• Strategizing Your Divorce: Importance of a Financial Planner

    If you are in the process of separation or divorce, it is important to seek guidance from a financial planner early in your litigation process. In many cases, and unfortunately, many couples seek financial planning after the divorce proceedings are finalized, only further complicating their financial security.

    Most financial planners, today, would support the idea that when divorce occurs men are often left with the financial advantage. In many divorces, women are left with children to care for, very few assets and usually surmounting debt. For this reason, a financial planner can assist with working through anticipated financial obligations you may have after divorce, including asset ownership, debt management and even offering advice on funding a child’s education.

    Both men and women should discuss financial planning as part of a divorce settlement. Within the realm of financial planning, each person should discuss issues and concerns related to insurance, including life, health, dental and disability. Discussions about credit card debt, tax issues and long term financial needs of children should also be discussed. Too often, couples allow the courts to make decisions with regard to financial needs, resulting in an imbalance of financial distribution.

    During the separation and divorce, it is also important to open and maintain separate checking accounts and close any joint credit cards you may have so as to avoid further complication in the financial discussions. With a clear date on which financial separation occurred, the courts and your financial planner can work to balance assets and debts more clearly.

    With regard to your personal financial documents, each individual in the relationship should have a copy of all paperwork. Allowing one individual to store or hold all of the important legal documents will place the other individual at a large disadvantage. Documents including stock statements, tax returns, insurance documents and even credit card statements are just a few that are commonly mismanaged in a divorce.

    As with any process in a divorce proceeding, it is important to seek professional opinions when necessary. While we commonly rely upon our divorce attorney to provide financial advice, in reality, they are untrained to do so. To ensure your assets and debts are managed and divided fairly, meet with a financial planner as part of your divorce process and be certain to obtain copies of all financial documents while hold a separate checking and savings account.

    With more than 15 years as an SEO professional, Christine specializes in SEO strategies, and website content development in topics related to health, insurance, finance and legal issues. Her services have b…  View profile

  • NJ Divorce Advisors, LLC Announces Seven Ways To Protect Yourself Financially In A Divorce

    Red Bank, NJ (PRWEB) November 10, 2011

    Divorces can be ugly. Even if you think your soon-to-be ex is trustworthy, scorned spouses can be vicious. What better way to screw up someone’s life then by draining a bank account or destroying one’s credit? It happens a lot. While one article can’t tell you every way to protect yourself or offer specific legal advice to your situation, New Jersey Divorce Advisors, LLC, has partnered with Family Attorney Richard Panitch of Marks & Klein, LLP to compile seven ways you can protect yourself financially if you’re going through a divorce:

    1. Get a free credit report: You’re probably saying to yourself, “I know my credit score and my debt situation.” That might very well be true, but many times, a spouse won’t tell you they bought that new sofa they always wanted with your joint credit card. Then they’ll try to make you pay for it. In the case of infidelity, cheating spouses often have a motivation to hide certain charges and assets from you. One way to do a quick health check on your debt is to review your credit reports issued by the three major credit reporting companies: TransUnion, Experian and Equifax. You can get a free credit report from all three, once a year by going to the web site: http://www.annualcreditreport.com. Caution: Many credit score companies try to make lots of money by monitoring your credit for you. For the most part, you don’t need a service and the above reports are totally free.

    2. Figure out your assets and liabilities: Check your bank statements, brokerage accounts, and credit card statements. Be sure to check for new accounts for which you’re not aware. Even if one spouse is unaware that a debt exists, he or she can be held liable for repayment after the divorce is finalized. While a spouse in New Jersey has a duty to be forthcoming about assets under the state’s matrimonial law, not every spouse takes that duty to heart. The best way you can protect yourself is to be educated. An experienced lawyer and capable financial team can also help tremendously.

    3. Figure out the cost basis of investments: Do you know the tax implications of your investments? A 50-50 split might not be as equitable as you think. If one of your stocks has appreciated significantly since you purchased it, you’ll be paying capital gains taxes on those appreciated shares when you sell. You might also be in a situation where your largest marital assets are illiquid — can’t be converted into cash — such as a retirement plan or your personal residence. You must consider tax consequences, early withdrawal penalties, and transaction costs to equally divide assets.

    4. Stop putting your paychecks into a joint checking account: Too many terrible tales exist beginning with the words, “My spouse is very trustworthy and we’ve always put the money in the joint account to share expenses.” That warm fuzzy feeling doesn’t last when the other spouse writes a check and cleans out that joint account. With most joint accounts, either party can go in and remove funds without the other’s permission. The best way to protect yourself is to set up a separate account in your name only. Again, a good financial advisor can ensure accounts are titled correctly.

    5. Stop the joint credit cards: If you have opened credit card accounts with your spouse, put some protections in place. Cancel the joint cards. Even if you both agree that one spouse will be responsible for that credit card, the bank has both of your guarantees and doesn’t have to honor the agreement between you and they won’t. The credit card company just wants its money back plus interest. Protect yourself. If you must have joint credit cards, establish low credit limits with the financial institution and make sure you confirm the arrangement in writing.

    6. The Settlement Agreement matters and it matters a lot: In New Jersey, most divorce cases are settled by what we call a Property Settlement Agreement. This agreement disposes of not only the property and financial issues in a divorce, but also child support, alimony and custody issues. The language of that agreement matters. The Court doesn’t rule on whether the settlement is fair. They rule on whether the agreement was voluntary and if the parties believe it’s fair. If you’re decision proves to be unwise, you’ll be stuck with that agreement once the Court rules. Don’t write this agreement yourself. It’s never a good idea. Lawyers and financial planners who work in this area are trained to think about important issues that most individuals might not. These can include rebuilding, estate planning issues, avoiding IRS penalties and liability, life insurance (making sure the children are protected in case of tragedy), dealing with privately held businesses, college financial planning and so on.

