How Financially Prepare for AZ Divorce

How to Prepare Finances for a Divorce in AZ

A handful of important considerations beckon your attention throughout the divorce process. And, being prepared can help ensure your assets stay protected.

How to Make Financial Moves Before a Divorce

If you or your partner have recently filed for divorce in Arizona, there are a few things that you should try to do as quickly as possible.

Choose a Lawyer that’s Right for You

One of the most important steps you can take before beginning a divorce is hiring an attorney you can trust. Divorce can be an intimidating process that is already emotional and stressful, and feeling unsure how to proceed can create even more anxiety.

By hiring an experienced AZ attorney, you will receive advice and assistance throughout your divorce, including formidable representation in court. A divorce lawyer is experienced with all the issues that may occur during divorce, including financial considerations. If you and your soon-to-be-ex-spouse differ regarding the division of assets, an attorney can help you handle financial concerns in a way that preserves your future.

Organize and Identify Your Assets

Organize Records

Identifying your assets also helps if you think your partner may try to sell or hide any community assets in an attempt to avoid dividing them with you. Bank statements, credit card statements, mortgage statements, retirement accounts, life insurance policies, and any physical assets or properties should all be accounted for. It is critical to know what you have before you begin the property division process.

Estimate the Cost of Your Divorce

Unfortunately, divorce is rarely a cheap process. Many people go into divorce not expecting its high price tag and are therefore uncertain what to do with money before a divorce begins. Whether you choose mediation to settle various aspects of your divorce out of court or engage in lengthy litigation to make decisions, divorce expenses can add up quickly. Since every divorce is different, it isn’t easy to determine the potential cost of your case. However, estimating attorney fees, moving costs, court fees, and regular monthly expenses can help to give you a better idea of how to manage your money moving forward.

Avoid Making Major Financial Decisions

Of course, divorcing is itself a major financial decision that will impact your finances. However, other major decisions, like changing your beneficiaries, closing accounts, and transferring assets before a divorce can hurt you during the divorce process. These things will be handled legally once the divorce is underway and the division of assets has begun. If you make these moves too soon, you may risk contempt of court or lose your assets to your soon-to-be-ex.

How to Prepare Finances for an Arizona Divorce

During your divorce, division of assets will result in property ownership changes, in addition to your regular and divorce-related expenses. Here are some tips for handling your finances during the chaos of a divorce.

Close Joint Accounts

Close Joint Accounts

Once you have begun the divorce process, it’s time to start closing your joint accounts. Often, bank accounts have both partners’ names, and funds will have to be transferred individually to new accounts. Joint credit cards must be canceled through the creditor, and you’ll have to open your own new credit account.

Closing joint accounts can help prevent your ex-spouse from misusing funds before the divorce is finalized. It’s important that you open a new checking and savings account in your own name and arrange income for deposits and debits for expenses to be handled through the new account. You should also keep documentation regarding when you closed your joint accounts and began your own.

Get An Asset Evaluation

Your assets are important. Whether you’re dealing with expensive collectible items, a shared family home, or your retirement fund, evaluating your assets is critical for a fair property division process. By hiring a professional to evaluate your and your ex-partner’s assets, you can ensure that the correct value is placed on each asset and that they are fairly divided during the divorce. A professional asset evaluation should be done as soon as possible to avoid delays in your divorce and prevent your partner from hiding assets.

Gather Financial Documentation

To properly handle your finances and ensure that property division occurs fairly during your divorce, you will need to collect a great deal of financial documentation. If you have not already done so prior to beginning your divorce, gather bank statements and credit card statements to help to give your lawyers and the court a better idea of how finances were used throughout your marriage. Checking and savings statements, pay stubs, credit card statements, bills, loan agreements, and income tax returns are all critical documentation needed during a divorce. These documents can help the court understand how money was handled as well as its source, such as the individual incomes of each partner.

Maintain Your Individual Credit

Your credit score plays a crucial role in many areas of your life, including your financial health. Despite the difficulties of your divorce, it’s important to maintain your credit. Unfortunately, people often complete a divorce with weak credit due to mounting expenses, their partner’s spending issues, and many other factors. It’s essential to continue building your individual credit so that you can avoid issues like higher financing rates or difficulty renting or purchasing a new property.

