Untying the Knot: Special Divorce Issue
- 1. Untying the Knot: Special Divorce Issue Welcome to the latest edition of fiscal fitness! September is one of the best times of the year at the Jersey Shore. It’s also a time of change for many individuals. Working with so many divorcing clients over the years, I have seen many mistakes that might have been prevented had someone been helping with the finances during the process. As a devoted advocate for the collaborative divorce model, I work very closely with clients helping them achieve fair and workable divorce settlements. Let’s take a closer look at some of the questions and concerns I hear from both parties. How do I evaluate my settlement so it makes sense for me? Remember, your attorney went to law school and specialized in family law, not financial planning. Does your attorney have access to specialized divorce computer models that can produce comprehensive and realistic analyses of your current lifestyle and how it will look post-divorce in 5, 10 or 20 years down the road? When working with a client, I look at many factors such as future income, budgets, maintenance, child support and dependency exemptions, taxes, pensions and retirement plans, investments and educational expenses. With so many moving parts, how do you decide what makes sense now and for your future? Should I keep the house? One of the biggest problems I see is a spouse being emotionally attached to the marital home (a non-liquid asset) and trading that off in lieu of another marital asset such as an IRA or a pension. Although this trade off might make sense on a yellow legal pad, understanding the long-term implications and how it fits into your overall financial plan isn’t easy when emotions are running high. Too often I hear “I will keep the house and deal with it later.” Later may be too late, depending on the age and income level of the recipient. Am I entitled to continue coverage from my former spouses’ group health plan? Yes, under COBRA, a covered spouse may continue their plan coverage for a limited time when they would otherwise lose coverage due to a particular event, such as divorce (or legal separation). A covered employee’s spouse may elect continuation of coverage under the plan for a maximum of 36 months. The ex-spouse (a qualified beneficiary) must notify the plan administrator of the qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA continuation coverage. What are the rules on receiving Social Security from my ex-spouse? This question comes up all the time. Generally speaking, to be entitled to spousal benefits, you need to have been married for 10 years and currently unmarried. • You can receive benefits on your ex-spouse’s record even if he/she is remarried. • Your decision to collect on your ex-spouse’s earnings history will have no impact on the size of his/her benefits or those of his/her current spouse. • One individual can have multiple ex-spouses collecting on his/her earnings history, provided he/she was married to each spouse for at least 10 years. Your ex probably won’t know you are collecting benefits off of his/her earnings record unless the SSA (Social Security Administration) needs to contact your ex for additional information. I look at money as a tool to accomplish some of life’s goals. If you have never taken an active role in how the finances were managed during your marriage, why would you make such difficult financial decisions on your own during a divorce? Working with an experienced professional, trained and certified in divorce financial planning, can help the family achieve long-term financial success. I can help… 2424 Route 34, Manasquan, NJ 08736 800-995-4534 www.harborlightsfinancial.com Debra Fournier Certified Financial Planner™ Certified Divorce Financial Analyst™ This information should not be construed as specific tax, legal or investment advice. Investing involves risk, including possible loss of principal. Securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FIRA/SIPC About the author Debra Fournier, CFP®, CDFA™ is a Principal of Harbor Lights Financial Group, Inc. in Manasquan, N.J. She has been providing comprehensive financial planning and investment advisory services for two decades. As an experienced Certified Financial Planner™ professional and Certified Divorce Financial Analyst™, her divorce planning services are especially productive where there are complicated financial issues, significant assets or an imbalance of knowledge between the divorcing couple. Debra currently serves on the executive board of the Jersey Shore Collaborative Law Group and the Academy of Finance at Manasquan High School. She participates in the mentoring program at Monmouth University and is a member of the Association of Divorce Financial Planners and Institute for Divorce Financial Analysts. She has been quoted in Kiplinger’s Personal Finance Magazine and AOL Daily Finance, has appeared numerous times on Good Day New York and has been featured in the Asbury Park Press section Getting Ahead. For a private, no-obligation phone consultation, please call 800-995-4534 or email debra.fournier@hlfg.com advertisement Fiscal Fitness