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Understanding co-parenting agreements

Understanding co parenting agreements

Going through a divorce is one of the most traumatic, emotional and expensive times in any person's life. It's sometimes hard to know what to do first, where to go for help, and how to put the pieces of life back together as you and your children navigate through the days to your new normal.

If you're divorcing and have children, one of the most important things to understand is, your relationship with your spouse never ends. You both will always be family to your children. One of the ways to put that new normal into play early is through mediation, a process by which you and your spouse come to an agreement about the terms of your divorce. You'll meet with a neutral third party, a mediator, and talk through the issues you need to resolve to move ahead with the divorce.

One of the most powerful and positive things you can create through mediation is a co-parenting agreement. It is a joint, non-binding contract that lays out, ahead of time, how you will parent your children from different households.

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Your divorce asset inventory: Know where your assets are

Your divorce asset inventory know where your assets are

 If you're preparing to file for divorce, or if your spouse has just dropped the bomb on you that he or she is filing, the first thing you should do is get a handle on the availability, liquidity and titling of all of your accounts. In other words, get your financial ducks in a row to clearly understand where you are financially before proceedings begin. 

Here are some things to make sure you get nailed down:

  • Your current bank and credit card statements.
  • Update yourself on any current loans or mortgages you might have.
  • Income tax returns. Going back five years is a safe bet. And make sure you include property tax returns.
  • Business financial statements, if you own one either jointly with your spouse or yourself. Get the facts on its net worth, assets, liabilities and cash flow.
  • Your current income information, including pay stubs, and remember to include one-time or quarterly income sources like rental or lease agreements on property you own, dividends, even lottery winnings since the filing of your last tax return.
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Divorcing? Secure your Social Security

Divorcing Secure your Social Security

When you're divorcing, even if you're years away from retirement, you need to have your eye on the ball when it comes to Social Security. And not just your own benefits. One little-known aspect of divorce is, you may be able to receive a larger Social Security benefit based on your ex-spouse's work record than you would on your own.

You may be eligible to receive up to 50 percent of your ex-spouse's Social Security.

Make sure you have a good financial advisor who specializes in divorce, because the requirements can vary in terms of your eligibility to collect on an ex-spouse's benefit. Some requirements include:

  • Married for 10 or more years.
  • You are not currently married to someone else. (If you remarry, you cannot collect on your former spouse's benefit.)
  • If your second spouse dies, you are qualified to collect on his or her benefit if you had been married 10 years.
  • You must be 62 or older, unless your ex-spouse has died. Then you can collect at age 60.
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Recently divorced? How your taxes change

Taxes and divorce

When you're filing taxes after or during your divorce, you may have some questions in mind. Here are some tax tips from the IRS for couples who are going through a divorce:

Filing status. Your marital status on Dec. 31 determines your filing status. If you are considered legally divorced on Dec. 31, you can file as single or head of household. However, if you're in the process of divorce, you may want to file a joint return instead of filing as married filing separately. You'll both get lower taxes if you file jointly. It's one thing that's a win-win for both parties, and an opportunity to cooperate.

Alimony. If your divorce was finalized before 2019, you can deduct alimony payments you make to your ex-spouse. The receiver must pay tax on the income.

Children. If you are filing separately, both of you cannot claim your children as dependents in any given year. If you are the custodial parent (having custody of the children most of the time) it is generally your right to claim them as dependents. However, this is another area that couples may choose to cooperate on, especially if the non-custodial parent is diligently making child support payments.

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Maximizing your alimony agreement

Maximizing your alimony agreement

One important facet involved in the financial side of divorce is the issue of alimony or spousal support. It's a court-ordered payment from the higher-earning spouse to the lower-earning spouse, and is put in place to limit economic disparity and prevent economic hardship.

In the past, most often alimony was paid to ex-wives, who were homemakers, by their wage-earning husbands. But times have changed. Many, if not most, marriages include two wage earners, and the lines have blurred. The higher-earning spouse can be either one, regardless of gender.

Some things to know about alimony:

Alimony is determined by several factors, including:

  • The financial conditions of the two spouses
  • The standard of living during the marriage
  • The length of the marriage
  • The ability of the paying spouse to pay the alimony and still support himself or herself
  • The ability of the recipient to get education or training for a job
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How to prepare a financial statement for your divorce

How to prepare a financial statement for your divorce

Going through a divorce is an emotional, traumatic and even expensive situation. One of the most important parts of the process is each party's financial statement, which is required in all contested and some uncontested divorces.

Your financial statement, or affidavit, is a formal document that goes into your financial details, including income, expenses, assets and debts. Both spouses must fill out this statement and share it with the courts, and with each other. The purpose of this is to give the courts a clear understanding of a divorcing couple's financial situation.

It sounds like a straightforward and even simple process — income, assets, debts — but in reality it is a complicated endeavor. Making it more complicated is the fact that your financial statement is an absolutely vital part of your divorce that helps to determine your divorce settlement agreement. The court will use your financial statement to rule on alimony, division of property, child support and other financial considerations.

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Benefit bafflement? Here's how divorce or spousal death could affect your Social Security

WORRYING MAN

 

 

 

 

 

 

 

 

 

 

As you approach your retirement years, you may think you understand everything about how Social Security works. But the timing of getting that first check can be tricky, especially if you've experienced a spousal death or divorce.

In general, you may start withdrawing your guaranteed payments starting at age 62; however, for each year those withdrawals are postponed through age 70, you will receive an additional 8 percent or so based on inflation. Unmarried widows, widowers and divorcees may receive the greater of their own benefits or half of their late or former spouse’s benefits, but either way the amount received will be reduced according to when withdrawals start.

That means the strategy you choose could make a big difference in your income throughout your golden years. As of May, 59.3 million Americans were receiving Social Security benefits, but only 45 million were 65 or older. And a survey this year found a full 74 percent of American women were taking such benefits before age 70.

“For many people, when to claim Social Security is one of the most significant choices they will ever make,” notes Stan Hinden on AARP.com. “The timing of the first check affects how much they'll get from Social Security and what benefits will be available for spouses, children and eventually survivors.”

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How will tax reform impact my divorce?


TAX REFORMDividing assets during a divorce is difficult and draining on many levels, but when you're going through it after sweeping changes to the tax code, like there were this year with the passage of the Tax Cuts and Jobs Act, it gets a lot more complicated.

But, like everything when you're dealing with a divorce, forewarned is forearmed. Here are some of the things that might be impacted by the new tax laws.

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Five Financial Facts to be Aware of Before Your Divorce

DIVORCE GRAPHICThe costs of divorce are many. There's the emotional cost of the breakdown of a family, the pain of a failed marriage and the anger that can come with the reasons for the split. Divorce can take a physical toll, too, as the stress of it all wreaks havoc with your sleep, your blood pressure and your immune system.

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Regulatory Disclosure: The information on this website has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. This website is neither an offer to sell nor a solicitation to buy any securities. Gerard Gruber offers Securities and Investment Advisory and Financial Planning service through Geneos Wealth Management, Inc, Member FINRA/SIPC.  Investments are not FDIC insured. Investments are not deposits of the financial institution and are not guaranteed by a financial institution. Investments are subject to investment risks including loss of principal amount invested.