Don’t Forget About Insurance Policies

Insurance policies can become a complex financial task because they often affect other important aspects of your life, many of which were shared with your partner. For example, most life insurance policies will require beneficiary changes if you wish to remove your former spouse. Car insurance policies may also need to be changed if they were previously shared by both spouses or if vehicle ownership has changed.

How Can I Afford to Live on My Own After Divorce?

During a divorce, you may experience multiple different housing situations, all of which present different financial concerns. So, how does this work?

Home Sale

One Spouse Buys Out the Other

Since a home is a physical asset that cannot be split unless sold, the person remaining in the family home must often “buy out” the other spouse. This can be done via a cash out finance or forfeiture of an asset or assets of equal value. With these assets or funds from the cash out refinance in hand, the other spouse can afford a new living situation. The title will need to be transferred to the remaining spouse, and all ownership and mortgage documents should be solely under that spouse’s name.

Spouses Agree to Sell the Home

Another option is selling the family home. Sometimes, this is the best option for couples who do not have children, or cases where neither partner feels they have the finances to maintain the home on their own. With the help of a real estate agent and your lawyer, you and your partner can sell your shared home and then split the proceeds fairly. If you and your partner can’t afford to keep the home or are worried about selling it in the current market, you may also agree to rent the house to a third party. When this happens, proceeds can be split between both partners.

Other Circumstances

Unfortunately, the above options may not be available for all couples, especially if they owe more for the home than the home’s current market value. In some cases, if neither you or your partner wants to remain in the home, or neither of you feel you can afford to stay there, you may have to agree to sell the home at a loss. In more severe circumstances, foreclosure may be necessary. Moving forward, the assets retained after the divorce and your own efforts to maintain your credit should help you find a new residence you can afford.

Protect Yourself and Prepare Your Finances During a Divorce

We provide affordable legal services for any individual involved in or looking to initiate a family or divorce law case. We offer guidance as well as our professional expertise and knowledge of the law. We are located in the heart of Phoenix, but our services are digital, which allows us to help individuals throughout the state.

 

*Editor’s Note: This article was originally published March 21, 2018 and has been rewritten August 23, 2022.

THE UNINTENDED PLIGHT

Divided Loyalties: The Unintended Plight of Children of Divorce

No one marries intending to get a divorce. For the most part, when parents’ split up, they feel badly about putting their children through the emotional pain of their divorce. But what many parents don’t realize is that they can model harmonious interactions with their ex. In doing this, they pave the way for their children to preserve a healthy bond with both parents. Even if they still blame their ex for the divorce, it’s a parent’s responsibility to let go of blame game and put their child’s needs first.

The truth about divorce is that it changes the dynamic of the parent and child relationship. It calls on us, as parents, to be stronger, more compassionate people. Parents who take control of their own lives, with courage and resilience, help their children do the same. Divorce is not for wimps.  It draws on every ounce of energy from parents, forcing them to create a new kind of family.

You see, when parents’ divorce, their children are forced to give up their sense of control. Let’s face it, divorce is a decision made by parents – not by children. Children who endure their parents’ breakup are faced with making choices that decrease their sense of security. These choices can range from whose house to have their birthday party at to worrying about upsetting one parent’s feelings. When children are put in a position where they feel they have to choose between their parents they may experience divided loyalties.

As a parent, it is crucial that you help your child from feeling burdened with the anguish of being stuck in the middle between two angry parents or choosing sides.

Listening to your child’s perspective   and accepting their feelings and view of their situation is crucial to promoting healthy communication with them.

Karen’s story illustrates a child of divorce’s desire to stay out of the middle between her parents’ two worlds.

Karen, an articulate thirteen-year old nailed it when she spoke about the discomfort she felt when listening to her parents’ argue after their divorce: “My parents are so different, I mean my mom is high strung and my dad is easy going.”  I requested that Claudia, Karen’s mom attend our next counseling session because I wanted to empower Karen by giving her the opportunity to express her feelings and to give Claudia the chance to learn more about her daughter’s experience.

During our session, Karen requested that her mom stop putting her dad down for being late to pick her up for visits. “It hurts me when I hear you say he must not want to see me or he doesn’t care enough to be on time. Why don’t you ask me what I think? If you did, you’d realize I don’t care if he’s running late.” Several weeks later, Karen had a parallel session with her dad wherein she was able to disclose that she was tired of being compared to her mother when he was disappointed in her.

