Amazon box manOne of the reasons that divorce is such a challenging life transition is its public nature. A couple might keep their problems private as they try to work through them. But if a rift opens that can’t be mended, the couple will have to share some very difficult news with friends and family as they separate from one another. Few of us will have to reveal emotional personal issues to as wide an audience as Jeff and MacKenzie Bezos recently did. The statement that Jeff released on Twitter suggests that he and MacKenzie are trying to make their split as amicable as possible by usin three insightful ideas that could help anyone struggling through a divorce.
  1. Be open and honest with those closest to you.
“We want to make people aware of a development in our lives. As our family and close friends know, after a long period of loving exploration and trial separation, we have decided to divorce and continue our shared lives as friends.” Couples need privacy as they deal with strains on their marriage. But once a decision is made, clear communication with your family, friends, and each other will be very important. That goes double if any young children are in the picture. The more open a couple is about what’s happening, the easier it will be for you to find the outside support that will help you through this transition. Good dialogue might also help you and your former spouse to focus on the essential tasks at hand, like dividing your assets and updating your essential estate planning documents.
  1. Be grateful.
“We feel incredibly lucky to have found each other and deeply grateful for every one of the years we have been married to each other. If we had known we would separate after 25 years, we would do it all again.” Shame, embarrassment, and guilt are common feelings associated with divorce. Playing the blame game or trying to “win” the divorce can quickly turn all those amicable best intentions into bitter personal and legal issues. Instead, the Bezos statement is a reminder that the end of a marriage – especially a long one – doesn’t erase all of the positive things that came before it. If an amicable divorce is possible in your particular situation, then don’t be ashamed or embarrassed. Cherish those precious shared experiences, like the birth of children, happy vacation memories, the difficult times you helped each other through. Embracing these feelings of gratitude will help ease both you and your partner through this process.
  1. Focus on the positives ahead.
“We’ve had such a great life together as a married couple, and we also see wonderful futures ahead, as parents, friends, partners and ventures and projects, and as individuals pursuing ventures and adventures.” When we work through the $Lifeline exercise, we emphasis that important transitions like retirement, children graduating, weddings, and yes, divorces, are ends in one respect, but also new beginnings. They’re the start of new chapters in your life. That might be difficult to see when the pain of a divorce is still raw. But it’s important to open yourself up to new opportunities when they present themselves. You’re about to start your single life all over again. And yes, it’s scary. It may not be what you wanted. And you may be bitter. But over time, you may be able to see what awaits you on the other end. It could be traveling that you’ve longed for. Maybe you’ll relocate, start a new career, begin new hobbies, and meet new people. You might have more financial resources at your disposal to explore solo than you did when you were younger and unmarried. And you might approach these experiences with a more mature and grateful perspective, enjoying every minute just a little bit more fully. We want to help you through all of life’s major transitions, the positives as well as the challenges. If there’s change on the horizon, make an appointment to come in and review the $Lifeline exercise with us. We can help you plan ahead so that the next chapter of your life is the most fulfilling yet.
