Bohm Wildish: California Postnuptial Agreements – Singing a prenup (prenuptial agreement) is fairly common practice that everyone is aware of. Many couples decide to sign a prenup to figure out financial issues that will save headaches and protect individuals in the case of a split. But what about a postnuptial agreement? Are you considering signing one? [Read more…]
Bohm Wildish: Divorce Business Ownership – Divorce finance is complicated as it is, but trying to divide a business makes it extremely vital to know the process before making business decisions. The business is typically an asset and a source of income for the couple. [Read more…]
Bohm Wildish – Divorce and Taxes: Tax season is here– everyone’s favorite time of year. (Not.) Most people are currently thinking about their finances, their taxes, their credit score, etc. More than 75% of California marriages end in divorce, so many of our clients from Orange County and Los Angeles are especially worried about finances this time of year if they’ve been recently divorced. RoadFish recently released a few observations about how a divorce can affect one’s credit, and we thought we would share them with you. [Read more…]
Bohm Wildish – Divorce and Taxes: Congress passed the American Taxpayer Relief Act (ATRA) at the beginning of this year to prohibit tax increases to the middle class and spending cuts in motion if no action were taken, and to avoid the “fiscal cliff.” But if you were in the middle of a divorce settlement, the new tax laws may impact your outcome. [Read more…]
Health insurance is essential for people at any age. You want to sign onto a plan that will give you the best coverage for you and your family. However, what happens when your family encounters a divorce? Since there are an increasing number of divorces each year, the courts are no longer awarding health insurance. Additionally, the supporting spouse with the employer-provided health insurance no longer covers the family. In some cases where the employer-provided health coverage continues for the family, the cost is still considerably high to continue to the end of the 36 month continuation period. Currently, affordable health insurance seems to be rare. Many employer group health plans are being discontinued as more employees become out of a job. It is important to plan your health insurance in advance and know all your options to avoid this problem. [Read more…]
Divorce Advice: Jeff Landers recently wrote an article in Forbes outlining seven steps for women to achieve financial stability post-divorce. If you’re a woman who has recently gone through a divorce, your life has probably drastically been changing. You may have experienced an emotional roller coaster, and now you’re in full control of your finances. Paying bills, planning for your children’s future, saving and investing all take a considerable amount of effort and planning. Your ex-husband may have been the one to handle all of that, but post-separation or divorce, it’s all up to you. Once your divorce settlement is finalized, Landers recommends these seven financial steps:
- Update accounts: If you changed your name, you’ll need a new Social Security Card, driver’s license, passport and credit cards. Notify your bank, insurance companies, utilities, the DMV, etc. about any address or name change. You may also want to update beneficiaries on your life insurance, 401k, pensions and IRA accounts.
- Develop a financial plan: Make sure you have a firm understanding of your income: any full-time pay, part-time pay, child support, spousal support, etc. Calculate a realistic expectation of what you will spend daily/weekly/monthly. Then think about anything and everything you’ll need to save for. Be realistic. Set budgets and stick to them to avoid sudden crises or stressful situations.
- Build good credit: This is underrated divorce advice and an important step to protecting your financial future. Get a copy of your credit report, use your credit cards and pay them off in a timely manner. That’s the simple way. It’s much harder for women who are not employed full-time and who don’t already have decent credit. If that’s your situation, prepare yourself for the reality that securing credit may be time-consuming and require more than simply filling out an application or making a phone call.
- Seek help from a financial advisor: Try to find an advisor who is experienced in working with women post-divorce. All the components of a financial plan should be approved by a financial advisor. Don’t risk being wrong about your financial situation/budgeting and put your financial future in jeopardy.
- Add other professionals to your divorce team: Many recently divorced women struggle with a lot of the same things, and experienced professionals can truly help with sound advice. An estate-planning attorney, a therapist and a vocational counselor are great options for many women starting their new life.
- To-do items: Obtain a copy of your certified divorce decree. Close any joint credit accounts. Remove your ex’s name/address on all remaining accounts. Research your new health insurance options. Open a new credit/bank account. Disinherit your ex (new 401K, pension, will, medical directives, etc.) Establish a system to track child/spousal support.
- Enjoy your new life: You’ve set your goals and planned for the future. You’re starting a new chapter in your life, so make the most of it and enjoy life to the fullest.
Find more divorce advice articles in the Divorce Guide
Will a painful divorce help or hurt your career? That’s the question Marcia Heroux Pounds answers in a recent Sun Sentinel article.
Pounds notes that lawyers and mediators believe divorce can do wonders for your career or kill your career. The stress of a divorce is an obvious hurdle. Your employer could be subpoenaed for information or your chance for a promotion could be gone. In many states, law requires that divorced parents with shared responsibility for children cannot move them more than a certain distance from a residence at the time of their agreement. This might prohibit someone from taking a promotion post-divorce if it would require a relocation. [Read more…]
When your spouse is also your business partner, a divorce will most likely complicate a few things in life.
Celebrity designer Vera Wang and husband Arthur Becker are calling it quits, Women’s Wear Daily recently reported. It’s unclear whether either party has filed divorce papers. Wang and Becker were married in 1989 and have two daughters, Josephine and Cecilia.