An important lesson can be learned from Karen’s comments. First and foremost, try not to involve your child in your anger at your ex. Remember they didn’t ask for the divorce and are powerless to control many aspects of their life. The first step in becoming a responsible co-parent is to put your child’s needs before your own. However, if your ex is hostile or uncooperative, work toward acceptance and focus on your own behavior.  Keep in mind, you can only do so much to influence your ex’s behavior. You could make things worse if he/she sees you as demanding or antagonistic.

You see, divorce forever pits children and even adult offspring between their parents’ two disparate worlds.

The pressure of making decisions about spending time with both parents – especially around the holidays – can cause an adult child of divorce to feel guilty or anxious. If at all possible, try to reduce expectations and suggest rotating holidays.

Even though children don’t cause their parents’ divorce, they often feel responsible for their parents’ happiness. In some cases, they might side with one parent against the other parent, which can cause alienation or even estrangement. In What About the Kids? Judith Wallerstein, a pioneer divorce researcher who passed away recently, cautions us that a serious problem exists when a child and a parent of either sex joins forces in an outright alignment against the other parent.

Many adult children of divorce I’ve interviewed describe the pressure of divided loyalties.

Melissa, a lively twenty-one year old college student speaks candidly about her struggle to cope with loyalty conflicts since age eight. She recalls: “It was really hard to interact with both of my parents after their divorce. When they were saying nasty things about each other, I just never wanted to take sides.”

Loyalty conflicts can make some kids feel as if they need to keep a secret.  Melissa continues, “I felt like I had to keep my dad’s new girlfriend a secret because my mom didn’t know about her yet. You see I didn’t think she’d approve because Shelly was a lot younger than my dad.” When my mom asked me if my dad had a girlfriend I lied but she eventually found out when she saw them together.” Melissa’s story reminds us that children should never feel burdened by their parent’s decisions. Let them enjoy their childhood and think about how you want them to remember you when they grow up.

 These strategies can prevent your child or adolescent from developing problematic loyalty conflicts:

  • Be willing to let your ex have the last word and walk away when your interaction becomes adversarial. Even if you can’t be friendly allies, being cordial and respectful is a worthy goal.
  • Avoid confiding your feelings about your ex to your child. If you do this it forces them to choose sides and can worsen loyalty conflicts.
  • Always recognize that your ex is your child’s parent and deserves respect for that reason alone.
  • Be aware if your child hears you make negative comments about your ex. It can have a detrimental impact on them.  Pay attention to where your child is when you are talking about your ex.  Don’t talk about issues they shouldn’t hear when they’re in close proximity.

Keeping your differences with your ex away from your children will have a positive impact on their well-being in the years to come. It’s also imperative that you remind them that your divorce isn’t their fault and that they should feel free to talk about their feelings with a trusted friend or therapist.  Judith Wallerstein reminds us that parents can hinder their children’s development by holding onto past grievances.  Conversely, you can help your child adjust to post-divorce life by providing loving encouragement and keeping their best interests in mind.

Terry Gaspard, MSW, LICSW

I’d love to hear your divorce stories and any experience you have with divided loyalties. Be sure to order my new book “Daughters of Divorce: Overcome the Legacy of Your Parents’ Breakup and Enjoy a Happy, Long-Lasting Relationship.”

Source: https://movingpastdivorce.com, “https://movingpastdivorce.com/2013/03/divided-loyalties-the-unintended-plight-of-children-of-divorce/#sthash.nj7cbDtY.uxfs”, Terry Gaspard, MSW, LICSW, 3/18/2013

Co Parenting

When Mom and Dad Work Together, Everyone Benefits: Effective Co-Parenting

Bruno Bettelheim, an esteemed child psychologist, once wrote, “The security of the parent about being a parent will eventually become the child’s feeling of security about himself.” Children become what they are in large part because of the confidence and competence that parents find and create in the parental experience.

An effective parental partnership is perhaps the single most crucial factor in achieving that goal. Likewise for children, the most important element in their becoming healthy, solid, and secure individuals is having two parents who have formed and forged an effective parental partnership. Parenting, like marriage, is a proactive process that couples must think through together, creatively sustain, and nurture as an entity in itself.

An effective parental partnership is one where parents unite to offer their child an ongoing experience where both their individual and parental partnership roles combine, support, and mutually enhance each other for the child’s benefit. The relationship is not just child to mother and/or father, but to parents in a primary way.