182478021-cashflow-gettyimagesOne of the challenges of divorce is separating income that used to be joint income, along with separating into two households versus one. This is a recipe for cash flow drain for most couples.  All of the sudden the same income(s) that supported one household must now support two households. I want to share an example of how cash flow solutions can be achieved through the collaborative divorce process.  Assume we have a couple struggling to make their cash flow positive which is often the case with divorce.  A substantial strain on their living expenses is secondary private school tuition for two more years for their child. This amounts to approximately $15,000 for tuition the first year and another $18,000 for the second year.  They are attempting to make these payments from existing income.  The strain of these payments coupled with divorce has become unbearable.  The parents are both determined to keep their child in this private school through the eighth grade. Additional assumptions include this couple having a small first mortgage on their home.  This mortgage requires a monthly payment of approximately $1600.  In our example, we would research refinance options including home equity loans.  After researching options an acceptable bank loan could provide them with the flexibility needed to lower the monthly cash flow shortage from over $1300 to approximately $220.  While this does not completely cover the entire cash flow shortage, it improves it significantly. The parents could draw from other savings if needed to make up this shortfall or look to further reduce some expenses.   An agreement could include that each parent would pay one-half of the cost of the second year private school tuition.  They both would have the flexibility to pay their share of the tuition from income sources, from savings, or some combination of the two. Structuring this part of their plan allows them to accomplish several goals.  One is to keep their child in the private school for the two additional years until graduation.  Secondly, it allows one spouse to stay in the home until the child enters the public school system and graduates from high school.  At that time, the spouse retaining residency in the home could either buy out the other spouse’s interest in the home or the home could be sold with sale proceeds being shared between the two spouses. Not all cash flow challenges can be so easily resolved.  What makes this situation work is everyone knowing what the goals are and everyone working together to help the couple find solutions that are in the best interest of the family and their children. Collaborative divorce, with the use of selected experts in their fields, can help divorcing couples navigate difficult issues with money, children, relationships, and emotions.  To learn more about collaborative divorce visit and be sure to check out our blog site on a variety of topics at
180248003-rowing-teams-oars-close-up-gettyimagesDo you need a divorce team and if so who should be on that team? If you are going through divorce or plan to do so you should think about who you want to have on your divorce team.  Who you have on your team depends on the process you have chosen. If you are headed down the traditional litigated divorce path your attorney will be your lead team member and possibly could be the only team member. Oh sure you may bring in experts of your own and when you do experts of your soon to be ex will suddenly appear. This is unlike a collaborative divorce where neutral professionals are commonly utilized.  In mediations you may or may not have neutrals or you can also have experts, if you will, that are only on your side.  The difference is in a collaborative divorce the neutrals are working together with you and your spouse to help you reach agreements.  These agreements satisfy both of your needs and interests versus you both having your own experts refuting each of your positions with opposing viewpoints.  When this opposing positions scenario appears it requires some outside third party to make decisions for you since you and your spouse cannot make those decisions yourselves.  This ends up being a crapshoot and most likely results in decisions neither one of you are very satisfied with. In a collaborative divorce the entire team works together for the benefit of your family.  Who are the potential team members and their roles in a collaborative divorce? Attorney:   
  • Provides legal guidance, counsel, and advice to you
  • Supports you in resolving the areas of dispute that arise
  • Cooperates with other Collaborative team members to guide clients through the process
  • Works in joint meetings with both clients and the other attorney to create legal documents to necessary to complete the process
  • Are professionally licensed as attorneys
  • Helps clients effectively communicate during the process which can minimize conflict and lower cost
  • Helps to maintain a safe environment to discuss difficult issues with mutual respect
  • Helps you with advocating for yourself
  • Helps you minimize emotions to better manage reactivity to stress
  • Is licensed as a mental health professional or a Rule 114 qualified mediator
Financial Specialist:
  • Identifies and evaluates tax consequences
  • Assists clients with developing spending plans (budgets)
  • Develops current and future cash flow analyses
  • Helps clients/attorneys generate and evaluate financial options
  • Guides the team discussion on financial matters
  • Is professionally licensed as a financial expert
Child Specialist:
  • Provides neutral guidance and education to parents
  • Helps parents create “we statements” to talk with their children about the divorce or break up
  • Meets with parents and children to obtain developmental information, identify family strengths and identify goals to meet children’s needs
  • Meets with children to assess their hopes and needs for the future
  • Gives feedback to parents and professional Team members about the needs of children
  • Assists parents in the creation of a developmentally responsive Parenting Plan
  • Works with the Neutral Coach to strengthen parents’ co-parenting relationship
  • Is licensed as a mental health professional
Does every divorce require each of these team members? Not necessarily. A divorce with no minor children or a divorce from a very short-term marriage say less than three years for example, with few assets and liabilities may not require anyone other than an attorney. However, in divorces from longer-term marriages if minor children are involved, there are a number of assets, and liabilities it would make sense to utilize a child specialist and a financial specialist. If your goals and those of your spouse are genuinely concerned about future relational issues with your soon to be former spouse or extended family members, I encourage you to explore the use of a coach trained in collaborative divorce. A coach may be very helpful if you have concerns about challenging communication issues with your soon to be former spouse. The use of neutrals can be very cost effective. Neutrals are usually employed at lower hourly rates and in some cases significantly lower rates than attorneys. The value added benefit beyond the lower cost structure for using neutrals is they are experts in their respective fields. Attorneys are experts in the legal aspects of divorce not so much so in the financial, child development, and relational aspects of divorce. Only you can answer the question of do you need a team and if so who should be on that team. It does depend on the divorce process you choose and your unique circumstances. Choose your process and your team wisely!
