--- title: Our Blog - AMF Divorce (10) description: From mortgage professionals to therapists to attorneys, the team at A.M. Financial works closely with these types of professionals. (10) --- ## A.M. Financial - [Services](https://amf-divorce.com/divorce-transition-services) - [Service Plan](https://amf-divorce.com/service-plan) - [Frequently Asked Questions](https://amf-divorce.com/frequently-asked-questions) - [Our Blog](https://amf-divorce.com/our-blog) - [About Amy](https://amf-divorce.com/about-amy) - [Contact Us](https://amf-divorce.com/contact-us) - [Services](https://amf-divorce.com/divorce-transition-services) - [Services](https://amf-divorce.com/divorce-transition-services) - [Service Plan](https://amf-divorce.com/service-plan) - [Frequently Asked Questions](https://amf-divorce.com/frequently-asked-questions) - [Our Blog](https://amf-divorce.com/our-blog) - [About Amy](https://amf-divorce.com/about-amy) - [Contact Us](https://amf-divorce.com/contact-us) [Book a Meeting](https://calendly.com/amymahlenmelander/consultdivorcefinancialplanning) # Our Blog ### Browse By: Everything Divorce Finances Planning Divorce Budgeting Financial Planning Budgeting Taxes Retirement Accounts Assets Divorce Options and Methods Maintenance Child Support Investments Retirement Property Property Division Real Estate Spousal Support Emotions Family Mediation Retirement Planning Separation Tips Co-Parenting Coaching Court Estate Planning Kids Counseling Home Interest Rates Lawyer Mediator CFI College Do It Yourself Gifts Healthcare Inflation Insurance Litigation PRE Remarriage Stock Stock Market Transfers Travel This is a search field with an auto-suggest feature attached. - There are no suggestions because the search field is empty. ## [Sworn Financial Statement: An Explanation of How to Complete](https://amf-divorce.com/our-blog/sworn-financial-statement) June 01, 2022 While divorce is undoubtedly a highly emotional event with ups and downs to sort through for years, it is also, more logistically, a paperwork-intensive process. After filing, the paper trail of... [CONTINUE READING](https://amf-divorce.com/our-blog/sworn-financial-statement) ## [Saving for Retirement after Divorce](https://amf-divorce.com/our-blog/retirement-after-divorce) June 01, 2022 In working with clients throughout Colorado, many divorced women do not save much for retirement. This is especially true if 100% of their income is coming from maintenance payments. It’s important... [CONTINUE READING](https://amf-divorce.com/our-blog/retirement-after-divorce) ## [What should we do with the home in our divorce?](https://amf-divorce.com/our-blog/home-in-divorce) June 01, 2022 If you are going through a divorce, one of the top questions likely on your mind is what to do with your marital home. This decision has financial, emotional, educational, and even social... [CONTINUE READING](https://amf-divorce.com/our-blog/home-in-divorce) ## [Part 2: Can I Financially Afford to Get a Divorce?](https://amf-divorce.com/our-blog/financially-afford-divorce-mahlen-financial) June 01, 2022 In [part one of this post](https://mahlenfinancial.com/discernment-counseling-mahlen-financial/), we discuss Discernment Counseling and how couples use this approach to make a decision about taking a next step to fix their marriage or choosing divorce.  [Deb Daufeldt of...](https://newchaptersolutions.com/about/) [CONTINUE READING](https://amf-divorce.com/our-blog/financially-afford-divorce-mahlen-financial) ## [How Does Market Uncertainty Impact My Divorce?](https://amf-divorce.com/our-blog/market-uncertainty-impact-my-divorce) June 01, 2022 During this time of bear market territory, high inflation, stock market volatility, and the threat of a recession, your money simply won’t go as far. You might wonder how these volatile market... [CONTINUE READING](https://amf-divorce.com/our-blog/market-uncertainty-impact-my-divorce) ## [Avoid Disinheriting Your Children](https://amf-divorce.com/our-blog/avoid-disinheriting-your-children) June 01, 2022 What happens when a parent remarries and carries out financial plans the typical way most married couples do? The new spouse is assigned 100% beneficiary to retirement accounts and life insurance... [CONTINUE READING](https://amf-divorce.com/our-blog/avoid-disinheriting-your-children) ## [Creating New Holiday Traditions of Giving with Kids and Loved Ones](https://amf-divorce.com/our-blog/creating-new-holiday-traditions-of-giving-with-kids-and-loved-ones) June 01, 2022 The first several holidays after a separation or divorce are extremely difficult. Adjusting to on and off parenting schedules where your kids are not with you everyday is challenging to cope with.... [CONTINUE READING](https://amf-divorce.com/our-blog/creating-new-holiday-traditions-of-giving-with-kids-and-loved-ones) ## [Handling the Holidays and a New Divorce](https://amf-divorce.com/our-blog/handling-the-holidays-and-a-new-divorce) June 01, 2022 The holidays are upon us and if this is your first year approaching them as a single individual, you may not know what to expect. Whether you have kids and a large  family to buy presents for or... [CONTINUE READING](https://amf-divorce.com/our-blog/handling-the-holidays-and-a-new-divorce) ## [What is a Divorce Coach?](https://amf-divorce.com/our-blog/what-is-a-divorce-coach) June 01, 2022 The process of divorce has significantly evolved in the last decade and