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tightropeBeing a single parent demands so much of a person’s time and energy that taking care of longer-term financial concerns often take a back seat. So many single parents face financial restrictions that make it seem they are constantly on a financial tightrope. Getting off that tightrope and onto solid financial ground should be a priority for every single parent. Finding solid financial ground starts with determining your financial goals and monthly cash flow. Determine your financial goals  The first step on the path to a more secure financial future is to determine your financial goals. Your financial goals should include short-term, medium-term and long-term goals. Short-term goals may be to reduce spending and not rely on credit cards to make it to the next paycheck. Medium-term goals could be paying off your credit card(s) and creating an emergency fund. Long-term goals may be saving for your children’s college expenses and retirement. Figure out your cash flow  All of your financial goals require one thing – saving money. To do so, you need to figure out how much you spend and then create a budget that incorporates saving. Tracking your spending can be pretty easy these days with online account aggregators like Mint.com. To better understand your spending habits when using credit cards, you may need to go old school and save the receipts to review your purchases.  This is particularly helpful if much of your shopping happens at Walmart, Target or Costco, where your shopping cart could include groceries, video games and clothes. One way or another, figure out how much of your spending is essential and how much is unnecessary spur of the moment buys. Create a budget that accurately matches your essential spending and replaces most of your unnecessary spending with savings. Be mindful of not only what you buy, but also how you buy it. Using high interest credit cards are an impediment to meeting your financial goals. Paying off high interest credit cards is a financial goal that improves the odds of meeting your other financial goals. Save the tax-free way  Tax-deferred investment accounts such as Investment Retirement Accounts (IRAs) for retirement and college-funding accounts, such as 529 accounts, are a good way to meet those long-term goals. These accounts often can be opened with a couple hundred dollars. Setting up automatic monthly contributions from your bank account to these accounts can be done for amounts as low as $25. Both types of accounts grow without being taxed until the money is withdrawn. For 529 accounts, there will be no taxes if the withdrawals are spent on qualifying college expenses. Figuring out your budget shouldn’t be a chore done after the kids are in bed. It should be a family project. Developing good financial habits that lead to meeting financial goals is an essential skill that all parents should share with their children.
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Visualize Choice!“Mom, why won’t this piece fit here like it should?” My son is trying to build a Lego kit, and has made a mistake in the previous steps while trying to follow the directions. He keeps fitting the pieces together, but isn’t getting any closer to making the design on the cover of the box. I tell him he needs to go back a few steps and figure out where the pieces aren’t put together correctly. He does, and soon he is on his way. As a collaborative divorce lawyer, working with my clients towards their ideal divorce is similar to building a Lego creation. It is not a collector’s edition kit that is pre-designed. The clients actively design this project themselves. At the beginning of the process, we sit down and identify what an ideal divorce would look like for their family. This becomes our own design on the box that we aspire to build. To build it, the client brings the crucial information regarding their life, financially and otherwise, that we have to work with. These are the Lego pieces that we must fit together to replicate the design on the box. As a lawyer, I come to the table with knowledge of the instructions, which in this case are the statutes. The statues give us acceptable methods for fitting the Lego pieces together. Working as a team, the client and I look at the pieces we have to work with and build a divorce agreement that both fits their desired outcome and the statutes’ requirements. Sometimes we run into the same dilemma as my son – what we are making isn’t quite turning out like we wanted. Through years of practice, I know the solution is this: go back a few steps, look again at the building blocks, review the directions, and rearrange the pieces. Before you know it, we have built what we wanted to build.
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159627120-heart-shaped-jigsaw-puzzle-with-missing-gettyimagesDo you do jigsaw puzzles? They can be great exercise for your brain, but they do require patience. The image on the box looks great, and then there’s the daunting moment you must face after dumping the pieces out in a messy pile. Those who approach puzzles with strategy most definitely have an advantage, and sites like Puzzlewarehouse.com offer tips for people attempting puzzles for the first time. Divorces can be like undone puzzles in many ways, and so these tips overlap with what we do as collaborative divorce attorneys. Here are six tips in particular from puzzlewarehouse.com that relate well to the collaborative divorce process:
  1. “Flip all pieces upwards.”
