How To Divide It All Up?

When my ex-husband and I split in 1994 we were both 26 years old.

I had just taken the CA Bar Exam and was waiting for my results. Despite a lovely (and expensive) wedding fourteen months earlier we thought that cutting our losses, going our separate ways and chalking the whole affair up to a “starter marriage” was likely the best option. Notwithstanding some necessary and sophisticated wedding gifts (which according to Emily Post need not have been returned as we had made it past the one year mark and had already sent literally hundreds of hand written thank you notes), a financed Jeep Wrangler, our Staffordshire Bull Terrier, Raul and a futon that had travelled with me from Berkeley after college, we did not have much in the way of assets to divide. In terms of debt we had some credit cards to pay off and we each took one and the airline mileage plan miles that came with it and called it a day.

Prior to moving out of our rented house in Laurel Canyon we each inventoried the items we wished to take with us to our new, smaller, rental residences. Having taken a community property course in law school and being the daughter of a divorce lawyer I knew a bit about the character of our belongings.

Anything one brings into the marriage (i.e.: my futon) is separate property and stays with the person who brought it.

The separate property characterization also attaches to anything which is given to you alone as a gift, an inheritance or earned after the parties separate but before the division of assets or divorce is final (for example, if parties separate and one party writes a song filled with sorrow, despondence and heartbreak about the breakup that song (melodramatic or not) is separate property and if it hits the Billboard charts the person who wrote it receives the spoils as opposed to the one who inspired it simply based on the timing of when pen was put to paper. In CA, community property is defined as anything produced or procured, during the marriage with funds earned during the period.

So back to the point, how to divvy it all up? In the case of my ex and I, for better or for worse, we didn’t have much. Our bank accounts were sparse and beyond the Jeep we were still paying off, we had no real assets of monetary value. Completion of the necessary court forms on which we listed the few assets we did have didn’t really take specific furniture, furnishings, appliances and personal property into account.

I knew he had his eye on our dining room table and six chairs. I wanted our bed and luxurious Frette sheet set (a wedding gift from one of his parents’ European friends and nothing I was likely to be splurging for on my own anytime in the next decade). We alternated taking turns with our stuff like picking teams for a game at recess. As we chose items we tagged them with post it notes, blue for him, yellow for me so that we could keep track and make it easier for the movers who would be there later that week. Each of us kept our own clothing and jewelry/watches. I kept my mother’s china (which I have still never used) as it fell into the separate property category and we had a minor setback in the amicable division when we came to the fancy espresso machine received as a wedding gift but never used. This was resolved by a coin flip (he won) and double item pick on the next turn by me.

The general rule is that each party receives property valued at the same amount.

List all of the items you are keeping on one side of a balance sheet and all of the items your spouse is keeping on the other (IOE provides our Community Property Balance Sheet as a part of the platform to make it easy) calculate the value of each party’s column and figure out how close to equally you have divided things up. If an adjustment needs to be made you can move an item or two, equalize by a cash payment or….here’s a novel idea…. let it go.
Important to note is that the value of an item is what you could get for it at a garage sale or on Craig’s List not what you paid for it.

I have seen couples take photo/video inventories of their household items, furniture, furnishings, appliances and art and resolve the division that way. Many insurance companies insist that you keep a list of your personal property so that is a good resource as well. Remember, it is just stuff and the vase or candle stick you are fighting for today will likely not bring you nearly as much joy as you think it will. Let it go and buy another, newer, all-your-own version to enjoy. Almost everything is replaceable and with the money you are saving by not having to pay expensive attorneys to write $100 letters regarding $75 dollar decorative pillows you will have more to buy new furnishings.

For one of a kind items like memorabilia, photos and what I call “kid-art” there are amazing replication sites and services where I have seen clients reproduce full photo albums and walls of elementary school art projects. There is no need to fight over these items when you can each have your own version of Madison’s 5th Grade Still Life of Pear, Baguette, Bird and Wine Bottle. Books, DVDs and vinyl – what can I say, do these even get divided anymore in the age of downloading and streaming? If so, same premise, be cool. If you guys do this well, you can always call up and ask to borrow the Metallica, Master of Puppets album later in life.