Bettelheim stated that “With the single exception of the child’s natural endowment, nothing shapes a child’s personality more than the experience of family living–the feelings it arouses and the attitudes it inculcates.” His view of himself, his relations to others and his expectations of the world are gotten from what he observes, experiences, and internalizes in relation to his parents as a mutual entity–how they act, love, value, and authentically are in relation to each other and him as parents.

How does a couple attain and sustain this desired state in the midst of complicated marital, family, and personal living? The answer is both complex and yet basic in its essence when parents get in touch with themselves as parents and the reasons why they chose to be parents. A mutually supportive, enhancing, and rewarding parental partnership is not only possible, but a natural course of events, if properly formed. This can be true, not only for intact families, but also where separation or divorce is the reality. It is never too late to forge a working parental partnership in a child’s development. It is crucial that a child experiences his parent’s ongoing attempts to do so.

Benefits for the child 
The child basically benefits in two ways. First, the child has the chance to absorb and internalize the very experience of mother/father interactions, actively identifying with each and, at the same time, as a parental duo. This is a powerful emotional and behavioral formula that creates unique and authentic individuals. Secondly, the child learns to integrate disparate and contradictory elements in his/her developing self as parents do in their relationship, a parallel process. Opposites such as love and hate, frustration and adaptation, self-esteem and worthlessness, and confidence and humiliation are integrated cohesively into the viable internal and external “playground” to safely and securely grow into his/her authentic self.

When both parents are actively involved and children reach higher levels of emotional and cognitive development, they are less likely to be violent or be hurt, get into serious trouble, or do poorly in school. When fathers stay close during infancy and adulthood, a boy has a less turbulent adolescence, is less aggressive and overly competitive. He is better able to express feelings of vulnerability and sadness. He can more easily resolve conflicts, and can develop more of a sense of empathy. Daughters with active fathers have higher self esteem, are less likely to have sex before they want to, become pregnant, or be assaulted.

How to forge the partnership 
Using a child’s puzzle of about eight to 10 pieces as a metaphor, the elements of a parental partnership can be seen and understood as a whole picture or as the separate components that link to each other in complementary fashion to comprise the whole. Individual pieces represent parental strengths/skills or weaknesses/gaps in either mother or father. To have a coherent picture, one parent’s weaknesses should be compensated by and connected to the other parent’s pieces representing strengths/skills. Where the pieces are placed in relation to each other and why is a joint creative process by both.

To create a viable partnership/puzzle, each parent needs to become aware and accepting of their own strengths and weaknesses (which is not always an easy task). Making this a mutual process and discussion can lead to further or new understanding of how each parent sees themselves, and also in what areas they need understanding, support, or active help. Areas where both need help should lead the couple to new creativity in their partnership, possibly with the help of outside expertise.

Most importantly, to begin assembling the puzzle, a process and language of cues and communications needs to be agreed upon so that when help is needed, the needed supportive process can swing into action. Examples of these could be:

• “Please step in and take over. I need a break.” (parent acting as a buffer) • “I need your assistance.” (parent complementing other parent’s attempts with their own skill, support)
• “Let’s go talk.” (parent knowing when it is time to think something through rather than react)
• “Let me do my own thing.” (parent knowing when not to step in or interfere)
• “Please be understanding.” (parent being patient and supportive, even if not in total agreement with spouse as a parent).
• The more these and other cues can be used and heard in daily life, the more there will be an actual parental partnership at work. How this works, what else is needed, and how each feels about the process should be an ongoing mutual conversation. Different “pieces of the puzzle” can be focused on at any point without losing
• site of the whole picture or what holds it together.

