Come Out of Your Divorce Financially Secure
A Bucks County divorce can cause major financial devastation for individuals, but it doesn’t have to be that way. When a divorce is litigated, a lengthy court battle generates high lawyer fees, court fees, uncertainty about your financial future, high emotional costs, and in the end, the judge splits your assets as he or she believes is best, and no one is happy.
We believe there is a better way. Divorce mediation and collaborative law offer two options that are significantly less expensive, take less time, and almost guarantee a more satisfying outcome for all parties involved.
In divorce mediation and collaborative law, we consider the many financial effects of divorce and negotiate settlements that offer a fair and financially feasible plan for your future. Let’s consider a short list of some of the financial issues that we work together to evaluate and resolve in an equitable manner.
The family home
This tends to be the biggest asset and usually the biggest issue to resolve. There are a number of options, but the most common are to sell the home and split the profit after the sale or to allow one spouse to retain the home in exchange for other things the other spouse wants.
If you choose to keep the home, you must first pre-qualify for a mortgage before your spouse can be removed from the deed. It is not uncommon for the spouse who wants to keep the home to be unable to carry a mortgage alone. Determining this beforehand is necessary to make important decisions about your financial future post-divorce. Having cash available from the sale of the home can help rebuild your finances, but often that has to go into the cost of another home. We review all these considerations as part of our negotiation process.
Child support
Calculating child support is a complex process involving a wide array of financial considerations. We will walk you through them and discuss how to care for the children without leaving either parent financially struggling.
Alimony or spousal support
Alimony in PA considers each spouse’s earning capacity, spouses’ ages, length of marriage, sources of income, assets and liabilities of each spouse, and standard of living. We negotiate fair spousal support, if appropriate, which may have an expectation that the spouse with the lower income find training to increase her income potential so that future support may be adjusted downward.
Health insurance
Health insurance is usually provided by one spouse’s employer. In a divorce, that health insurance for the divorced spouse is lost, though the parent may still keep the children on the policy. The cost of health insurance for the divorced spouse should be factored into any final negotiations.
Life insurance
The purpose of life insurance is to provide for one’s family after one dies and to cover the cost of the funeral and burial. Divorced parents should still carry life insurance, especially if they have minor children. We sometimes recommend that the parent receiving child support and/or spousal support take out a policy on the spouse paying, since there is no guarantee that the payor will carry insurance or that their name or their children’s names won’t be removed as beneficiaries without their knowledge.
Retirement funds and other financial assets
Dividing or adjusting financial assets like pensions, IRAs, 401(k)s, and other financial assets may require a financial expert to properly value the assets so that we can negotiate fairly and divide or adjust the assets accordingly.
Division of other assets and debts
Physical assets as well as financial assets will need to be divided, and all of this is part of the negotiation. Remember that a primary goal is to ensure you will be financially solvent and ready to rebuild after the divorce. In some cases, it might be best to sell some valuable assets to divide them easily and have ready cash. Remember, too, that all family debts will have to be divided, which will obviously offset any financial assets.
Paying for children’s college education and car
Even if your children are young now, it is wise to negotiate some sharing in the responsibilities of helping your children pay for college or a car someday. The custodial parent should not have to be stuck with these expenses alone.
Tax impact from divorce
Many tax implications of the divorce need to be considered in the negotiation. You don’t want to be surprised by a sudden increase in taxes because you have lost many deductions at once. The most tax-advantageous filing status is married filing jointly, which you will have to change. Only one parent lists the children as dependents, and only the homeowner can deduct interest and other home costs. These changes need to be considered for a thorough understanding of the post-divorce financial position of each spouse.
Preparing for your financial future
Mediation and collaborative divorce take the time to walk you through a deep analysis of the financials while at the same time saving you significant cost over litigating in court. With a thorough picture of income and expenses post-divorce, you will be able to develop a post-divorce budget and take steps to rebuild your credit score after all the financial changes.
At the Law Office and Mediation Services of Elissa C. Goldberg, LLC, we know what divorcing couples go through. It’s a challenging time, and it’s our goal to help you through it with the least amount of stress on your family and finances. We want you to have the resources you need to build a great new future. Give us a call at our Doylestown, PA office, (215) 345-5259, for a free initial consultation.