154502639-man-finding-jobs-gettyimagesWhen one spouse in a divorce has been unemployed for an extended period, it can often be a frightening situation for that particular spouse.  It can also be frightening to the other spouse.  This fear shared from opposite perspectives can lead to heightened conflict and tense communications.  This conflict and challenged communications can impede the entire divorce process.  However, it does not have to be this way. What if in the divorce process, there was a way for someone to explore these fears from a deeper perspective? The spouse who has been unemployed for some time, perhaps because of child rearing responsibilities, is extremely anxious or downright scared about how they will ever be able to make it. The employed spouse is anxious and downright scared they will forever face having to support their non-working spouse.  Both have legitimate fears and concerns. Let us look at some options that may help both at least minimize some of these fears. In a collaborative divorce , professionals, whether they are coaches, financial specialists, child specialists, or attorneys, have access to tremendous resources to help couples in this type of situation.  Vocational assessments can help determine a person’s aptitude for specific job classifications and what the expected salary ranges are for beginning, mid-level, and more experienced levels.  Sometimes additional training may be required to either add new skills or perhaps update skills from the past. Career coaches can help with packaging (marketing) a spouse for employment, resume creation, interviewing skills, and a game plan with target dates for employment. This type of effort requires genuine commitment on the part of the spouse seeking employment and the spouse who is employed.  The commitment comes in the form of the unemployed spouse diligently working with the vocational counselors and coaches to follow recommendations provided. Commitment from the employed spouse comes by supporting the spouse seeking employment both emotionally and financially.  When this commitment is genuinely felt by both spouses, good things can happen. The unemployed spouse will be able to obtain employment at a more rapid pace, which in the end serves to boost their confidence and self-esteem. This can have a mushroom effect to fast track the non-working spouse to employment with higher earnings. If the employed spouse sees progress to help the non-working spouse with employment, their fears of having to fully support their non-working spouse forever can be significantly reduced. Sounds like a win-win to me. The keys to all this happening is commitment, transparency, and genuineness from all involved including spouses and members of the divorce team. Of course, if you do not have a divorce team and are stuck in a more traditional divorce process, the commitment, transparency, and genuineness more than likely does not exist at all. This begs the question of which divorce process do you really want to pursue?  A collaborative divorce provides an environment described above where you and your spouse make decisions together that are in your best interest.  A more traditional or litigated divorce process is a process often forced upon you and then someone else makes decisions for you that affect your future.  Stop and think before you choose.  Choose your process wisely.
185064996-credit-score-gettyimagesDivorce is not fun for anyone nor is it a financially savvy thing to go through. You are splitting up what you own and what you owe to others. This often includes unpaid credit card balances and loans. What can you do to protect yourself? I always recommend to individuals and couples going through divorce or even contemplating divorce to immediately check your credit report. You can do this by going to This is the official consumer site provided in cooperation with the three major credit bureaus (Equifax, Experian, and Transunion) and the Federal Trade Commission. You will be able to obtain your credit report free from each of the three credit bureaus. Other websites may offer free credit reports but often want you to sign up for something. Watch out for these gimmicks or better yet just use the site mentioned here. After obtaining your credit report, get three different highlighted markers. Read through the report and highlight all open accounts listed as joint, use a different color highlighter to mark all accounts listed as authorized user, and yet a different highlighter to mark all accounts listed as individual in your name only. You will want to make sure that all joint credit cards, loans, and indebtedness accounts are closed post-divorce and are so noted in the divorce Judgement and Decree. Closing the accounts does not release you as a joint owner from the liability to pay remaining outstanding balances. It is critical to remember that even though the divorce decree may place responsibility for debt repayment on certain accounts to your spouse, you will remain liable to the creditor/lender should your spouse default on the payments. Even late payments could show up on future credit reports affecting your own credit score. Ideally on any joint debt accounts you will want your spouse to either pay these debts off in full or refinance the outstanding debt in their own name with their own new accounts. You will also want to address any accounts where you are listed as an authorized user. An authorized user has the same liability as a joint owner for any indebtedness on the account. The sort of gotcha on these types of accounts is that an authorized user is not always able to close the account. Any individual accounts held by you will be your responsibility to repay. I always recommend that to the extent possible attempt to emerge from the divorce with as little consumer debt as you can. Doing so will allow you to maximize your cash flow to meet your current living expenses and hopefully save for future goals. Keeping an eye on your credit and following these few simple steps can go a long way to helping you protect your credit, your credit score, and give you confidence to maximize your cash flow. Divorce as painful as it can be also creates opportunities to start anew.