Becker reportedly has been very involved with the day-to-day operations at Vera Wang and advised Wang closely as her business developed. This might make their divorce a tricky situation. That said, the company supposedly operates with two camps —Wang’s and Becker’s.
WWD reports that an unidentified friend of Wang’s states,” “They will not let this impact the running of the company. They have worked too hard to build it up.”
However, their $10 million glass-walled home that Wang purchased in L.A. last year could become a large sources of tension, TMZ reported.
Large assets, companies and complicated financial situations can be a heated topic in divorce. Check out or Divorce Strategy for Business Owners to make divorce finance as simple as possible.
With the steady recovery of the stock market, investment accounts roaring back to life and deferred compensation coming back, high-income individuals are again dividing assets instead of debts when it comes to divorce.
Yes, in what is known as a “divorce economy,” homes, businesses, investments, vehicles and even cash must somehow all be divided. But how?
In what the courts call “high asset cases,” it is imperative to hire a qualified attorney who specializes both in family law and high-income individuals with complex asset division.
Plus, wealthy individuals with complicated portfolios usually need to set up a divorce team. Once you have hired your family law lawyer, it is time to think about hiring a tax accountant, financial specialists and perhaps even a psychotherapist to help you through the stress of divorce.
Community Property or Separate Property?
Let’s get down to basics. Who owns what? Well, it depends on timing and on your pre-nuptial agreement (if you have one).
Community property is any property that you and your spouse bought after you got married. In some states, “separate property” includes property acquired before marriage or as part of an inheritance or gift. This “separate property” designation can also pertain to assets received from said property (such as selling a house before you were married).
Dividing High Assets
According to family court, couples with a lot of accumulated property and wealth are considered “high asset” divorce cases. Some examples of assets to be divided include pensions, cars, boats, real estate, securities portfolios, business partnerships, stocks, investments and bonuses.
What about Taxes?
Divorce can really put a wrench in your tax situation. In high asset divorce cases, a tax accountant works closely with your family law attorney to steer you into the right direction. Your tax accountant and family law lawyer should help you settle all your tax “problems” in the final divorce settlement including:
Should you file taxes jointly or separately and for which year?
What are the tax consequences of selling the family home? What about any other properties?
Which spouse is going to claim any dependent children on their tax income returns?
How will capital gains on the liquidation of long-term investments affect your tax bracket?
What about any tax defaults? How do you deal with that when it comes to dividing liabilities?
How Much are you Worth?
It is also important to bring in a team of specialized financial experts when it comes to high-asset divorce. Why? It is most important to determine the monetary value of each asset so there can be a fair and equitable division.
What types of financial experts might you need to determine your entire worth? The list is long: certified public accountants, certified financial planners, forensic accountants, business valuators, personal property appraisers and residential/commercial property appraisers.
Trial, Mediation or Settlement?
Yes, asset and property division even in complex cases really can be decided amicably via mediation or a private settlement. Sometimes, however, high asset divorce cases can become contentious and do go to trial. This is when it is even more important to hire a divorce attorney who specializes in wealthy clients because you will need a tough negotiator in court when it really counts.
Women undergoing a divorce are under tremendous stress dealing with emotional, legal and financial demands not to mention the challenges of a career and children. With all these pressures, many women make bad financial decisions such as not obtaining an excellent lawyer or too quickly accepting the first settlement proposal.
Remember, whatever financial consideration decisions you make will possibly last a lifetime so it’s best to take your time and get the best advice possible from reputable divorce professionals.
First off, gather all your financial records together in one place. Create a detailed list of income, expenses, assets and debts. Make copies of everything including records such as bank and brokerage account statements, pension plans, IRAs and insurance policies.
Next, start developing a short- and a long-term financial plan. It’s also important to research and understand the potential tax consequences for divorcing couples.
Your research into the financial implications of divorce – along with advice from your divorce attorney – will help you strategize when it comes to understanding the financial implications in each settlement proposal.
What about bank accounts?
In consultation with your attorney, carefully begin to separate joint bank accounts and open new individual accounts. This will be important for your future financial independence.
The same goes for credit cards. Ask your lawyer about closing joint credit card accounts and opening new credit card accounts in your name only. To avoid problems with any credit charges, remember to place fraud protection alerts on any joint credit cards accounts.
What if you own a business?
Unfortunately, a divorce can lead to the ruination of your business. Why? If your business increased in value during the marriage, a judge can be obligated to award half the increased value to your spouse. And if your business cannot come up with this owed amount, you may be forced to sell your business quickly and at a rock bottom price.
What if your husband is your business partner? He may be entitled to ownership interest. But be forewarned. If your spouse retains part ownership, his future wife may eventually become your business partner too. To get your husband out of your business completely, ask for a “unilateral right to buy” your husband’s part of the business. To do this, however, you may need to use monies from your share of the marital assets or devise an ongoing payment plan.
The #1 divorce tip: How do you avoid these scenarios altogether? Savvy business women can take years to “divorce proof” their business with the help of a qualified financial planning and divorce attorney team.