    7. Update your Estate Planning Documents and Beneficiary Designations: Many people don’t realize that beneficiary designations on accounts such as IRAs, 401(k)s, pensions and annuities supersede what is written in a Will. We’ve heard so many stories about a wealthy individual dying and his or her ex-spouse from 20 years prior receiving a significant sum of money. This happens when the decedent fails to update a beneficiary designation. A good practice, whether divorcing or not, is to review beneficiary designation forms annually. With all the legal, financial, and emotional chaos a divorce can bring, many people forget to update their estate planning documents. Do you really want to leave all your worldly possessions to your soon-to-be ex? Do you really want your soon-to-be ex acting as your Power of Attorney if you become incapacitated?

    About NJDA

    New Jersey Divorce Advisors, LLC, was formed to help divorcing individuals and their attorneys make informed decisions and negotiate equitable divorce settlements. Trained in both mediation and collaborative divorce, our advisors are equipped to navigate the most complex situations. We may be hired as a neutral third party or as a client advocate.

    For more information about the benefits of collaborative divorce, visit http://www.njdivorceadvisors.com.

    Richard Panitch is a Family Attorney with Marks & Klein, LLP in Red Bank, NJ.

    Bryan Koslow is a Certified Financial Planner and Certified Divorce Financial Analyst with NJ Divorce Advisors, LLC, in Red Bank, NJ.

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    Bryan Koslow

    New Jersey Divorce Advisors

    732-703-6532

  • 10 Telltale Signs Your Wife Has Met with a Divorce Lawyer

    You may not know your spouse is plotting to divorce you, but I do. I am the divorce attorney your spouse consulted with. If you are aware that your spouse has taken the following steps, not only is it likely she is planning a divorce . . .it is also likely a lawyer is already involved and you should act quickly to protect your own interests.

    1. She has a P.O. Box. “One of the first things we tell clients to do is open a Post Office Box where we can discreetly send mail.” Says Jared Potter, a divorce attorney at Stafford Rosenbaum LLP in Milwaukee, Wisconsin. Intercepting a letter from your wife’s divorce lawyer is a terrible way to find out she is divorcing you. With a separate P.O. Box, the client can also begin diverting her mail away from home and to the P.O. Box so that new credit cards, new bank statements, etc. cannot be intercepted or viewed by the unwitting spouse.

    2. She has been receiving vague voicemail messages. Intercepting a voicemail message from your wife’s divorce lawyer is also a terrible way to find out she is divorcing you. Therefore, we discreetly call clients using an untraceable calling service such as slydial.com and leave a non-descript message such as “Hey, Jennifer! This is Kelly just giving you a call. Call me back when you get a chance.”

    3. She has a lot of routine medical appointments and is refilling prescriptions. If you provide health insurance for your spouse, her benefits will likely terminate at the time of divorce. Therefore, she will want to be fully aware of any health issues that could impact her ability to get independent coverage or that could result in exorbitant medical costs.

    4. She is charging everything on a credit card and hanging onto cash. Credit card debt is easy to quantify and identify-cash is not. If your wife has started charging purchases she would normally pay for in cash-she is likely saving the cash for a rainy day, while accumulating marital debt on the credit card that you will later be one-half responsible for.

    5. She has stopped her 401k contribution. I have likely informed your wife that if she continues to contribute to her 401k she is saving money not only for herself . . .but also for you. As a result, she has decided to temporarily stop the 401k contribution and take the extra cash in her paycheck to help cushion her for the upcoming divorce.

    6. She has recently changed her life insurance beneficiaries. Once a divorce action is filed, most courts will not allow parties to change their beneficiary designations until the divorce is final. No one wants to die mid-divorce and leave everything they are fighting for to their unwitting spouse, let alone reward them with an undeserved life insurance windfall. Most people plotting a divorce quietly change their beneficiaries to avoid this possibility.

    7. She gets an oil change and new tires on her car. Why would she do this? Why not? As long as you’re still on the hook for half the cost, this will be another item she adds to the growing credit card bill.

    8. She cannot discuss or commit to any long-term planning. Try to talk to her about refinancing the house or building that addition you always dreamed of. Try to discuss a trip to Ireland in the fall when flights are cheap. She will panic for two reasons: (1) She doesn’t want to commit to anything that might change the delicate balance of assets and debts to be divided upon divorce; and (2) she knows she’ll be out of the picture by the time the plans unfold.

    9. She has recently photocopied your tax returns . . . and you are not in the process of refinancing your home. Some of the first documents we request from clients are copies of their personal tax returns and year-to-date paystubs. If these documents have disappeared from their usual place in the file cabinet or have been otherwise disrupted (unstapled and re-stapled) she has dutifully copied them for her lawyer.

    10. She recently made an unexplained “loan” to a family member. This is likely how she paid our retainer. She cannot have an obvious charge to a family law firm on your joint credit card. So, she probably wrote her sister a check for a large “loan.” Meanwhile, her sister has sent us a check for your wife’s divorce retainer.

    Kelly is a partner at Stafford Rosenbaum LLP, a premier family law firm in Milwaukee, Wisconsin. She has extensive experience with all legal matters related to marriage and marriage-like relationships. She…  View profile