Examples of effective partnerships 
Here are a few examples of effective parental partnerships.
• Fathers help mothers understand the needs of a growing boy
• Mothers, with a spirit of kindness, try to understand a father’s parental insecurities.
• Fathers have—and mothers allow—one-on-one time. They feel engrossed with the experience, and discover their own fatherly impulses.
• Both parents understand that, in a family, shared daily acts and routines are valuable opportunities for connection and true shared parental nurturing.
• Mothers don’t leave lists of activities for husbands to do with the kids, but allow them to have their own experiences.
• Husbands and wives don’t let child rearing be the only center of their bond.
• A strong and supportive parental partnership allows for both parents to have jobs and interests outside the home.
• Shared parenting further commits a couple to each other, as they protect, nurture, worry and rejoice about their children-–a daily intimacy that enhances marital love.
• Children of parental partnerships learn directly that: marriages grow stronger, mutual respect is essential, promises are to be kept, and that conflicts don’t have to destroy relationships.
• Sons of two active, involved parents will likely be nurturing fathers themselves.
• Parents don’t have to be the same or agree on everything. They can play very different roles as equal partners. How they integrate things makes the difference. • Parents act as mutual supporters and consultants. It’s OK for one to be lost, overwhelmed, or confused, as the other supports and understands.
• At times, each parent acts as a buffer for a child and the other parent.
• Learning on the job is OK. There is no need to feel perfect. Children will understand and learn from watching their parents develop as parents, as they do as kids.
• Parents can rotate roles. There is no need to always be the disciplinarian or nurturer.
• Creating enough family time for the ongoing parental and family interactions to be truly experienced by the kids. DON’T farm out essential roles to others. Being there is everything!

Interactive parenting 
• During each stage of a child’s growth and development, both parents play key roles. For example:
• During their child’s infancy, dads can begin their own unique relationship with the infant. A father’s voice is uniquely experienced, even in the womb. He becomes the protector of mother from “the outside,” so she can focus on “the inside” with her infant.
• As the infant, then the toddler, begins separation from the mother, dad actively becomes the first important “other’ in the world outside him and mom. Mom will become security and safety, and he will be the initial connection to the outside world–a critical mutual process in the child’s development as a unique individual.
• When toddlers throw a tantrum “storm” out of separation anxiety with Mom and is all “no’s,” Dad can assist by neither giving in to the toddler’s demands nor by getting into a lose/lose control battle. His calm, re-directing behavior into established routine and rituals, supports mother in modulating the child.
• Parents of a four-year-old experience both mature behavior and then melt- downs over minor incidents. Mother helps Father to understand that, even though he tries to instill moral directives, the operative factor is the parents and their behavior—especially interactions between the parents—that models for the child how to deal with situations.
• The father of a seven-year-old boy relishes in showing his son how to do things, without listening closely enough to the child’s stories of his own masteries. Mother gently and supportively talks with Dad about how, if he listens and admires his son’s “showing off,” that he will be truly idealized by his son, as interactions will be a mutual experience.

Barriers to effective parental partnerships
Barriers can exist that need to be understood and attended to before developing an effective partnership. These can include: fathers who haven’t had strong parental models and are unsure; men who feel that nurturing might not be masculine; men who see their role primarily as the family provider exclusively; or dads who are comfortable with the “policeman role” and not as a caretaker or teacher/playmate. Mothers may be reluctant to share the power as the primary parent; be critical or anxious about the dad’s style of parenting; or may be threatened by the father’s active role as an infringement on her role and relationship with the children. Couples who are experiencing disconnected or dysfunctional relationships may not feel ready or safe to intimately share parenting. Sadly, negative parenting disagreements become a lightening rod for other marital difficulties, with the children as the real losers.

Is it possible? 
An effective parental partnership is certainly possible when both parents see the benefits, not only for their children, but for themselves. What is essential is that each parent be aware of their own parental styles, needs, and shortcomings. Couples must think about what each partner needs from the other to complement their parenting style. The discussion and resulting journey can be rewarding, and make family life an engrossing, enriching experience for all.

A good parental partnership, like a good marriage, is based on trust, commitment, shared visions about a relationship, and a willingness to work at it. A parental partnership needs to be established in all family constellations, intact families, separated or divorced situations, or any other situation where two adults are fulfilling the parental roles for a child.

Tom Bass, L.C.S.W., is the clinical director at Family Services of Winnetka-Northfield. His clinical practice has included work with children, adolescents, adults, and families. This article was first published in the Fall/Winter 2007-08 issue of Early Childhood.

Source: http://www.theallianceforec.org, “http://www.theallianceforec.org/library.php?c=6&news=106”, Tom Bass, Fall/Winter 2007-08.

The Human Side

Divorce Report 2018: The Human Side

We all know the divorce rate is high, though it’s thankfully not as high as the 50% we often hear. It’s actually lower but the exact number varies depending on the study. Since divorce is still a common problem and grey divorce (among people over age 50) is on the rise, WP Diamonds decided to do some research on the human side of divorce. To that end, they conducted a survey of 1,018 divorcées in the United States and asked them about their personal experiences and insights.

