04 PM
Monday, August 29, 2011

“A journey of a thousand miles begins with a single step.”

When the Chinese philosopher Lao-tzu said that nearly 3,000 years ago, he certainly wasn’t talking specifically about divorce – and yet, his words of wisdom do apply.

Divorce is a journey, of sorts. And, even though the mere thought of divorcing your husband may seem completely overwhelming at first, you do have to engage in the process. You have to take the initiative. You have to begin with that all-important first step.

As a Divorce Financial Strategist(TM), my advice is that you start this “journey” by getting a handle on your personal finances.  With just a few relatively simple steps, you can be on your way to establishing a firm financial foundation, one that will serve you well as you proceed through the divorce and long into the future, too.

For example, in order to start preparing your personal finances for divorce you need to:

1. Take inventory of all financial documents and records. Gather all your financial records, including bank account information, mortgage statements, credit card bills, wills, trusts, etc. (See more details in our Divorce Financial Checklist.) Once you have collected them, don’t keep these records in your home. Make copies, and take them to a trusted friend/family member, or use a safe deposit box that your husband can’t access.

2. Begin securing funds for legal and other professional fees. You’ll need resources to hire a qualified divorce team.   If your husband controls all access to the family funds, he can make this difficult (if not impossible). Choking off the money supply is a common tactic, but there’s no reason you have to fall victim to this kind of financial squeeze. Be proactive instead. Make sure you have funds that are secure and available only to you.

3. Open new accounts in your name. Your divorce attorney may instruct you to withdraw up to half of your joint funds and deposit them in new accounts.  (State laws will dictate what you can and cannot do.) Don’t use the bank where you have your joint accounts. Go to a different bank, and open a new checking and savings account in your name. Moving forward as a single woman will require that you establish good credit, so open a new credit card account in your name, as well. Keep in mind, though, that new federal regulations are making it harder than ever for women with little or no income to establish credit on their own. You’ll have to proceed with caution . . . just make sure you do proceed.

4. Get a copy of your credit report. While gathering your financial records (Step 1), be sure to get a copy of your credit report, too.   Monitor it so you can keep tabs on your credit score. (See my post, How To Protect Your Credit Score During Your Divorce, for more tips.) Plus, if you keep a watchful eye on your credit report, you’ll also be the first to know of any unusual activity. Is your husband charging gifts for his girlfriend on your joint credit cards? Or is he dissipating marital assets in some other way?

5. Open a post office box. You need your mail delivered to a secure, locked box that only you can access. Make sure you use this address to receive correspondence from your divorce team, your new accounts, etc.

6. Change your will, medical directives/living will, etc. Most states won’ t allow you to completely disinherit your husband until after the divorce is final. But, you can take steps to prevent him from making medical decisions on your behalf or inheriting all of your assets should you die before the divorce settlement agreement is signed. Remember, you’ll also want to change beneficiaries on life insurance policies, IRAs, etc.

Once you have completed these initial steps, you will be on your way towards a new and secure financial future. Take it step by step, and you’ll start feeling less overwhelmed, more knowledgeable and better equipped to continue on your journey to a single life.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.


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I Have Been Ordered To Pay – How Long Will Alimony Last?

posted by admin 10:00 AM
Tuesday, March 15, 2011

When Mary and John married the plan was for Mary to work while John completed his doctorate in literature.  The idea was that John would eventually get a job in academia.  That never happened. John was unemployed during most of the marriage.

When Mary and John decided to end the marriage, Mary thought that they would split the marital assets and that would be it.  She was surprised to find that she was considered the primary breadwinner and that John was the “economically disadvantaged”  spouse who needed help getting back on his feet. She was ordered to pay alimony for three years.

According to the Federal Bureau of Labor Statistics, women are the primary breadwinners for one-third of all marriages.  This means that more and more husbands are the recipients of alimony (also known as spousal support or maintenance).

State laws differ, but generally speaking “economically disadvantaged” (dependent) spouses are granted temporary alimony / maintenance based on the length of their marriage and whether they have the ability to financially support themselves (For more details on how alimony is determined, click here -

So this leaves a lot of women asking, “How long will alimony last?”

In certain situations, it is possible that alimony / spousal support will be granted for a lifetime.  However, depending on the circumstances it is more likely that maintenance will be granted for a certain period of time.  Regardless, there are two situations where alimony will almost always terminate:

1.    If the receiving spouse remarries; or,
2.    If the paying or receiving spouse dies.

There are certain other circumstances that may be considered as grounds for terminating alimony such as if the receiving spouse is living with another person as if they were a married couple.  However, having alimony terminated in these situations may mean going back to court and more legal fees.

