Couples Questions

Q: We want to be fair but we are unsure of the best way to split-up the assets so it is fair to both. How do we do that?

A: 50/50 division of assets does not necessary mean equitable or fair.  Each spouse will have different needs after the divorce.  One spouse may need more cash after the divorce while the other may need more retirement funds.  One spouse may want the house while the other would rather have cash accounts. Both short and long term needs of both spouses should be considered when dividing the assets and debts.  A divorce settlement should fit the needs of each and every member of the family today and in the future.

 

Q: My spouse and I have made the decision to divorce, where do we start when it comes to the finances?

A: You will need to make a list of all your relevant financial information.  The list should include all of your assets and debts and their approximate values.  You need to also make a detailed worksheet of all your monthly expenses.  This expense worksheet should have about 140 items on it including housing, transportation, insurance, children, medical, personal, insurance, etc.  Make copies of the previous three years tax returns and any recent financial statements, i.e. bank statements, credit cards, etc.

You can get started by using the complimentary divorce starter kit.

 

 Q: Should we keep the house or sell it?  

A: This is probably one of the most difficult decisions to make in a divorce.  Some reasons you may want to keep the house is if there are children involved and you want to maintain some sense of normalcy or keep them in the same school district.  Another reason may be that the housing market is in slump and by waiting you may get a better value. There are also negatives to keeping the house such as wanting to cut emotional ties and be able to move on.   Keeping the house also may create too much of a financial burden.   You must also consider that the income that was available to maintain the house will now be cut in half.  

 

Men’s Questions

Q: What can I expect to pay in child support?

A: The court uses a Child Support Worksheet and Child Support Guidelines to decide how much child support to order. The factors used in determining child support are the gross incomes of both parents and the number of children.  Spousal support to a previous spouse and support of additional children are also considered.  To help calculate child support payments the state provides an on-line child support calculator.  If “the application of the guidelines would be unjust or inappropriate in a particular case” the judge does have discretion to make an adjustment to the awarded amount. For more information on establishing child support and the guidelines you can read Kentucky Revised Statutes Sections 403.211 and 403.212.

The child support guidelines get tricky when one (or both) spouses are an independent business owner who can control their wages. In this situation, it typically helps to bring in a financial or tax expert who can help determine the true potential income of the partie(s).

 

Q: Will I be paying spousal support (maintenance/alimony)?

A:  Spousal support is designed to help a lower-earning spouse or a spouse who has been out of the workforce entirely raising children or taking care of the household with the transition into becoming self-supporting.  Spousal support is based on many different factors including:

  • Need. Can you support yourself with earned income plus investment income?
  • Ability to pay. Does the payer of alimony have sufficient funds to pay?
  • Length of marriage. A long-term marriage (ten years or more) is typically a stronger case for the lower-earning spouse.
  • Health of both parties

Q: What if I brought a house into the marriage that was in my name only – but after we married, I added my spouse’s name to the deed?

A: In this case, the whole house could be considered marital property. You might have made a “presumptive gift” to the marriage and should consult with a family law lawyer to discuss your options.

 

Women’s Questions

Q: I’m the custodial parent. Should I keep the house?

A: In many divorces, what to do with the marital home is one of the biggest decisions and in many instances negotiating to retain the marital home when you can’t afford it is the biggest mistake.   It is important to pinpoint exactly what it will cost to maintain the home, factoring in taxes and insurance. You must also analyze if there is enough money coming in to stay comfortable in the home (in other words, pay the bills each month and keep the house in good repair). Once that has been determined, the advisability of retaining the home must be compared to the advisability of giving up other assets (such as cash accounts, retirement plans, etc.).

 

Q: Will I receive spousal support?

A: Alimony is designed to help a lower-earning spouse or a spouse who has been out of the workforce entirely raising children or taking care of the household with the transition into becoming self-supporting.  Spousal support is based on many different factors including:

  • Need. Can you support yourself with earned income plus investment income?
  • Ability to pay. Does the payer of alimony have sufficient funds to pay?
  • Length of marriage. A long-term marriage (ten years or more) is typically a stronger case for the lower-earning spouse.
  • Health of both parties.

However, no two cases are the same. You need to seek individual advice in order to determine how the specifics of your case may impact your ability to receive spousal support.

 

Q: My spouse has a pension at his place of employment, am I entitled to any of the benefits?

A: Pensions and retirement plans are marital assets; generally speaking, the portion you earned during your marriage will be subject to division. However, it may be possible to keep your pension intact and have it offset with other assets.

 

Q: I have never worked outside the home. Can I get Social Security?

A:  If your spouse has worked and if you have been married for 10 years or more, than you are entitled to one-half of your spouse’s Social Security or your own, whichever is higher – even if you are divorced. Your spouse still retains 100% of his/her Social Security benefit. This is an automatic guarantee and therefore it is not a negotiation point in a divorce.

 

Q: Will I receive child support and if so how much will it be?