183888526-self-introduction-gettyimagesBeing in the tax season moment, my next few blogs will address some common tax issues and implications resulting from divorce. The first issue/implication I will write about are name changes. It is quite common for a spouse going through divorce to request a name change as part of the divorce process. Requesting a name change can occur for a variety of reasons, divorce being only one. This blog will not attempt to address the reasons but rather focus on actions to take when changing your name. You may be asking yourself what in the world does a name change have to do with my taxes? The answer is plenty. Here are five action steps to take:
  1. Make sure you let your attorney know you want to change your name. It is quite easy for your attorney to order this when filing the divorce decree with the court. There are additional steps you must take to ensure a smooth transition by reporting the change to the appropriate agencies.
  2. The best place is to start with the Social Security Administration. All the paperwork you need occurs when the court enters your divorce decree into the record. This includes the order for the name change. Changing your name with the Social Security Administration is necessary so your new name on IRS records will match up with your Social Security Administration record. Problems arise when processing tax returns and names do not match up. Save yourself some time and headache by reporting the name change to the Social Security Administration immediately upon order of the court.
  3. Be sure to request a new Social Security card by filing Form SS-5, Application for a Social Security Card. Obtain Form SS-5 from or call 1-800-772-1213 to order it. You can also accomplish this by going to your nearest Social Security office. The new card will show your same social security number and your new name.
  4. The next step is to notify your employer. If you have not already done so, complete a new W-4 for claiming withholding exemptions factoring your new tax filing status. Remember you will no longer be filing a joint tax return but rather you will be filing as a single individual or as head of household.
  5. Here is a list of other entities to report your name change
    1. Department of Motor Vehicles for your driver’s license and update voter registration
    2. Passport amendment
    3. Health care exchanges If you purchased health insurance  through one of these, especially if you are receiving any type of subsidy
    4. Financial Institutions where you do business including banks, credit unions, investment companies, insurance companies, loan companies, credit card companies etc.
    5. Other businesses such as utility companies
    6. Notify the Post Office
Requesting a name change due to divorce is easy. It will save you time and money when completed as a part of the divorce process, rather than waiting until time has lapsed after the divorce.
185311153-tax-refund-gettyimagesThe child tax credit may save you money if you have a qualified child.  Here are the top five things to know about this credit as it relates to divorce:
  1. Depending upon your tax filing status and your income you may be eligible for a child tax credit of up to $1000 for each qualifying child you are eligible to claim on your tax return.
  2. An “Additional Child Tax Credit” is for individuals getting less than the full amount of the child tax credit.  This “Additional Child Tax Credit”, may give you a refund even if you do not owe any tax.
  3. Qualifications by the IRS the child must pass relating to divorce include:
    1. Child must have been under age 17 at the end of the tax filing year
    2. The child must be your son, daughter, stepchild, foster child, or your adopted child
    3. The child must not have provided more than half of their own support for the year
    4. The child must be a dependent that you claim on your federal tax return
    5. The child must be a U.S. citizen, a U.S. national or a U.S. resident alien
    6. In most cases the child must have lived with you for more than half of the tax filing year
  4. There are income limitations that may reduce or eliminate your ability to qualify for a Child Tax Credit
  5. See IRS publication 972 for more information on the Child Tax Credit
The child tax credit is one way you may be able to lower your out of pocket tax obligation and in some cases even receive a refund if you do not owe any tax. Be sure to consult with a qualified tax preparer to determine your eligibility to qualify for the child tax credit.