  • “Having all your pieces facing the same way can be tedious, but it makes it so you’re working with the whole puzzle the whole time, and it’ll make the next steps quicker.”
This first step is true for both puzzles and couples looking for a divorce. Couples who begin the divorce process must deliver their “pieces” (of information) to the professionals involved in their case. Details that need the attention of everyone involved must be “flipped upwards” (brought to light) so they can be placed well in the bigger picture.
  1. “Find all the edge pieces.”
  • “Constructing your border gives you a defined space that you’ll work inside as you build.”
There are clear boundaries for each collaborative case that are determined in the first meeting between the clients and their chosen professionals. A few things that are considered are the interests and goals of each client, as well as a participation agreement and general expectations of conduct. Having clear parameters makes collaboration possible and desired outcomes attainable.
  1. “Sort by color.”
  • “From here you can build recognized sections of the puzzle.”
It is the job of collaborative attorneys to help their clients sort out and understand various options for building their divorce agreement. Attorneys can do this more easily when the clients have gathered their personal information (assets, lifestyle, etc.) so no piece is missing. A complete set of “pieces” makes sorting by type easy, so that the different sections of the agreement can be put together quickly and completely, including every aspect from child support to personal property to businesses and real estate. The big picture agreement that results will be one that suits the needs of both parties.
  1. “Special pieces.”
  • “Some pieces will be part of really distinguishing parts of the puzzle because it has text on it, or a color that’s only in one spot. Keep those separate and build on them as you can… it will be easy to spot where it goes as you start assembling the puzzle.”
Every couple has a unique case because of the specific goals and circumstances in their lives that they bring with them to the case. Certain issues (“distinguishing parts”) will have priority over others so that the bigger picture of the divorce agreement can be finalized. Family businesses, special needs children, and out-of-state job offers are all examples of special pieces in a divorce that require special attention from the start.
  1. “Work on small sections at a time.”
  • “Instead of trying to work on the entire puzzle at once, it can be really helpful to work on small portions so that you’re accomplishing sections. This will help keep you motivated and you’ll have a visual record of your progress.”
Helping clients break down the divorce process into pieces that are manageable is an important part of the process for collaborative attorneys. Maintaining a broader perspective that keeps the bigger picture in sight without getting “lost in the weeds” (or, pile of puzzle pieces), is important. Keeping checklists and journals are both recommended methods that can work well for clients trying to maintain this perspective.
  1. “Don’t give up.”
  • “When you’re tired… take a break… sometimes too much time at one problem can take away from [the puzzle process]. A fresh look at it later may help you see things you missed, too!”
Stress is often a part of any divorce process, and a collaborative team of professionals will try to pace the tasks so the clients can remain comfortable yet productive. Communication is always encouraged so that all needs will be heard. Avoiding the burnout that often happens in litigated divorce is easier when the case is approached with appropriate pacing and communication. With the collaborative divorce process, setting a schedule at their own pace is something within the client’s control. * * * People with skills in putting jigsaw puzzles together gained those skills by putting many puzzles together. Collaborative divorce attorneys have years of experience in putting together divorce agreements in and have developed their skills through practice and love to efficiently lead their clients towards the best agreement for everyone.      
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State Farm Demolition
State Farm Building Demolition in Woodbury, MN
For anyone living or working in the east metro, especially Woodbury, the iconic State Farm Regional Office Building that once loomed over the Radio Drive and I94 corridor is now a pile of rubble.  It was a symbol of economic growth when it was built in 1994, then became a symbol of economic slowdown and job loss when it was vacated in 2006.  Watching as it was dismantled, I initially thought it was a waste to tear it down.  Developers tried, though, for a long time to “recycle” the building.  But who needed, wanted, or could subdivide 400,000 feet under one gargantuan roof?  So, assuming all avenues were explored, developers decided to demolish it.
The divorce process is similar to a building demo: sometimes you just need to tear everything down, in a methodical and deliberate manner, and start over.