Source: https://www.itsovereasy.com/insights/how-to-divide-it-all-up

How to Provide for the Kids Post-Divorce

If you think providing for your children after divorce is basically about diapers, dentistry, and diplomas, you're in for a life of surprises.

Whether you’re supporting preschoolers or those who have returned home after college, experts say preparing for any scenario and putting everything in writing is the best way to defuse potentially explosive situations in the future.

Helene Bernstein, a Brooklyn-based divorce attorney with more than 20 years of experience in family law, says even small items can cause big problems.

“Little things that couples argue about and they don’t think of is who pays for the children’s clothing? Does the clothing travel with the child? Who pays for the birthday gifts? They get expensive. When they’re little, they go to a lot of parties,” Bernstein says.

Other considerations such as orthodontia or therapy, should the child need them, are important to take into account. If a child is diagnosed with a medical condition, parents should think about how they would handle treatment and the possibility of unreimbursed medical expenses.

“When a child has attention deficit disorder a lot of people disagree on whether medication should be administered, and that’s a really big thing,” Bernstein adds.

The lawyer and mediator recommends that parents renegotiate their agreements every few years because children’s needs change as they get older. One thing she advises clients do immediately is change their beneficiary information.

Growing Pains
Lili Vasileff, certified financial planner and president of the National Association of Divorce Financial Planners, in Greenwich, Conn., says that while basic child-related expenses are included in a budget intake form that is part of divorce negotiation, many people don’t think to plan beyond their child’s current age.

“If you’ve got a 3-year old, when they’re 16 they’ve got driver’s ed, auto insurance, or the prom,” Vasileff says. “Bar mitzvahs, or let’s go a bit farther, college applications are like $250 a pop, and who’s going to pay for the child traveling to go see those colleges? All the things that are prospective, that occur on an if-and-when basis, are generally left unaddressed. It’s up to the parents to discuss how to address those costs. Leaving it open results in a lot of misunderstanding, miscommunication and acrimony.”

Jeff Landers, founder of Bedrock Divorce Advisors, LLC, agrees. He says if a child has been taking violin lessons or gymnastics and the money is there, most courts will try to maintain the status quo for kids. However, there are plenty of gray areas within those extra-curriculars that can cause trouble.

“You can choose an $8,000 summer camp or go to the Y. If you talk just about the nature of the expense but not the character of it, then you’re setting yourself up for all future arguments which the child realizes that they’re the cause of, and that is very, very difficult,” adds Vasileff. “Unless you’re working with an expert during this process who can really pull the threads on each one of these areas to help you think in the future or at least has enough experience to say, 'these are the things that can come up,' how are you going to address these things head-on when they happen?”

Jodi Paige, a divorced mother of two, says she and her ex-husband agreed on the number of enrichment activities that will be covered and have a contingency plan in place for dividing expenses beyond that number.

“I pay for the first two classes and then anything else that they want to do, my ex pays 50 percent of the cost of that,” says Paige. “The state guidelines are pretty low, so if you live in an area where classes are more expensive, make sure your agreement reflects that.”

The College Years
While big-ticket items such as college tuition may seem fairly straight forward, the devil is in the details, say financial planners who specialize in divorce.

Landers says it’s essential to ask what’s included because if you don’t negotiate it up front, then “good luck trying to get it after the fact.”

“Is room and board included? Is a computer for the child’s use included in that? Does it include traveling back and forth?” Landers says. “You really need to get into the nitty-gritty details, and I’ve seen some agreements that will state, ‘I will pay for a state school but if the kid wants to go to a private school or an Ivy League, not my problem.’ A parent may say I’m not going pay unless the child maintains a 3.0 GPA, since it’s not a legal requirement, it’s very much up to the negotiations between the parties.”

