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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 Your original will (if you had one) is no longer valid after divorce so you will need a new one.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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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!
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88962094-household-bills-in-shape-of-question-mark-gettyimagesOnce you have completed your divorce, the list of things to figure out can be daunting. It can be easy to push off those things that don’t seem to affect your daily routine.  Some of those things that you have been putting off are likely financial – a lump sum distribution from the divorce just sitting in cash, a 401(k) in need of rollover or perhaps a credit card balance that never seems to get any smaller. It’s time to make understanding your financial situation part of the process of building a new life. The longer you wait, the greater likelihood that your inaction will impact your long-term financial success.  If you don’t know where to start, then it may be a good idea to seek out the assistance of a financial planner.  While financial planners may have specialties, the financial planning process is fairly standard for all planners.  At the core of the financial planning processes is evaluating your financial needs and goals, and helping you take steps toward meeting those needs and goals.  The general steps to the financial planning process are as follows: 1. Determining your financial goals What are you looking to achieve? Do you need to invest that cash in your savings account or rollover a 401(k)?  Do you need to figure out how you are going to pay for your child’s college education? Do you need to get a firm handle on your expenses and cash flow? (budgeting) 2. Gathering your information If you have recently completed your divorce, this step should be easy.  For your divorce, you needed to collect all of your financial information.  You can just pass this information on to a financial planner (bank, retirement, and investment statements, liabilities (credit cards, car loan, mortgage), and your income information, such as a pay stub and a tax return.  A copy of your divorce decree also provides pertinent information. 3. Analyzing your information The financial planner will stitch together all of the financial documents in your life to create a picture of your financial situation. 4. Creating your financial plan A financial plan lays out your financial goals and your financial situation.  From there, your financial planner will work with you to create a plan of action for meeting your financial goals, based on your financial situation. 5. Implementing your financial plan Your financial plan is going to be a little different from everyone else’s plan. Implementation of a financial plan can take many forms as well.  It may involve reallocating your portfolio, setting up a program to save for college, purchasing insurance, or creating a budget. 5. Monitoring the progress of your financial plan In the stock market and life, things happen, situations change. Financial plans are not engraved in stone, never to be changed.  They have to be flexible to adapt to the changes that happen in the financial markets and in life. While the financial planning process is fairly standard across the industry, the financial products and solutions recommended by financial planners are not.  Much like your physical health, if you are not sure if the recommended products or plan of action are best for your financial health, seek a second opinion.  You are more likely to be committed to following a financial plan if you understand the financial products in your portfolio and are certain that your financial planner has put your interests first.
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straight-ahead-Collaborative divorce is an out-of-court, non-adversarial process for dissolving a marriage. It is common for one spouse being ready to move forward with divorce and the other spouse struggling to move forward in the process. Parties can be at very different points on the divorce readiness scale – one is ready, one is not. This is quite typical. The spouse not wanting to move forward is sometimes called “reluctant” or “in denial.”  Because Minnesota is a no fault divorce state, one spouse not being ready does not need to stop the process from moving forward. The ready spouse can file for divorce and the process moves on in court with little control of the reluctant spouse. However, when one spouse is looking for a non-adversarial, out-of-court alternative (like collaborative divorce), there is more of a need to bring that other spouse along. The reluctant spouse really can delay the process and interfere with the non-reluctant spouse’s desire to divorce. It is interesting to think that one spouse can be committed to a collaborative divorce, but divorcing may not have to be a collaborative decision.  So one party can control the process (with the other’s agreement), even if the other never agrees with the decision to divorce. It is common during the divorce process to have spouses be at different comfort levels with the decision to divorce. These levels of readiness can change throughout the process and even vary greatly from one meeting to another. The challenge often lies with helping the reluctant spouse commit to a collaborative process, while acknowledging his or her disagreement with the process. A good collaborative attorney can strategize ways to bring the reluctant spouse into the process and help move things forward. Ways to teach him or her about the divorce options and lay out the pros and cons of different processes for divorce.  
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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.
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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 www.annualcreditreport.com. 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.
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514409797-rocks-forming-numbers-reading-2016-gettyimages2016 is well underway and many will look at the new year as a new beginning. While it’s important to have a positive outlook on the year ahead, sometimes the changing of the calendar year can create a false sense of promise. Pressure to set unrealistic goals such as being healed from your divorce this year, or that you will fall in love this year. Sometimes while going through the difficult path of grieving your divorce it may be helpful to consider that January 1st is nothing more than the day after December 31st. The changing of the year will bring a bit more healing and personal growth as each day passes, however it is imperative to understand that things can’t, and won’t, change overnight, which is why creating realistic expectations of the new year is essential to your healing. All the talk about new year’s resolutions, goals, “new year, new you,” that come with the month of January can leave you feeling overwhelmed, which creating realistic expectations, even if that means lowering or having no expectations at all can be a healthier way to navigate the healing process. Setting lower expectations allows you to be gentler on yourself. Creating a sense of balance in your life can be far more important than checking something off of an overwhelming, or unrealistic, to-do list. As you gradually adjust to your new normal, you may feel that everything in your world is now different, yourself included. You will have days of triumph, days of defeat, and plenty of temporary setbacks throughout the year ahead, but it’s crucial to remember that these temporary setbacks are just that – temporary. They happen to everyone and are a normal part of the process of healing from your divorce. It’s natural to have days where you hope and pray for everything to go back to the way things once were, but it is unrealistic to expect for that to actually happen. As you begin to accept your new normal, it might require a new approach to life, and maybe your biggest goal for 2016 will be to learn that approach and how to navigate it. Find the joy in life, which is more important than checking something off of a list. Reconnect with old friends, find new hobbies, look for the joy in everyday, but don’t feel the pressure to have a timeline on your healing, your happiness, your life, or finding new love.
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BLD077218In the Twin Cities, many family law attorneys offer a free consultation to learn about your options.  This is a time to meet your potential new attorney and ask your questions.  The consultation can serve three main purposes. First, you can learn about your divorce options.  There are four general processes for divorce:
  1. pro se/unrepresented where you go through the process without legal guidance;
  2. mediation where a neutral third party helps you come up with the agreements;
  3. collaborative divorce where both parties commit to a respectful out of court process with lawyers and other professionals guiding the process; and
  4. litigation, the court-based traditional process.  A good consultation should educate you on all of these options.
Second, the consultation allows you to learn some basic information about the issues in a divorce.  The attorney can discuss the main legal issues that need to be decided during a case – such as child custody, parenting time, spousal maintenance, or property division.  Clients often have specific questions about these categories and what may or may not be relevant to their situation. Third, the consultation allows you to get to know someone and see if it is a good fit for legal work.  One of the most important aspects of a consultation is the opportunity for you to meet a potential attorney and see if you will be comfortable working with them. Your attorney is your guide. You may cry or express anger in front of this person – you need to feel comfortable doing so. In addition to legal adeptness and zealous advocacy, you also must be comfortable and trust your attorney. This is perhaps the most important element of the relationship. You should know that when you are just meeting an attorney for a consultation, the attorney cannot give you legal advice or answer legal questions with certainty. Because the consulting attorney does not have a client relationship, you and your spouse could meet with the attorney together. This is often a good way for you both to hear information together. When you receive the same message, you often feel less adversarial and more like you are both seeking a guide for the process. Please contact a collaborative attorney for a free consultation to learn more about your options.