The Twelve Financial Pitfalls of Divorce Each year nearly 2.6 million men and women go through the emotional and financial trauma of divorce Jacqueline Thornhill CFP® CDFA™ - President, Landmark Divorce Solutions -

Saving You Thousands in Legal Fees I can help you get to the point of gavel down, with a amicable financial settlement and a reason to look forward towards a more stable future. Photo by Fotolia Caption and Photo Credit: Use thisspace to provide credit to the original photo or graphic creator and provide context on its meaning

TABLE OF CONTENTS Introduction Pitfall #1 Not Enough Cash Pitfall #2 Too little Preparation Pitfall #3 No Records Pitfall #4 Overlooking Assets Pitfall #5 Ignoring Tax Consequences Pitfall #6 Ignorance is Bliss Pitfall #7 Mixing Money and Emotion Pitfall #8 Not Fighting for What’s Yours Pitfall #9 Not Taking Control Pitfall #10 Not Being Ready for the Worst Pitfall #11 Not Developing a Career Pitfall #12 Not Getting Good Professional Advice

Introduction An except from the seminar Second Saturdays Las Vegas What Men and Women Need to Know About Divorce Men and women are concerned about financial survival. There is a prevailing assumption that the wife “takes the husband to the cleaners. Studies show that in the first year, the wife’s standard of living may drop almost 27 percent while the husband’s may increase by as much as 10 percent. Many factors contribute to a women’s lower standard of living after divorce. Child support may not be adequate to cover the true costs of child rearing, and she may have lost years of career building as a stay-at-home Mom. Men of course are experiencing these factors more and more today. Advance planning goes a long way. Here are the 12 pitfalls to avoid.

PITFALL 1 Not Enough Cash Expenses will begin to mushroom as the divorce process starts. Legal fees, court costs, therapist bills, new living expenses, an many other costs which will drain your financial resources. Money previously use to support one household, now must stretch to support two. If you are contemplating divorce, now is the time to begin amassing the funds you will need to stay afloat. New thinking: “I and me, no longer we and us”

PITFALL 2 Too Little Preparation Divorce is a long, complicated process that requires careful preparation. Consult with legal and professionals early on. Think about the timing of the separation: Is your spouse owed a bonus? Separate after it arrives. Think about Social Security. You must be married 10 years to collect on the ex. Finally, don’t just pack the kids in the car and drive away in a car that needs a lot of service work. Fix the car or whatever else before you separate. Buy needed clothes, fix the kid’s teeth, and save some money etc.

PITFALL 3 No Records The three most important words during divorce are: document, document, document. Try to obtain copies of all financial records before the divorce begins. Make a clear copy of all the last 3 years of tax returns, loan applications, wills, trusts, financial statements, banking information, brokerage statements, loan documents, credit card statements, deeds to real property, car registration, insurance policies and inventories. Also, copy records that can be used to trace separate property, such as a family inheritance. These assets will remain yours if you have proof. Copies of business records. These will help if assets are hidden.

PITFALL 4 Overlooking Assets Don’t overlook any assets, half of everything is yours! Even if it is an asset you do not want, it can be used trade for something you do want. Inventory safe deposit boxes, track down bank and brokerage accounts; review pay stubs, retirement plans, and insurance policies. If your spouse’s business generates a lot of cash, look to a forensic accountant to look for signs of additional income. Don’t overlook hobbies or side businesses that might have expensive equipment or might generate income. If you have a PHT degree “Putting Honey Through” you might be entitled to some reimbursement for tuition costs.

PITFALL 5 Ignoring Tax Consequences Should you take a monthly alimony or a lump sum? Should you take the brokerage account or the retirement plan. Should you keep the house or sell it now? Who should pay the mortgage until it sells? Don’t ignore the hidden tax costs of divorce in making these decisions. Your situation may need a CDFA™ to see if you are getting the best deal. And, if your previous tax returns omitted or understated deductions, you may seek protection, known as the innocent spouse rule if the IRS conducts an audit.

PITFALL 6 Ignorance is Bliss Divorce is certainly not bliss, instead it can be very expensive. Don’t be a passive observer of your own divorce. Doing as much as you can will help you recover more quickly because you will have a healthy sense of control over the process. Focus on practical things, and work with your ex to get things done. Take an active role in the negotiations and don’t “leave it to the attorneys.” You will have less conflict, less need for lengthy litigation, better compliance with your ex and better sharing of information about the kids. Your attorney will give you legal advice, he or she works for you and the decisions are ultimately up to you.

PITFALL 7 Mixing Money and Emotion During this trying time, it’s easy to confuse your feelings with the facts. Try to be as dispassionate and businesslike as possible. View your attorney as a paid professional rather than a friend or confidante. When your grief is overwhelming, go home or to a friend’s house, not your attorney, who will bill you at the going rate. Make property division decisions based on your own long-term best interest and not out of revenge. It won’t make you happy to declare war on your ex. Make an effort to be a amicable as possible. A nasty divorce only benefits the attorneys.

PITFALL 8 Not Fighting For What’s Yours Women tend to be supportive and sensitive to the needs of others. They want to “make nice.” These tendencies often get in the way during a divorce. Divorce is about survival, not making friends. You must insist on what you need and deserve. Even if you think you will may reconcile, don’t bend over backwards to make it happen. Stand up for yourself and get your share. If you reconcile, fine. If you don’t you will still be able to care of yourself financially.

PITFALL 9 Not Taking Control Going through a divorce can sometimes make you feel like the captain of a leaky boat on stormy seas, there seems to be a crisis at every turn. Use this time of upheaval to start taking control of your life. Vow never to worry in the dark-if you can’t sleep, turn on the light, pick up a pencil and paper, and write down your worries. Then, go back to sleep and deal with them first thing in the morning. Also, try to get a lump-sum whenever possible so you control the cash. Listen to your attorney, but make your own decisions. This is your divorce-so take control of the process.

PITFALL 10 Not Being Ready for the Worst During divorce, prepare yourself mentally for the worst that can happen. How will you cope if your children get sick? If you have to move in with your parents? If the divorce lasts for years and you lose all of your money? If your ex remarries within two weeks, moves to Tahiti, and/or refused to pay any support? Plan for the worst so what actually happens will seem easy by comparison. Don’t panic and let fears rule your life. Face them and take control.

PITFALL 11 Not Developing a Career Many women put their careers on hold to concentrate on their families. After divorce, you will likely need to figure out a way to support yourself and your children. Divorce is an excellent time to get some career counseling at the local job center, university, or community college. Prepare for the expense of tuition and books while you get your career on track. Remember, there is nothing like new knowledge and a fulfilling career to boost your self-esteem.

PITFALL 12 Not Getting Good Professional Advice Right now, you need all the help you can get! Divorce can be very complicated, so DON’T try to do it yourself. Hire an attorney who can give you excellent advice even if he or she isn’t the most in expensive. Request a tracing of assets if you think there are some being hidden. Find a good therapist to help you emotionally. Hire divorce financial professional to help determine the best settlement options for you. Don’t skimp now on matters that will affect you for the rest of your life.

“ When one door of happiness closes, another opens; But often we look so long at the closed door, we do not see the one which has been opened for us. ” Source: Helen Keller

Special Offer Half Off Consultation Call me at and schedule a 1 hour consultation at $100 which will be applied to your retainer if you decide to hire me. We can meet-face-face, on the telephone, or online. A Publication of CHATNOW