many parties now include additional resources and professionals, beyond an attorney, throughout the process. Assembling a... [CONTINUE READING](https://amf-divorce.com/our-blog/what-is-a-divorce-coach) ## [Property Division Values, Part 1: Retirement Accounts](https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts) June 01, 2022 When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with... [CONTINUE READING](https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts) - - [8](https://amf-divorce.com/our-blog/page/8) - [9](https://amf-divorce.com/our-blog/page/9) - [10](https://amf-divorce.com/our-blog/page/10) - [11](https://amf-divorce.com/our-blog/page/11) - [12](https://amf-divorce.com/our-blog/page/12) - ##### About Amy With compassion and patience, Amy focuses on her client’s unique priorities to build a financial road map that provides clarity to make informed decisions today regarding the future. ##### Links - [Home](https://amf-divorce.com) - [Services](https://amf-divorce.com/divorce-transition-services) - [Our Blog](https://amf-divorce.com/our-blog) - [About Amy](https://amf-divorce.com/about-amy) - [Contact Us](https://amf-divorce.com/contact-us) - [Schedule a Meeting](https://calendly.com/amymahlenmelander) ©2026 Copyright. All rights reserved. A.M. Financial provides supporting financial information, evaluation and analysis to be utilized by the client and the client’s selected attorney if directed, during the process of their divorce. ervices provided in regards to this agreement are solely fee-only and do not involve investment or security advice or insurance transactions. All information is financial in nature and should not be construed or relied upon as legal or tax advice. A.M. Financial IS NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL OR TAX ADVICE. Individuals are encouraged to seek competent legal and tax advice from professionals who specialize in divorce and tax laws in their respective state. Amy Melander (CRD #4692263) is an Investment Adviser Representative of OneDigital Investment Advisors, LLC (ODIA). ODIA and A.M. Financial are independent and unaffiliated entities. ODIA does not offer or provide divorce financial planning services and any statements and/or opinions expressed by A.M. Financial do not represent the views and/or opinions of ODIA.   This website is a publication of A.M. Financial. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Content should not be viewed as personalized investment advice or as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. A professional adviser should be consulted before implementing any of the strategies presented. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "While divorce is undoubtedly a highly emotional event with ups and downs to sort through for years, it is also, more logistically, a paperwork-intensive process. After filing, the paper trail of your divorce begins with a sworn financial statement, which is a mandatory financial disclosure required by the state that details your income, expenses, assets, debts, and some of your financial history. This multi-page document, submitted with evidence of the details, is provided not only to the court but also to your former spouse. In Colorado, it is also referred to as your 16.2 mandatory disclosures. Many clients find this document extremely confusing. In this post, we hope to provide an overview of the purpose of the Sworn Financial Statement and tips to make it easier for you to complete it accurately. Understand the Goal The goal of the Sworn Financial Statement is honesty and transparency, both for your current and projected future situation, whereas after completion, settlement proposals can begin. The forms should not be completed with any motive in mind, including showing that you can balance your finances without a negative cash flow. You also should not inflate your expenses to an unreasonable level, hide income, or manipulate any of the figures. Do not feel the need to showcase that you are a financially responsible person through this statement either as if it is not true, it could end up hurting you more post-divorce. Focus on disclosing everything in the most honest way possible, despite financial changes that are unfolding. At any time, you can amend your Sworn Financial statement or correct details. This is particularly important if you expect changes to your career or living expenses as your divorce unfolds. In the event of a long divorce process, changes will inevitably occur. Is a Divorce in Your Future? Get Prepared with These Essential Tips. From the court and attorney’s perspective, this document will provide the basis to determine 1.) any financial needs from either spouse as well as 2.) the ability to provide a spousal support obligation. In Colorado, the case for spousal support starts with a calculation; however, the case can be continued to be argued based on the Sworn Financial Statement. Adhering to honesty and transparency and following these suggestions regarding your current and future situation will increase your credibility, not to mention possibly decrease your legal fees (less billable hours when attorneys don’t have to request items left out or argue over reasonableness). Sworn Financial Statements that are thorough and well documented will decrease the risk of post-decree litigation where one spouse argues something wasn’t addressed properly