He adds that some agreements may include a “cap,” whereby a parent will be on the hook for no more than the state university charges.

Boomerang Bucks
Paige also recommends including a stipulation that if one parent’s finances significantly improve, the amount contributed toward college be raised accordingly.

“Situations change, and everything needs to be very much spelled out,” she says.

The Boomerang Generation
Vasileff points out that even after paying for college, many parents are still supporting their adult children.

The good news, she says, is under Obama healthcare, coverage continues until age 26. But parents usually don’t think about is who is going to pay for an adult child’s healthcare should he or she be unemployed.

Vasileff says the boomerang generation, the group of adults who return home to live, poses a whole new set of issues for divorced parents.

“When you have adult boomerang children who come back to live with you, how do you set the rules? Are they supposed to pay rent; are you supposed to pay for their groceries?” she asks.

According to a U.S. Census Bureau report, the number of men ages 25-34 living with their parents grew from 14 to 19 percent between 2005 and 2011; the number of women rose from 8 to 10 percent. 

While most people to some extent address the cost of college, Vasileff says few plan for those kids who take a year off or return home without any plans to leave.

Second-Family Complications
Experts agree that counseling for all parties also bears consideration. Providing the least disruptive environment possible is also important.

We got an apartment and for the first nine months, my ex-husband and I went back and forth and the kids stayed in the house,” explains Paige, who's been divorced since 2006. “It was important for them not to leave their safety zone and we got a feeling for how tiring and crappy that was. It’s a good perspective thing for parents.”

Vasileff also recommends parties discuss what would happen in the event that one or both parents have new families, which she says is something very few people think about unless one party already has a serious new partner.

Paige suggests discussing what will be left to the children after the parents are deceased, especially if children from new marriages enter the picture.

“Don’t leave things vague. Things change, especially when a person gets a new significant other,” Paige says.

While no one can see into the future, anticipating expenses and deciding how to divide them can make things a lot less contentious down the line.

Source: https://www.cnbc.com/id/46797194

How To Create Absolute Marital BLISS — With Blended Families

Bonus children, FTW!

When it comes to dating for re-singled (a.k.a. divorced) parents, odds are that the people you're dating will have kids of their own, too. Thoughts of entering into a serious relationship or even remarriage gives many re-singled parents cause for pause if not outright alarm because we've all heard the stories about evil stepparents since we were little (thank you, Cinderella!).

But that's not how it has to be! With a bit of work, It's possible to create successful blended families.

My husband and I met online through eHarmony. The picture he used for his profile was an adorable one of him with his youngest son (now my bonus son). When we had our first date, one of the things I asked him about was his kids.

Boy, talk about a conversation killer! He made it clear that he didn't want to talk about them. I laughed a bit when he told me this and told him that he should probably consider changing his profile picture in light of that! Luckily, we found other things to talk about and wound up enjoying our evening.

What I didn't know then was that his first attempt at a blended family didn't turn out well. His refusal to talk about his kids was just his being protective.

Luckily, we've been able to avoid some of the missteps of his first attempt at a blended family. Through some trial and error, we've been able to create a successful blended family.
You can create a successful blended family, too. The number one thing you need to know?
Successful blended families don't "just happen" — they take work and planning.

Before you enter into a serious relationship or remarriage, it's important that you spend some time with your new significant other planning what type of life you'll have together, before you dive into that life.

In addition to planning your dreams of happily ever after, you'll want to agree on parenting styles, discipline styles, and lifestyle (yes, I did say "agree" and not "compromise". Successful blended families require partners to be on the same page in these critical areas.)
Once you've reached agreement, you'll need to consider each of your children, their personalities, and how different these styles of parenting, discipline, and living are from the way you're currently doing them.

Will the changes be large or small for each child? The smaller the changes, the more easily the child will be able to adapt. If the changes are large, you'll want to consider making the changes gradually before blending your families full-time so each child will have the fewest obstacles to overcome in making the blended family a success for them, too.