If the interior walls are immovable, the space can’t be reconvened, and the foundation is crumbling, it might be more cost-effective to tear down and rebuild, IF you don’t charge in with a wrecking ball and create mass chaos.  The collaborative divorce process is anything BUT a wrecking ball.  It is a thoughtful, deliberate, respectful, and diplomatic approach to divorce.  Collaboratively trained lawyers are mindful of complex family systems, utilize interest-based negotiation, and help you and your spouse co-parent your children while essentially, re-configuring your family.  While it can be scary watching the walls come down, the end result is an intentional, creative, and lasting “structure” (or plan) that can actually create more stability in the future.
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Determining who is best qualified to help you reach your financial goals, understanding what they can do for you, and getting clarity on how they get paid for their services may be a challenge if this is all new to you. Here are some useful tips to find the right financial professional to help guide you through your financial matters. Designations The finance industry excels at creating financial designations for every conceivable financial situation.  If you are looking for a financial planning generalist who can help you with most issues, look for someone with either a CFP®, ChFC® or CFA® designation. A Certified Financial Planner® (CFP®) is the dominant designation for financial planners. The Chartered Financial Consultant® (ChFC®) designation is similar to CFP®. A Chartered Financial Analyst® (CFA®) is an expert in investment management, but has also studied the basics of financial planning.  In addition to one of these designations, many financial advisors who work in the divorce area also have a CDFA™ designation (Certified Divorce Financial Analyst®). Background Check Once you find some candidates with the right credentials, do your homework and check out their website to see how much experience they have and if they indicate any specialty. You should also look into whether they have had any disciplinary issues with regulators, by performing a FINRA BrokerCheck® search. The Financial Industry Regulatory Authority (FINRA) has a file on every advisor working with a FINRA-registered brokerage firm at www.finra.org/Investors/ToolsCalculators/BrokerCheck Initial Meeting Questions Most financial planners will be happy to sit down with you for an initial meeting at no cost or obligation.  The initial meeting is your chance to learn more about the financial planner and their business, to explain your situation and learn what services the planner offers. The following are some essential questions to ask at the initial meeting. What experience do you have? The financial planner may have significant financial experience but it is the experience they have counseling individuals that really matters. What is your approach to financial planning? Ask what types of clients and financial situations the advisor typically works with.  For example, a planner that specializes on working with business owners may not be the best choice if you are newly divorced and in need of budgeting help. What services do you offer?  Some financial advisors may focus on helping you with your investment needs, where others will also provide comprehensive financial planning (i.e. retirement, education, estate, tax and budget planning). Many planners expect to manage your portfolio along with the other services that they offer.  Financial planners may also be good resources for and work closely with tax accountants and attorneys. Do you work alone or with a team? Financial planning is often done with a team approach where several specialists will assist the lead planner. When your financial planner is in meetings, it is good to know if there is someone else in the firm who can answer your questions or take care of basic requests in a timely manner. How much do you typically charge? How do I Pay for your services?  Financial planners may charge for their services in several ways. If they are only creating a plan for you, it may be a set project price or by the hour. If they are will be managing your investment portfolio on an on-going basis, they may earn a commission on the investments or a charge a fee based on the size of your portfolio. There are numerous questions that you should consider based on your own situation.  Remember that you are under no obligation in this meeting. If you intend to work with this planner over the long-term, it may take more than one meeting to determine if they are the right fit for you.  Whatever planner you decide to work with, make sure you know what services will be provided and how the planner will be compensated.  
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73582147-wedding-cake-top-with-groom-bride-and-lawyer-gettyimagesWhen a couple divorces, the final decree or order from a Court typically dictates how property shall be divided, how the children shall be parented, and what support will be paid moving forward.  The decree will give you the dates and amounts of payments.  The decree will also tell you what amount each of you is awarded of accounts or who shall keep the house.  But there are some things a divorce does not dictate. After a divorce is final, here are six things you (or your attorney) should do to finalize the division and move forward:
  1. Divide cash accounts. Bank accounts and investment accounts can be divided on your own. You both may need to work together to close joint accounts or transfer funds from one individual account to another. At the end of the process, you should have no joint accounts unless you have agreed to own something jointly.
  2. Pay-off and close joint credit cards. Joint credit card should be paid off and closed. You can take care of this on your own.