185241979-african-american-businesswoman-on-white-gettyimages After choosing your process wisely, discussed in my two previous blogs part 1 and part II, the next step is to choose your attorney wisely. I believe this is something to approach with significant thought about your goals, careful consideration about the process you want to follow and your own beliefs and values. How do your goals and process choices affect the choice of an attorney? When I mention goals, I am not just talking about your goals. The goals of your spouse are just as important. It is important to remember you are not in this divorce alone, your spouse is also present. You both have anxiety, fears, and unanswered questions about how is this all going to turn out. Please do not forget that attorneys selected by each of you will have their own goals. Their goals may not necessarily be in alignment with your own. Ideally, you and your spouse are able to discuss your goals together. You both may have some shared goals although in the throes of divorce this may be the furthest thing from both of your minds. Each of you will have some different individual goals. I would suggest to the extent possible working together with your spouse to identify these goals as they relate to children if any, relationship and communication with each other and extended family during and post divorce, financial security goals, and divorce process goals. Your ability to articulate and document these goals will in the end minimize conflict, and give you a roadmap if you will toward selecting attorneys. You will want to choose attorneys who are able to help you and your spouse achieve your goals. A collaborative divorce attorney once wrote about asking some straight to the heart kinds of questions when interviewing any divorce attorney. A question like, How concerned are you about what my spouse wants out of this divorce? This is a great question to ask any potential attorney you may be considering. How the attorney answers this question will give you loads of information about how this attorney will go about representing you.   If they say I think you should go after all you can get and then promise or insist they can get it for you, they are playing on your emotions and telling you what you want to hear. This attorney is probably more interested in putting on a show that will take money from your family resources instead of allowing you and your spouse to keep more of your money in your family where it belongs. This same collaborative attorney offered yet another question to ask a potential attorney. Ask if they believe a couple in conflict, going through divorce, can negotiate settlement outcomes without the use of threats or coercion to get what they want. If the attorney insists on using threats and coercion, they are likely not that skilled in interest based negotiations. Instead, they draw lines in the sand using threats and coercion. This leads to even more conflict and increasing costs meaning less money for you and your spouse to keep in your family. A settlement-oriented attorney will answer this question by explaining the differences between position-based negotiation and interest-based negotiation. One last question to ask a potential attorney is if they handle all parts of the divorce or do they often use outside experts such as a child specialist when children are involved or a financial specialist. The attorney who says they handle everything themselves may end up costing you and your spouse the most. This attorney is saying they are experts with children, finances, and legal matters. Rarely, if ever, is this the case. A child specialist financial specialist can bring great value to your divorce process. A parenting plan, which goes far beyond who stays overnight when and a financial plan to give both you and your spouse comfort in knowing you will be making the best use of your financial resources should give you and your spouse a degree of comfort and peace of mind. Besides that the cost of one child specialist and one experienced divorce financial specialist will be considerably less than attorney costs for dealing with these same issues. As you listen to the answers potential attorneys give when asked these three questions outlined in this post ask yourself: Is this attorney able to help me, and my spouse, work through our differences using the process we chose? Will this attorney seek to find outcomes that work not just for me but also for my spouse? Will this attorney choose to do all the work himself or herself or will they utilize experts in specific fields such as children, finances, and or relationship coaches when needed or helpful? Hearing the answers to these simple questions can help you decide whom to choose as an attorney. Choose wisely by being intentional, thoughtful, and in alignment with your goals, values, and beliefs. Doing so will allow you to keep more of your money in your family.
138710659-financial-advisor-talking-to-customer-gettyimages5 quick Divorce financial tips: These five are only a starting point.
  1. Plan your cash flow and spending carefully.  Do not over exaggerate.  You and your spouse only have so much income between the two of you.  Unless you can increase income you both will need to decrease some areas of spending simply because you are going from one household to two on the same income.  Something has to give.