Study: The Basics

The average age of participants was 23.2 years old when they first married and 38.7 when they separated, making 15.5 years the average length of a marriage. Notably, those who married under 25 stayed married longer (16.8 years) than those who got hitched when they were older (11.3 years).

 Why Divorce?
‘We just didn’t love each other anymore’ say one in five when asked why they got divorced. But the number one reason turned out to be communication problems, though this seems to be a more important reason for younger participants. One in four who married before 25 names it, compared to only one in five who married after 36. So, what does it mean exactly? Well, turns out ‘communication problems’ is a euphemism for some seriously toxic forms of interaction: contempt, criticizing the other’s personality, defensiveness and stonewalling (not communicating at all).

For 24% of those who married under 25, infidelity was a factor. After that, the other main motivators cited for divorce are: the inability to resolve conflict (22.2%), incompatible life goals (10.2%), lack of individual freedom (12.6%) and financial problems (12.6%). Domestic violence was given as a reason by 3.5%, though unfortunately that relatively low number doesn’t mirror data from the U.S. Census Bureau.

 Selling the Wedding Ring
Since 49% of respondents said their separation cost more than $10,000 (the longer the marriage, the costlier the divorce), it’s no wonder many divorcées look for creative ways to bulk up their bank accounts. Interestingly enough, the majority of the participants sold jewelry (the old wedding ring as a symbolic gesture perhaps), clothes and other personal belongings. Women also preferred to borrow money from friends if necessary, whereas men would rather go to the bank for a loan.

 Seeking Help
Most participants sought help from a lawyer (40%) and one in four considered visiting a therapist to navigate the emotional stages of separation. Those people seeking therapy reported dealing with aspects of grief: denial, pain, uncertainty, anger, bargaining, guilt, depression and acceptance.

Tying the Knot, Again
But to end on a positive note, all this hasn’t made us lose our faith in marriage at all. Only 9% of respondents said they would never marry again, compared to almost three-fourths who said they would consider getting remarried or had already even tied the knot for a second or third time!

By Dorien Dijkwel

Source: https://movingpastdivorce.com, “https://movingpastdivorce.com/2018/03/new-divorce-report-2018-human-side/#sthash.QFPFdQU4.IT0cxgPW.uxfs”, Dorian Dijkwel, 3/1/2018.

Wrecking Your Finance

How To Keep A Divorce From Wrecking Your Finances

By Laurence Kotlikoff, Next Avenue Contributor 

(Kotlikoff also contributes to Forbes. His posts can be found here.) 

Divorce is always sad, but when it turns ugly, it’s terrible. You may remember The War of the Roses, the dark comedy where Kathleen Turner and Michael Douglas start out as a perfect couple and end up destroying their possessions — including their luxurious house and cars — because they can’t agree on who gets what. That movie is unfortunately hitting home for plenty of boomers and Gen X’ers. According to a recent survey by Allianz Life Insurance, two thirds of divorced women feel their divorce created a financial crisis.

Many of my friends have gone to divorce war, but unlike Turner and Douglas, they destroyed their finances (by paying steep legal fees), not their possessions. Divorce doesn’t have to be as financially painful as it so often is, though.

Why Divorce Turns Into War

What drives divorce wars? My hunch is that many are driven by very different assessments by spouses of the impact of their proposed settlements. For example, a husband may think his settlement proposal is incredibly generous while his wife thinks it’s miserably cheap. Without a neutral measurement stick, their fight — with the lawyers’ meters running — can go on and on.

s an economist, I’d say that this is where economics can help couples. Its math and computer algorithms can figure out precisely how much each spouse will get to spend now and in the future under any given divorce settlement. And this analysis can take into account all relevant factors, including the division of assets, alimony and child support, child custody and the disposition of the marital home.

How do I know? My company just released a new software tooldesigned to limit divorce wars (full disclosure: I derive no income from it). It calculates each spouse’s living standard under any proposed divorce settlement.