No matter how carefully you plan or how easy you try to make the transition, it's really normal for the kids to have different plans. These different plans are usually based on confusion and fear. It's also normal for kids to feel jealous of their bonus family members. And it's fairly typical for kids to feel angry about your remarriage because it messes up their dream of Mom and Dad getting back together again.

The five best things you can do to help all the kids involved are:

1. Be clear about expectations and boundaries
2. Communicate regularly as a family about family issues and with each child about what they're feeling and what's going on in their lives
3. Let each child know you support them in loving their birth parent and that your new spouse is their bonus parent
4. Take time every day to spend time one-on-one with each of your children and offer the same to each of your bonus kids
5. Do fun things as a family

For most re-singled parents, their kids are a top priority, but successful blended families aren't built on being great parents and making the kids happy. Successful blended families are built on marital bliss!

Marital bliss also needs to be planned for. You'll need to plan for and schedule alone time for dates, vacations alone together, loud sex, and even just walking around the house naked.

The one thing that can help the most with all this is getting the kids on the same custody schedule as much as possible. That way you can regularly have kid-free weekends to focus on each other, connect, and strengthen your marriage without the demands of parenting. It's from this base of a strong marriage that the success of your blended marriage must be built.

Creating successful blended families does take planning and the best plans include heaping helpings of communication, respect, commitment, and patience.

Try this Functional Divorce Assignment to get your planning off on the right foot:

• Spend some time dreaming together about what you want your life together to be like. Make your dreams as specific as possible. By being specific about your dreams, you'll both know when you're on-course and when you drift off-course so you can correct things more quickly.
• Talk about your parenting styles, discipline styles and lifestyles. Be completely honest here. I know one couple who didn't have completely honest conversations about parenting and discipline styles before they got married. The result was that the first time the new wife saw her new husband's parenting style and non-existent discipline style with his child she told him that she wouldn't have married him if she had know this before-hand. Luckily, they've been able to work it out, but it would have been so much easier to do before they blended their families.
• Consider each child's potential reaction to having a bonus family. Each child has their own personality and will react differently to having a bonus family. By working together you and your new spouse can help to make the transition into your blended family be easier for each child.

Source: https://www.yourtango.com/experts/dr-karen-finn/dating-after-divorce-consider-blended-families

Financial planning in divorce

We explain the options available when splitting your assets

Divorce is a highly stressful time when emotional pressures are compounded by difficult financial decisions that can have implications for many years to come. We’ve spoken to the experts to find out what you need to consider when dividing up your home, pensions and investments.

The family home

Your house is likely to be your most significant asset and deciding what to do with it can be challenging. Couples who want a fresh start often choose to sell the home, split the proceeds and use this money to buy new properties.

James Corcoran, a financial planner at 1825, Standard Life’s financial planning arm, says issues can arise if the proceeds aren’t sufficient for both parties to buy properties that meet their needs. This is particularly a problem if either party is unable to secure a mortgage such as when there is a spouse that doesn’t work and/or they can’t afford to pay separate housing bills.

‘This has become more of an issue in recent years post the financial crash as mortgage lending criteria has severely tightened,’ says Corcoran.

Another option is for one party to retain the family home – particularly if children live there – while the other takes a bigger proportion of the other assets.

The courts used to decide that the woman and her children would stay in the home while the husband took out a mortgage on a property elsewhere. Following the Mortgage Market Review, which introduced very strict ‘affordability’ criteria, it isn’t as straightforward.

‘If the husband is asked to pay maintenance their ability to buy a new place is curtailed. The wife might have to accept a smaller chunk of the house or less maintenance,’ says Kay Ingram, a director at national advice group LEBC.

It’s also possible for one party to buy out the other party’s share, which could necessitate a new mortgage.

Investments

In England and Wales investments are usually split 50/50, whereas in Scotland the courts look at the assets that were acquired during the marriage.

Corcoran says when couples are dividing up different types of assets they need to consider access to funds, charges and tax implications. All investments are treated differently for tax and need to be reviewed to ensure they’re still appropriate. For example, unit trusts and shares are liable to capital gains tax on encashment, whereas encashing investment bonds can result in additional income tax.

