Top 10 Tips On Getting Your Best Divorce Settlement

Annapolis MD

22 February, 2022

11:45 AM

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This is a paid post contributed by a Patch Community Partner. The views expressed in this post are the author's own, and the information presented has not been verified by Patch. If you have read any of my prior pieces here on Patch, you know I am an advocate for winning in divorce. No, I don't mean destroying your spouse in court. Winning in divorce means taking control of the process to create the best possible outcomes so that you will feel good about the choices you've made for you and your family—now, a year from now, and well into the future. That means working with the right divorce professionals, gathering knowledge, and creating a plan. Knowing that you got your best divorce settlement means you've considered a lot of things that are probably not front and center for you or most divorce attorneys. Below is a list of items that you should include when putting together your divorce settlement agreement. A CDFA® divorce financial planner or mediator is your best resource for ensuring you and your spouse are agreeing on a settlement that is fair and strategically planned for an optimal outcome. ITEMWHY IT'S IMPORTANTCONSIDERATIONS#1 Properly identify marital and separate propertyYou split marital assets but keep your own separate property.It's not always clear about what constitutes marital property. Commingling of funds, growth on real estate and owned businesses may have an impact on the amount to be divided. A Certified Divorce Financial Analyst ® (CDFA®) can conduct a separate property tracing to determine what is marital and what is separate. Most attorneys take a simplistic view of this and can incorrectly assign separate assets as marital.#2 Assess tax implications of alternative settlement optionsNot all assets are treated the same with respect to taxes. Trading assets of equal value but different tax treatments can have a huge impact on long-term financial health.What are the applicable tax classifications for retirement funds vs. real estate vs. stock options, etc.? Is the after-tax division what you expected given the before-tax evaluation?Consider both short- and long-term financial implicationsAlimony, child support, and how you split assets can result in substantial differences in long-term financial health even when the short-term needs are met and the division of assets looks fair.It's important that you look at the impact of the divorce on near-term as well as future financial health. A CDFA® can provide financial projections for both spouses before they agree on a particular settlement. Cash flow and liquidity, investment growth rates, taxes on retirement withdrawals are all critical considerations that should be viewed over the foreseeable horizon.Accurately value and divide pensionsMany misunderstand what figures to use for division of a pension. It's not straightforward and attorneys will hire other professions for valuation—at your expense.Pensions are subject to a coverture fraction, accurate identification of payout amounts, cost-of-living increases, and the appropriate discount rate.Streamline asset divisionSimplify administrative and legal follow-upSometimes it's better to leave a pension, other retirement account, or business owned whole and aligned with just one of the spouses. Other assets or structured notes can be used to avoid selling assets or dealing with Qualified Domestic Relations Orders (QDRO's).Proper account for stock options and restricted stock units (RSU's)Employee stock options earned while married are a marital asset whether paid before separation or divorce.Determining the marital portion, vesting, and valuation of stock options and RSU's is complicated and best left to financial specialists.Look at the option for alimony buyoutNobody likes alimony.Alimony payments are painful to the obligor and uncertain to the obligee. Consider the option of determining the present value of the future payments and include it in the division of assets.Protect future alimony and child support with life insuranceIf a buyout isn't possible, the recipient should have protection if something happens to the provider of support.Obtain insurance protection that you know won't be cancelled.Include a detailed parenting planEven if you and your spouse fundamentally agree on custody and how to raise the children, there may come a time when circumstances change or there is a difference of opinion.Parenting plans should cover a wide array of issues and be included in a property settlement agreement to protect the children and both parents.Accurately account for business interestsThere are a variety of ways to handle business ownership in divorce, as they can be used for support calculations or as an asset. If an asset, some valuation approaches are more expensive and time-consuming than others. As income, it may be variable, making it a challenge to determine the appropriate monthly support figures.Make sure you have an accurate assessment of businesses owned before settlement options are reviewed. In many cases, you don't need to pay for a full-blown business valuation. For more information about making good divorce decisions and to learn about TruNorth Divorce and how can help you, visit https://trunorthdivorce.com About TruNorth Divorce Solutions TruNorth Divorce provides couples, individuals, and family law attorneys in divorce. If a couple is committed to negotiating a divorce settlement, they will work with them as a mediator to develop a win-win settlement. If they have minor children, they will also guide them through developing a comprehensive and effective parenting plan that benefits the entire family and ensures their children's future happiness and security. Their success rate in mediation is over 95%. When cooperation with the other spouse isn't possible, they'll work with just one of the spouses individually as their advocate and coach, supporting and complementing their attorney throughout. TruNorth Divorce ensures that what an individual and their attorney are fighting for is truly in their best interest. They'll assist a client throughout the entire divorce process—and even accompany them to meetings with their spouse and attorneys to back them up and get their best settlement possible. Moreover, working with TruNorth Divorce can actually help reduce an individuals legal fees and the time to resolve their case For attorneys, TruNorth Divorce can take care of the detailed financial work, making case preparation easier and laying the groundwork for better property settlements. They can work behind the scenes or join the team as a divorce financial expert, developing creative solutions, identifying tax consequences, providing proper valuations of all assets, and assessing both short- and long-term implications of alternative settlement scenarios. TruNorth Divorce offers complimentary consultations. To schedule, go here: https://trunorthdivorce.com/appointment/ or call 484-321-6990. This post is an advertorial piece contributed by a Patch Community Partner, a local brand partner. To learn more, click here.