John and Sally’s Equitable Divorce

Let me illustrate this new technology:

Take John and Sally Doe, both 50, who are untying the knot after 25 years. John earns $200,000; Sally earns $40,000. John and his employer both contribute $6,000 a year to his 401(k). Sally and her employer both contribute $3,000 to hers. John and Sally plan to retire at 65. The couple has one child, Sam, 10. Sam will spend 80% of his time with Sally and 20% with John. John will cover Sam’s college expenses. The couple own a $450,000 house with a $90,000 mortgage. John proposes that Sally live in their house for eight years, while he picks up three-quarters of the housing cost. Meanwhile, John will buy a condo for $200,000. Sally will buy the same-priced condo when they sell their house, sharing the proceeds 50/50. John also proposes dividing the couple’s $200,000 in regular assets and $1 million in retirement assets in proportion to their labor earnings.

John wants to be fair. He figures that paying for most of Sally’s and Sam’s housing for the next eight years, covering Sam’s college expenses and housing and feeding Sam one-fifth of the time is highly generous. He also believes his and Sally’s living standards will be pretty similar once his much higher tax payments are factored in. So John proposes no alimony or child support.

Is John right? Will he and Sally be able to spend roughly the same amount over the rest of their days?

No, he’s wrong. But by playing around with the numbers and the software they can arrive at an agreement that works for both of them.

John’s proposed settlement lets him spend $83,215 annually and Sally spend $23,353 annually (measured in today’s dollars) after covering all housing costs and taxes. There are lots of reasons for this big differential, including John’s higher salary, his large asset share and his receipt of higher Social Security benefits.

When Sally points out the large spending (living standard) difference, John offers to split all assets 50/50. Now John’s and Sally’s annual spending amounts become $73,891 and $35,757, respectively.

Sally, who sacrificed her career to put John through law school and raise Sam, digs in her heels. “John, you need to pay alimony and child support,” she says. John agrees to $25,000-a-year in child support until Sam goes to college. Sally runs the computer program again and finds that John’s annual spending would now be $68,783 and hers would be $41,158.

Sally says, “John, sorry, but you wouldn’t be making five times my salary if it weren’t for me. There is no reason I should have a lower living standard going forward. If you pay me $20,555 each year in alimony and agree to the other things you offered, we’ll both get to spend the same amount each year: $54,836.”

John thinks this over and then counters with a $10,000 annual alimony payment, pointing out that his job is far more demanding than Sally’s. Sally, upon reflection, decides this is reasonable and the two hire a single attorney for one hour to draw up the agreement. Sally and John used economics to save their divorce.

How to Divorce Fairly

Couples don’t have to use this software to come up with equitable divorce agreements. You can also get a rough handle on your relative spending levels by comparing each spouse’s disposable lifetime resources.

To arrive at this number, you’d start by calculating your lifetime resources (the present value (how much a future sum of money is worth today) of your future labor, Social Security and other income including alimony and child support plus your current net worth. Next, you’d subtract the present value of your projected taxes, housing costs, expenditures on children and other expenses including alimony and child support payments. The difference is your spendable resources.

Do this for your spouse, too, and then divide by each spouse’s maximum remaining lifespan (use a calculator like this one) to find what each spouse will be able to spend annually. This is a rough calculation primarily because you’ll need to guesstimate your taxes and may mis-estimate your Social Security benefits, since they may be different in the future than what you expect today.

Source: www.forbes.com “https://www.forbes.com/sites/cdw/2017/09/21/three-organizing-principles-for-digital-transformation/#1900a7504da3”, Laurence Kotlikoff, 5/31/2017.

CHILDREN FROM CONFLICT

9 Tips for Protecting Children from Conflict during Divorce

It’s impossible to avoid conflict completely, but you can learn to control it. Here are nine useful tips for reducing the harmful effects of conflict during and after divorce.

There are several things parents can do to protect their children from conflict and reduce the harmful effects of long-term conflict during and after divorce. Some solutions require the aid of others, including the court. A parenting coordinator can help work out a plan as well as reduce conflict between co-parents.

1. Remove the Cause. Obviously, this is the best course of action, but it may require counseling or therapy. You need to examine your own role in feeding conflict; if there’s nothing you can do to end the dispute, you need to structure your life to decrease the violence. You should avoid fighting and playing mind-games. Children copy their parents’ behavior: they can become aggressive and show poor control of emotions.

2. Learn New Skills. Often, just going to a class will motivate parents. They will learn about the harmful effects of conflict. Hopefully, they’ll want to change – but to change, they must learn new skills. They must learn how to communicate without causing anger and how to listen to what is being said without judging. Parents need to work together and cooperate for the child’s sake. Books or videos about divorce and parenting can also help, and parenting skill classes are offered in many communities. These skills will help with many aspects of raising children post-divorce.