‘Complicating factors often come into play – for instance let’s say one party has an ISA and the other party has a drawdown pension, both worth £100,000 each,’ says Corcoran. ‘You would think they would be worth the same and cancel each other out, however when dividing up assets for divorce the ISA may be deemed to be worth more. Any withdrawals would be tax-free, whereas any income over and above the pension commencement lump sum from the drawdown would be taxable. All these issues need to be considered carefully.’

Divorce proceedings themselves could decimate the level of your investments and pensions, which could throw your financial plan completely off track. Patrick Connolly, certified financial planner at Chase de Vere, says this will be most problematic for older people who have less time to make up any shortfalls.

‘Following divorce, people should take an entirely fresh look at their finances,’ says Connolly. ‘They need to review what assets they still have, their new level of disposable income and then what steps they need to take to get their financial planning arrangements back on track. In many situations this can be a long and painful process.’

LEBC’s Kay Ingram says it’s extremely important to fully disclose all your assets during divorce proceedings – otherwise you’ll be held in contempt of court and could face jail. The courts will also look less favourably on you when deciding the settlement if they discover you withheld information.

Pensions

There are several ways in which pensions can be split at divorce, but the three most common are offsetting, earmarking and sharing.

Pension offsetting is where the value of your pensions is offset against other assets that you own. For example, in exchange for keeping your pensions, your ex-partner could get a larger share of the family home or share portfolio.

The advantage of offsetting is its simplicity, but there’s a danger that if a non-working spouse receives more of the property and less of the pension they could end up with no funds to live off.

Pension earmarking is an agreement that when you start to draw your retirement benefits, a portion is paid out to your ex-partner. If you receive £50,000 a year from your pension and the agreement is to split this equally, your ex-partner would receive £25,000 a year.

Joshua Gerstler, financial adviser and company director at financial advice firm The Orchard Practice, says the disadvantage of earmarking is that if you die before taking your pension, your ex-partner could receive nothing or, if the pension does not grow, less than expected. The ex-spouse has no control over where the pension assets are invested.

‘Some couples do not like this method as it keeps their finances entwined when they are looking for a clean break,’ Gerstler adds.

Pension sharing is when the court sets out what amount of your pension your ex-partner is entitled to. It is usually expressed as a percentage of the transfer value. Normally your pension provider will want your ex-partner to transfer this into their own pension.

Pension sharing gives more control to the ex-spouse than earmarking because they are able to manage the investments and choose how and when they take the benefits.

‘Once again you need to be careful as some pensions have other benefits, such as guaranteed annuity rates that could be lost on transfer, so these need to be carefully considered. Also, where the spouse is younger they will not have access to the lump sum/income until they turn 55,’ Corcoran says.

David Trenner, technical director at Intelligent Pensions, says consideration needs to be given to spouses’ differing attitudes to investment risk and their requirement for flexibility in their pensions.

‘An ex-spouse who does not want to take risks but just wants a guaranteed income could be disappointed when she finds that her ex-husband’s scheme will only allow her to transfer the value of a pension share into a personal pension where she must take investment risk as well as inflation risk and mortality risk.

‘Conversely, an ex-spouse who wants to have flexible income and be able to control the investment of their pension will be disappointed if the only option is to get a guaranteed pension from her ex-spouse’s scheme,’ he explains.

Planning ahead

It’s essential that you decide how your assets will be split before you receive your decree absolute (the court order that officially ends your marriage). On death pensions are paid to the dependant spouse, not ex-spouse, so if the main pension holder dies and an agreement hasn’t been finalised the other party could be left with nothing.

If you have life assurance or death-in-service benefits which name your ex-spouse as the beneficiary these should be updated. You should also ensure your will and/or power of attorney is up-to-date after the divorce.

Source: https://www.youinvest.co.uk/articles/sharesmagazine/92152/financial-planning-divorce