A: The court uses a Child Support Worksheet and Child Support Guidelines to decide how much child support to order. The factors used in determining child support are the gross incomes of both parents and the number of children.  Spousal support to a previous spouse and support of additional children are also considered.  To help calculate child support payments the state provides an on-line child support calculator.  If “the application of the guidelines would be unjust or inappropriate in a particular case” the judge does have discretion to make an adjustment to the awarded amount. For more information on establishing child support and the guidelines you can read Kentucky Revised Statutes Sections 403.211 and 403.212.

 

Q: I am on my spouse’s health insurance plan at his work.  What happens to my health insurance after the divorce?

A: COBRA is the federal law that entitles you to continue coverage in an employer’s group health plan, even if you’ve become ineligible to participate because of job loss, divorce, or the death of a spouse. If you were covered under your spouse’s employer-sponsored health plan policy prior to your divorce or legal separation, then you should still be entitled to continue coverage under COBRA.  However, the employer who sponsors the health plan no longer has to pay the premiums for this coverage; you will have to pay those costs.

 

Q: What if I brought a house into the marriage that was in my name only – but after we married, I added my spouse’s name to the deed?

A: In this case, the whole house could be considered marital property. You might have made a “presumptive gift” to the marriage and should consult with a family law lawyer to discuss your options.

Divorce Attorney’s Questions

Q: Why would I want to include a certified Divorce Financial Analyst to the divorce process?

A:  As a Certified Divorce Financial Analyst, my goal is to make the financial process easier and to help achieve the most advantageous settlement. I am trained to:

  • Produce powerful case exhibits in the form of spreadsheets and graphs
  • Give lawyers professional support to make sure they’ve covered all the financial “bases”
  • Provide litigation support to divorce lawyers
  • Serve as a financial expert on divorce cases
  • Analyze the financial implications of different divorce settlement proposals
  • Create a rock-solid personal financial analysis for the client
  • Make sure the client understands the short-term and long-term financial impact of different settlement proposals

 

Q: What benefit is it to the client to include a CDFA?

A: As a Certified Divorce Financial Analyst, I can help the client understand:

  • Separate vs. Marital property
  • Valuing and dividing property
  • Retirement and pensions
  • Options for the Matrimonial Home
  • Tax problems and solutions

Q: Won’t adding a CDFA just add another cost for my client?

A: By avoiding some common financial pitfalls in the divorce settlement, adding a CDFA may actually save money for the client in the long run.

Setup A Free Consultation

Top Reasons to Hiring a Certified Divorce Financial Analyst Before A Divorce

1. Financial analysis conducted early in the divorce process can save time.

The average length of the U.S. divorce process is one year. In the beginning stages of the process, both parties spend a great deal of time trying to get a clear understanding of the financial aspects and terminology of the separation. A Certified Divorce Financial Analyst professional can explain all financial aspects of the pending decisions and help to empower their client to make educated decisions throughout the proceedings.

2. A CDFA can help their client save money during the divorce process.

By using a CDFA professional, you can have a clearer view of your financial future. Only then can you approach a legal settlement that fully addresses your financial needs and capabilities. A legal settlement that floats back and forth between attorneys, without the client having a clear understanding of all financial ramifications, can be detrimental, time consuming and expensive. CDFA professionals can educate their clients by providing a thorough knowledge and understanding of the often-complicated financial decisions.

3. A CDFA can help his/her clients to avoid long-term financial pitfalls related to divorce agreements.

Working with a client and their attorney, a CDFA professional can forecast the long-term effects of the divorce settlement. This includes details of all tax liabilities and benefits. Developing a long-term forecast for their financial situation is far better than a short-term snapshot. Financial decisions must be made that not only take care of immediate family needs, but retirement needs as well.

4. CDFA professionals can assist their clients with developing detailed household budgets to help avoid post-divorce financial struggles.

A CDFA professional can help clients think through what the divorce will really cost in the long run and develop a realistic monthly budget during the financial analysis process. Expenses such as life insurance, health insurance and cost of living increases must be taken into consideration when agreeing on a final financial settlement.

5. Using a CDFA professional can reduce the amount of apprehension and misunderstanding about the divorce process.

Misinformation and misconceptions about the divorce process can be detrimental. Many have false expectations that they will be able to secure a divorce settlement allowing them to continue with their

accustomed style of living. Financial divorce analysis helps to ensure a good, stable economic future and prevent long-term regret with financial decisions made during the divorce process.


10 Common Divorce Money Mistakes

  1. Underestimating your expenses
  2. Keeping the house when you can’t afford it
  3. Not looking at the long term financial effect of a settlement
  4. Assuming that a 50/50 split of assets is a fair settlement
  5. Not understanding all the tax consequences involved in a divorce
  6. Not obtaining life insurance to cover maintenance and child support obligations
  7. Overlooking a Qualified Domestic Relations Order (QDRO)
  8. Not understanding your liability for unsecured debt
  9. Deciding financial issues one at a time
  10. Accepting an offer just to get it over with