If you are a woman and the breadwinner of your family and are contemplating or facing divorce, contact one of our Divorce Financial Strategists™ who can guide you through the process so that you will have a better understanding of how much alimony, if any, you will need to pay and for how long .

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.

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How to Determine Alimony (also known as Maintenance in some states)

posted by admin 10:02 AM
Tuesday, January 25, 2011

Professional business women who are the primary bread-winners in the home often wonder if they will need to pay alimony to their husband and if so, how much they will be required to pay.

That is a tough question because the laws vary greatly from state to state.  In some states, there are very explicit guidelines that judges must use to determine the amount and duration of alimony.  In others, they simply list “factors” that a judge should take into consideration when determining alimony.  Also, be aware that some states will consider the fault of the party when determining alimony. For example, if the couple is divorcing because one of them has committed adultery, the court may consider that when determining whether alimony should be paid.  That is one very good reason that you need to speak to a good divorce attorney if you plan to have sexual relations with someone other than your spouse before your divorce is finalized (this can possibly affect both alimony and child custody).

Here are some of the factors a judge might use to decide whether your spouse is eligible for alimony:

1.       The standard of living established during the marriage (One of the primary purposes of alimony is to help the receiving spouse maintain a lifestyle after their divorce that is relatively comparable to their lifestyle before their divorce.)

2.       Property awarded to each spouse (Alimony is usually determined after the property division has been decided.)

3.       The duration of the marriage

4.       The income and property of each spouse

5.       The ability of the person to become self-supporting

6.       Present and future earning potential of both spouses

7.       Whether there are children living in the home

8.       If there was lost or reduced earning capacity of the person who is asking for alimony/maintenance that resulted from delaying his or her career during the marriage

9.       Tax consequences

10.   Contributions and services of the spouse who is asking for alimony or maintenance

11.   Whether either spouse has wasted marital assets

12.   Actions taken by a spouse in contemplation of the divorce

13.   Any other factor the Court determines is relevant

There is also something called Rehabilitative Alimony, which is often awarded in short-term marriages.

This type of alimony is usually awarded for only a few years and its purpose is to allow the receiving spouse to go back to school or to get job training so that they will quickly be able to support themselves financially.

It is really not possible to know whether you will be required to pay alimony until you consult with an experienced family law attorney and a qualified divorce financial analyst.  If you are contemplating divorce, please call us at 917-602-6977 for a free, 20-minute, no-obligation consultation with one of our Divorce Financial Strategists™.

All content on this site/blog is for informational purposes only, and does not constitute legal advice. If you require legal advice, retain a lawyer licensed in your jurisdiction. The opinions expressed are solely those of the author, who is not an attorney.

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Why Women Business Owners Should Consider Divorce-Proofing

posted by admin 9:31 AM
Thursday, January 6, 2011

Picture this scenario…

Mary and John have been married for many years.  Mary stayed home and raised three children and helped John build his career.  Mary went back to school without any financial help from John and then became a lawyer and built a successful law practice.  John fell hard for his secretary and filed for divorce.  John sued for half of the value of her law practice – and got it.

Oddly enough, the system of equitable distribution came about largely to protect women.  Several years ago many states adopted this model to protect the dependent homemaker who raised children and helped her husband build his career only to find herself with little or nothing when the marriage ended.  The idea was to make sure that the woman had an equitable share of the family’s assets even though her contribution was not financial.

The very rules meant to protect women are now working against them. This is why all women business owners should consider divorce-proofing their business or professional practice, even if they don’t anticipate a divorce.

Here at Bedrock Divorce Advisors, we have developed an easy two-step process. First, one of our Divorce Financial Strategists™ (a Certified Divorce Financial Analyst [CDFA™] with advanced training in asset protection and divorce financial planning strategies) will analyze potential risks you and your business might face in the event of a future divorce. Second, the Divorce Financial Strategist™ will recommend immediate steps you should take to guard against those risks.  This two-step process will put you in the strongest possible financial position to deal with and recover from any possible future divorce.

 While some may wonder why they need divorce-proofing if they are still single or happily married, we know from experience that divorce-proofing should be part of every woman business owner’s normal financial planning and risk management, regardless of her current marital status.

To find out how divorce-proofing can help you and your company, please call (917) 602-6977 or email us at to schedule a free, no-obligation 20 minute phone consultation.

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