Q 1. She Asks: Our marriage isn’t working, neither of us knows where to begin, and we don’t want to upset the children – but we’re not happy. Any suggestions?
A 1. A good start is that you keep talking to each other and agree to find an arrangement that works for the entire family. We urge you to learn about a new approach to divorce that will keep your family’s best interests in mind at all times. The Collaborative Divorce process works because each of you has your own attorney, who facilitates the process of working out a settlement that meets the family’s unique needs. You and your spouse are the decision makers. The Collaborative team also includes a coach to help move things along as well as a ‘financial neutral’ specialist to help with the financial separation of assets and support issues. An agreement will be drafted based on your goals as well as your spouse’s.
Q 2. He asks: After15 years of marriage and two children, my wife and I are divorcing. She is the larger wage earner in our marriage, and we’ve built up substantial assets. We want to both be able to provide for our children and take them on nice vacations, but I don’t make enough money. My wife is willing to pay me for maintenance, but I’m uncomfortable with this arrangement. What can I do?
A 2. It’s great that you and your wife both want to provide for the children and work it out financially. To address your concern, perhaps you can get more of the invested assets and have them produce income for you, rather than getting maintenance. If you choose a Collaborative Divorce model, the ‘financial neutral’ specialist on your team will guide you both in making the right choices so you can gain assets and keep your pride.
Q 3. She Asks: I am receiving spousal maintenance from my ex-spouse and I have money left over after paying my expenses. What should I do with the extra money?
A 3. That’s an easy answer. First make absolutely sure that you do not actually need that “excess’ monthly amount for expenses that are invoiced annually or semi-annually (i.e., auto and home owner’s insurance, college tuition, summer camp fees, etc.). If you are sure those expenses are already taken care of, then you can set the “truly excess” money aside for your quarterly estimated taxes and put money into an IRA for your retirement. These strategies will also reduce the taxes you have to pay on your income.
Q 4. He asks: My wife and I divorced ten years ago. Now I am at an age where I can start collecting Social Security. Should I take it now or wait to receive my spouses’, since she is younger and made more money than I did?
A 4. If you were married for more than ten years, you are entitled to either your own Social Security benefit or half of your spouse’s, whichever is greater. You always have the option to take your own Social Security benefit now. Then upon your spouse filing for Social Security, you can switch to receive half of hers, if it is greater.
Filed in: Finances and the Financial Neutral