DIVORCE FINANCIAL ANALYSIS
IN THE NEWS
Divorce Negatively Impacts People’s Retirement Readiness
PlanSponsor | Lee Barney | June 13, 2018
The Center for Retirement Research finds that the net worth of non-divorced households is 30% higher than for divorced households. Divorce frequently results in the sale of the house, which not only involves transaction costs but also can occur at a suboptimal time in the housing market... Frequently, divorce requires that financial and retirement wealth be divided between two new households. If financial assets can be divided without being sold, divorce may not reduce total wealth. But if assets are sold, the timing may be bad and sales can involve transaction costs.
talk about money before marriage
Chicago Tribune | Francine Knowles | June 4, 2018
“It’s important to discuss one’s philosophy on money in general,” McElroy said. “Some people come from the mindset that you really have to be a saver, meaning they are going to do everything they can to reduce expenses, so they can save as much as possible because that’s their defense against the unexpected. “For another, money comes and goes, and you just do the things you want to do and not delay your life. It’s important to talk about their world view of money because if there is misalignment, that can create a lot of conflict.”
When your clients divorce, avoid this costly IRA mistake
Financial Planning | Ed Slott | May 15, 2018
In citing the case of Bunney v. Commissioner, 114 T.C. 259, April 10, 2000, the court described the two common methods of executing a tax-free IRA transfer due to a divorce: 1) retitling the IRA to the other spouse or 2) directly transferring funds from one spouse’s IRA to another... As long as the transfer is done in line with a divorce decree and by one of the methods stated above, it will be a tax-free transfer. That means it can occur before or after the divorce is finalized. Moreover, there are no limits on the number of transfers. It just needs to be pursuant to the decree or order.
Rise of ‘Gray’ Divorce Forces Financial Reckoning After 50
Think Advisor | Suzanne Woolley | April 17, 2018
A majority of married women—56 percent—still leave major investing and financial planning decisions to their spouse. Fifty-nine percent of widows and divorcees regret not taking part in long-term financial planning when they were in a couple. Fifty-six percent of divorcees and widows discovered new financial wrinkles in the process of splitting up. The most common negative surprises were hidden spending, hidden debt and hidden accounts.
How to avoid mistakes dividing up 401(k) assets in divorce
CNBC | Sarah O'Brien | March 7, 2018
If your soon-to-be ex has a workplace retirement plan and you are entitled to a piece, the only way to legally access your share is through what's called a qualified domestic relations order, or QDRO... For the recipient, it's important that you do not agree to a change of beneficiary before the divorce is final. As long as you remain married, account owners cannot name anyone other than a spouse without your approval.
Post-Divorce Money Tips to Prepare for the Next Stage in Life
The Street | Cindy Turkington | February 21, 2018
A divorce will likely be the largest financial transaction that a person will experience during their lifetime. If you or someone you know is nearing retirement and planning to divorce, it's essential to make informed decisions during and after a divorce because the choices you make will impact both your short-term and long-term financial future.
Deciding where to live during and after a divorce
WTOP | Dawn Doebler | February 6, 2018
Every situation is unique, and while one route may have worked well for a friend or family member, that doesn’t necessarily mean it will be appropriate for you. Deciding where you will live is really a matter of balancing the emotional, practical and financial implications of the three major options you have — staying in your current home, buying a new home or renting.
Marital Asset Recovery: 'Wealth Managers' Assist Unscrupulous Men in Defrauding Their Wives
Daily Business Review | Edward H. Davis Jr., John Silbermann and Nyana Miller | January 24, 2018
Wealthy men are cheating on their wives—with their accountants and lawyers. They carry on these affairs in exotic locales known for banking secrecy and regulations that make it possible to hide billions of dollars in marital assets.
NOT meant as a bashing of all men, but a very good read for HNW spouses who are married to pathological narcissists. This is precisely how they operate… Men who engage in these schemes often fit a standard profile—narcissistic, with an inflated sense of self-importance and a complete lack of empathy. They are often highly intelligent and believe passionately that they are doing nothing wrong. They engage in protracted litigation to exercise power over and to punish their ex-wives, to exert control over their children and to secure loyalty from their family members.
Court Finds Divorce Decree Qualifies as QDRO
Plan Sponsor | Rebecca Moore | December 27, 2017
A federal appellate court has found that a divorce decree contains all the information required for a qualified domestic relations order (QDRO) under the Employee Retirement Income Security Act (ERISA) and therefore determined that a deceased employee’s life insurance proceeds go to his minor child rather than his named beneficiary.
10 Mistakes to Avoid When Divorcing Over 50
Investopedia | Catherine Fredman | December 7, 2017
“If late-life divorce were a disease it would be an epidemic.” … After a divorce, household income drops by about 25% for men and more than 40% for women, according to U.S. government statistics.
Two Court Rulings Highlight Divorce Planning Loopholes
Private Wealth | Micheal S. Fischer | November 27, 2017
Carefully drafting and monitoring estate documents is essential to avoid undesirable outcomes, particularly when divorce is involved.