  2. Have a  financial specialist experienced in divorce matters suggest ways for you and your spouse to save on taxes by utilizing head of household filing status when possible and the best use of dependency exemptions when children are involved.  A financial specialist can also recommend tax saving strategies for spousal maintenance and/or child support.
  3. If existing debt is a problem consider using an accredited consumer credit counseling agency to help you set up a debt management plan.  This does not affect your credit rating since you will still be repaying all of the debt.  The agency will work to negotiate a lower interest rate with each of your creditors.  You will make one payment to the consumer credit counseling agency.  The monthly payment you make to the agency is often much less than the combination of the payments you were making before.  The agency makes payments to each of the creditors for you.  There is the potential to save a bundle in lower interest rates and in some cases no interest giving you the ability to pay off your debt earlier than you ever thought.  Two such agencies in the Minneapolis Saint Paul area are Family Means and Lutheran Social Services  and no you do not have to be Lutheran to utilize their services.  In worst-case scenarios, bankruptcy may be a consideration.  Both of these agencies provide bankruptcy counseling and are able to refer you to bankruptcy specialists if and as needed.
  4. If existing debt is a problem do not make it worse by adding to that debt.  Find other ways such as sacrificing today for a better tomorrow, increasing income, lowering expenses or some combination of all these.
  5. With retirement assets, it is common for a financial specialist trained in divorce matters to help one spouse or in some cases both spouses recommend strategies to come up with down payments for new housing purchases.  This usually involves the use of a Qualified Domestic Relations Order (QDRO).  A portion of an employer retirement plan is awarded to the lower income spouse, income taxes on the distribution are planned for, and if the distribution is incident to a divorce the spouse awarded a portion of the employer retirement plan will avoid the pre 59 ½ early distribution penalty.
Utilize an experienced divorce financial planning specialist.  They are your best resource for helping you keep more of your money in your family.
RoadmapOften when we decide to do something of significance, like go on vacation, obtain a college degree, search for a new job, or save for a future purchase we develop a plan.  If you are serious about the task set before you, you will develop a written plan to keep you on track and measure your progress. Getting unmarried, as I now refer to divorce, should be no different. In fact, if you choose to use a collaborative divorce process, we utilize a written document called “Roadmap to Resolution.” I have found the use of this Roadmap extends beyond divorce planning.  I use it as a general problem-solving model. The Roadmap has 6 essential steps.
  1. Set Goals  The four basic sets of big picture goals include: Relationship goals between you and your soon to be ex-spouse Goals related to your children regardless of their ages Financial goals as to how you and your spouse would like your future financial lives to look so you both can have the greatest sense of financial well being with the resources you have Process goals as to how you and your spouse would like the process to work for you
  2. Gather Information and Identify Issues This includes gathering all financial documents and other relevant information that will be necessary to itemize all assets, liabilities, income, estimated reasonable and necessary living expenses, and property received as a gift, inherited, or acquired before the marriage.  All of this information is documented in your final divorce decree.  If you have children, this also includes information about your children their needs and special activities and costs associated with each one.
  3. Generate Options This step is when the collaborative team including attorneys, coach, child specialist,  financial neutral, and clients brainstorm to identify any options that come to mind regardless of how silly or unpleasant those options might sound initially.  The key is to write down as many options as possible without anyone commenting or trying to evaluate any stated options.
  4. Evaluate Options Here the clients indentify the options they would like to evaluate and consider.  It is at this stage clients can fully explore the pros and cons of each of the options listed and prioritize them.
  5. Negotiate/Make Decisions After fully evaluating any options clients are able to negotiate and make decisions they both can live with.
  6. Generate Documents Once all necessary decisions are made, the attorneys go to work to document agreements by preparing a draft decree for each spouse to review and ultimately sign.
The model flows both ways; meaning if you are in step 5 negotiate/make decisions, another option may present itself, creating a need for further evaluation and new negotiation and decision making. The “Roadmap to Resolution” model provides the framework for helping spouses work through a collaborative divorce and ultimately reach agreements on all relevant issues. By using the “Roadmap to Resolution, the collaborative team process, has literally helped thousands of couples across the country and around the world end their marriage but save their family. Choose your process wisely.