  3. Divide retirement.  Retirement accounts need to be divided precisely as outlined in the decree. Non-qualified plans (like IRAs) can be divided with a copy of the decree and direction from the account holders – you can do this on your own.  Qualified plans (like pensions, 401(k)’s or 403(b)’s) need a court order and you will have to have your attorney draft this or hire a consultant.
  4. Property title transfer. Title for any real estate that was awarded in the decree needs to be transferred to the individual owner. This can be done with a quit claim deed or order from the court that needs to be recorded with the county property office.
  5. Health insurance. Set up your own health insurance if needed or work with your former spouse to continue coverage for them.
  6. Estate planning. Your original will (if you had one) is no longer valid after divorce so you will need a new one.  Hire an estate attorney to draft up a new will.
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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 www.collaborativelaw.org and be sure to check out our blog site on a variety of topics at www.collaborativedivorceoptions.com.
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185122660-red-x-gettyimagesWhen I heard “The X Files” was coming back for six episodes, I was thrilled!  What other show gives you supernatural, psychological, political, legal, medical, and alien content wrapped into one?  The show ended when I was a new lawyer; that is, when cell phones weren’t smart; Monica, Phoebe, Rachel, Ross, Chandler, and Joey were screen friends; e-mail was barely a blip on the screen; and tweeting was simply the sound birds make.  I remember thinking how cool Mulder was when he whipped out his Nokia flip phone (the “it” phone of the new millennium, right?) to call Scully.  After all, he couldn’t send her a text.  A text was something we read not something we did back in 2000.  But now, in these new episodes Scully can see…on her smart phone…when Mulder is calling her.  And Mulder can take pictures of the monsters and aliens on his phone.  Technology has definitely changed in the past 16 years.  We will see if any of these devices help the agents in their quest to find the truth! Unfortunately, devices that make life easier can make life more complicated.  I can’t tell you how many clients have told me they or their spouse “reunited” with a past love-interest on Facebook, or an affair was discovered in an e-mail or text.  If this has happened to you, you aren’t alone.  Social media and technology have certainly made the world smaller by reuniting people or keeping them connected.  But some argue technology is making us less social.  Kids text instead of talk to their friends.  Relationships end via e-mail.  Technology should enhance communication, not hinder it.  Hopefully, human beings won’t evolve into a life form where kindness, sensitivity, and compassion aren’t valued.  Or perhaps that’s part of Mulder’s whole conspiracy theory.  The truth IS out there…somewhere…
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601840767-pink-tulip-field-lisse-netherlands-gettyimagesWith the recent warm weather and longer days, it is beginning to feel like Spring. Spring is a time of rejuvenation and growth. As the sun comes out and the temperatures rise, flowers blossom and buds sprout.  People are out exercising and enjoying the warm weather. After a long, cold winter, as the days get longer, the community collectively is re-emerging. It is an optimistic, forward-looking time. There are a number of similarities to Springtime and the re-emergence after a divorce.  When someone initiates a divorce, it often causes the fear and negative emotions to increase. There is added anxiety in the process, knowing that you have started but not yet really resolved anything. The divorce itself may feel like winter.  You may feel isolated to stuck in a lonely process. You may have a hard time appreciating the positive things in your life and instead focus on the cold, scary parts. But once resolutions are found, it is a new beginning. Indeed, a collaborative divorce process (where both clients work together out-of-court on resolutions) can lead to meaningful resolutions that establish a great foundation for the future. Mutually acceptable resolutions and a process that supports and nurtures both spouses, can lead to a new normal.  Once in place, those resolutions can feel like a whole new life. Like Spring, it can feel like the future is positive and there is potential for emotional and financial success. Relationships can feel refreshed or reinvigorated. People may have better mental health and feel good about moving forward. Like an extra bounce in your step or deeper peace — re-emerging from divorce has great possibility. There are options when you are divorcing. The collaborative process is a truly future-focused process that supports you during the process and then sets you up for success afterwards.  So, if you are contemplating divorce, know that it gets better. There is a springtime waiting for you.
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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
Coach: 
  • 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!