Clients are increasingly asking, “Can I afford a divorce?” or "Should I get a divorce?" Maybe, mediation is the way to go. If you've decided, a CDFA can help you plan for the new you.
2019 will be the year of greatly anticipated Retirement Tax Reform. There have been multiple bills and proposals affecting Retirement Reform facing both houses in Congress. Among them are: • RSSA – Retirement Security and Savings Act of 2019 • RESA – Retirement Enhancement and Savings Act • SECURE – Setting Every Community Up for Retirement Enhancement Act of 2019 Each chamber (the Senate and the House of Representatives) will vote on their respective bills. After achieving affirmative votes, members from each house will form a conference committee to meet and work out the differences. A common theme in these Congressional Proposals is to delay retirement by allowing us to save for a longer period in order to meet the demands of our increased longevity and higher lifestyle expectations. Two very important proposals are: 1. To increase the RMD (Required Minimum Distribution) age from 70-1/2 to 72 (or possibly 75). 2. To remove of age limitations for Traditional IRA Contributions (allowing retirement contributions to continue as long as you wish beyond age 70) But how will these proposals affect our divorcing clients and how they mediate settlements? Splitting retirement assets and providing for retirement are primary drivers in divorce mediation, particularly for “Grey Divorces” (marriages lasting more than 20-years). I anticipate new expectations and discussions centering on later retirement ages and our ability to increase our savings that will become an important part of future divorce negotiations. Attorneys often use Social Security’s eligibility age as the benchmark for retirement. This is going to change. For example, 1. What will be final effect on a settlement agreement if the obligor or recipient is expected (or required) to continue full income for an additional 2-4 years as part of the agreement? 2. How will the increase in retirement savings affect taxation and net-income in future years when discussing the need for future support? 3. How much longer will the continuing employment, alimony or its savings allow the resident spouse to stay in the house? As a Certified Divorce Financial Analyst® and Divorce Mediator, I help my clients and their attorneys to find the most tax-efficient settlement. This often leaves them with more money in their pockets. While there are no specific answers to the questions I listed above, clients deserve to understand the increased options and choices that a divorce financial planner can provide.
As a Certified Divorce Financial Analyst® and Divorce Mediator, I ask every divorcing client the following question: Do you want your “almost” ex-spouse to be responsible for your medical decisions in the event of an emergency? Most clients resoundingly answer, “NO.” Yet, the task of completing of new estate documents often ends on the bottom of an overwhelming “To-Do” list. I understand why. Divorce is a crushing experience. However, I must emphasize the importance of creating new estate documentation in a timely manner. This includes your new Will, Power of Attorney, Healthcare Directive (aka Living Will) and if applicable, the formation of Trusts. Children also require completed guardianship designations. I’ll use myself as an example. I am a cancer survivor of 8 years. However, in July of 2011, I was called out of a business meeting to receive a call from my physician. Fast surgery was imminent. The one consolation I had during this emergency was that I had my wills, health directives and power of attorney already prepared. I had to prioritize other issues. I don’t know what I would have done if I had run around under that much pressure to deal with executing legal documents! I am one of the lucky ones! Surgery was successful. I look forward to good health and close relationships with my family and clients for many years to come. However, as a professional Mediator and Certified Divorce Financial Analyst®, I feel so passionately about this subject that I include a special requirement in every Memorandum of Understanding that I write. It states that both parties that must complete new estate documents within 90 days of marriage termination. Beneficiary changes are often forgotten or delayed, so I also include this type of information within my documentation according to the agreements reached by our mediation appointments. I thank you for your kind patience. Please seek an estate attorney for further legal advice.
Can you negotiate your divorce at your kitchen table? Learn about how you can save money, time and aggravation through divorce mediation and a CDFA (Certified Divorce Financial Planner).
Here’s a quick list of 5 tips that will help you make your divorce mediation a success. This list contains short case studies that I have experienced during my role as a Certified Divorce Financial Analyst® and professional divorce mediator.