3. Keep Children Out of the Middle. Parents need to keep their child out of their disputes. Being caught in the middle between Mom and Dad is very stressful for children: the most powerful reason for a child to be maladjusted is conflict between the parents. Parental disagreements cause stress and suffering in a child; children often emerge in good shape from low-conflict break-ups, and they do better than those in an intact family with high conflict. Parents in conflict are poor role models, inconsistent with discipline, and inattentive – all of which creates stress for their children. Negative emotions between co-parents are carried over into their interactions with their children. After the conflict, parents are suffering, too; involvement with their child decreases and they cannot respond to their child’s emotional needs.

4. Control Your Emotions. Many parents go through regular cycles of emotion, from conflict to detachment. Feelings of anger, frustration, and resentment come and go – as do sadness, loneliness, and despair. Feelings of love, anger, and sadness have different effects, and some parents get “stuck” in one of these three feelings. Parents stuck in anger may endlessly seek revenge; those stuck in love may continue to hope to reconcile; and those stuck in sadness may become depressed, blaming themselves for all of the problems of the marriage. Parents need to learn to use non-violent language; most people respond well when given a positive message (something to do) and poorly when given a negative message (not to do something). Nonviolent Communication, by Marshall Rosenberg, explains this strategy (see the Center for Nonviolent Communication at www.cnvc.org). Good communication skills enable parents to react less emotionally in tense situations.

5. Prepare for Long-Term Conflict. Disputes continue for a long time post-divorce for most families, so parents should develop a plan that shields the child from conflict. The child will benefit if kept out of parents’ angry arguments. Co-parents should work hard to maintain their own and the other parent’s bond with the child, and they need to accept each other’s different values and parenting styles.

6. Contain Your Anger. Being cordial and formal will help keep your emotions in check. High conflict is usually temporary, so it is best not to decrease the child’s access to the other parent; it is more harmful for a child to lose a relationship with a parent than it is for them to be exposed to conflict for a short period of time. Decreasing contact between one parent and the child can lead to complete loss of contact over time, and children never get over the loss of a parent relationship – even as adults. There are good online programs that can help, such as Children in the Middle (www.divorce-education.com); parents can also work with a therapist or counselor. Mediators can also help reduce conflict by teaching parents to find ways to cooperate and agree.

7. Children as a Cause of Conflict. Sometimes, a child can make the fighting between parents worse. If a child has serious behavior problems or emotional problems, it adds to the burdens of the parents. If parents have trouble handling these issues, conflicts can arise or be aggravated. Of course, the child’s problems may be caused by the break-up or by the parents’ conflict; it can be difficult to know just what is causing what. The best solution is for the parents to agree on how to deal with the child’s problems: they need to be consistent across households, and they should support each other in front of the children.

8. Avoid Loyalty Conflicts. Loyalty conflicts, where a child feels pressure to choose sides, are the most damaging aspect of parental conflict. Most parents do not think they put their child in the middle of their dispute, but children say that they do. Some parents criticize the child for not hating their other parent, or act hurt when the child wants to be with their other parent. A child may not be allowed to talk about the other parent or to bring things back from the other house. The child may be quizzed about time spent with his/her other parent or about the other parent’s personal life.

A child will try to resolve loyalty conflicts in several ways, including:

  • having a separate but equal connection with each parent
  • trying to get the parents to be nice to each other
  • acting out, getting into trouble, or getting sick
  • becoming angels
  • retreating from both parents and turning to their peers
  • seeking comfort in alcohol, drugs, or risky sex.

Being caught in the middle is too great a burden for most children. The video, Children in the Middle, teaches parents to reduce the number of loyalty conflicts and the number of times the child is exposed to their arguments. The child learns to speak up when caught in the middle of parental disputes.

9. Arguing Constructively. It is impossible to avoid conflict completely, but you can learn to control it. Controlled conflict often leads to positive, constructive changes. Parents can learn to manage conflict, learn to compromise, and become more effective parents. When they do this, their child’s behavior improves.

Source: http://www.divorcemag.com, “http://www.divorcemag.com/articles/protecting-children-from-conflict”, Donald A. Gordon (Ph.D.) and Jack Arbuthnot (Ph.D.), Updated: November 12, 2015.
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