or missed altogether. Begin by Organizing Like any kind of large financial review, such as filing taxes, having your information organized and accessible makes the process of completing the Sworn Financial Statement smoother. Begin by reviewing your bank information and credit card statements. If you sign up for a service like Quicken or Mint, you can download all your transactions and create reports to learn exactly how much money is being spent in various categories. Some banks, such as Chase, provide this level of detail directly in your accounts. If you work several jobs or receive bonuses, this information will also help you understand where your income is originating, how often and help with averaging income over various periods of time. Looking at the big picture in this way will help you understand your overarching financial situation before you begin diving into the details of a possible settlement. Complete the Sworn Financial Statement Here is what to consider as you complete each section. Report Monthly Amount (sections 1-3) In these sections, income and expenses should be reported as monthly amounts. If the item occurs more or less than monthly, it is worth noting the frequency of the income and expenses. Here are some other important details: Income (Section 1): If you have unsteady or contractor income, average your income monthly by taking your total income for the year and dividing by 12. Include a note stating that the figure you provided is an average during the specific time period. Payroll frequency (section 1and 2): Pay special attention to reporting income, monthly deductions, tax deductions, and other payroll deductions properly. For example, there is a significant difference between income reported from bi-monthly payroll (where you multiply your paychecks by two) or bi-weekly payroll (where you multiply your paychecks by 26 and divide by 12). Social Security withholding (section 2): There is a maximum social security withholding amount each year. The timing of the payroll stubs being used to calculate this withholding may be misleading and lead to a significant difference in what is actually being withheld for the full year. For instance, there could be a large portion of the year that this withholding is not being taken out at all. A Certified Divorce Financial Analyst (CDFA) can help you determine if it is being reported correctly on you and/or your spouse’s Sworn Financial Statement. Expenses (section 3): Complete this section based on your current situation. Sometimes, this is difficult for individuals to accurately complete depending on their living situation and because they anticipate so many possible future changes. For future anticipated changes, small notes can be added under each expense headline with an asterisk where you can report how much the expense will be in the future and when. For instance, if you anticipate that you’ll be moving out of your marital home and renting a house for $2500 a month post-divorce, you can add that projected expense with an asterisk and site when it will occur. Common expenses that change are mortgage or rent, health insurance, car insurance, cell phone expenses, food, therapy, and car expenses. If you have not worked outside the home or in a full-time role in several years, it may be reasonable to add an expense for saving for retirement. Other items that will change are your tax withholdings that are listed in Section 2 – a CDFA will help you estimate how they will change in your future budget. This is another reason why the Sworn Financial Statement is not a reliable source to build a future budget as taxes can make a big difference. Lastly, many individuals struggle how to document an expense that is paid by both parties If this is the case, make a note with an asterisk detailing whether you are listing the full amount that is shared or only the amount you currently pay for. Disclosing this level of detail creates transparency, which will be favorable to the courts. Debts and Assets (sections 4-5) Regardless of whose name is on the property (debt or asset), it is prudent to document the item on your Sworn Financial Statement. Debts (section 4): Even if an account has a zero balance, disclose the account. All accounts need to be tracked throughout the process in case of future transactions, and for your protection. Running a credit report for you and your spouse to make sure this section is thoroughly addressed is prudent and recommended. Again, transparency is key when it comes to debts. As noted on the form, the court wants to see the minimum payment on the debt, not the actual payment made. This reinforces the need to complete a separate financial cash flow worksheet with a financial advisor as the Sworn Financial Statement is not reliable for actual and future cash flow and budget planning. Assets (Section 5): If you are having a hard time finding documentation of your assets, list the item and note that documentation is pending. Sometimes you aren’t aware of all the details of your assets. If you have heard your spouse talk about an asset but have not seen documentation, list it and request the required documentation. Household items (including jewelry, art, firearms, tools, furniture, etc) can be listed out separately or lumped together as a large sum. If there are items in particular that you want to be addressed in the division, list the item separately. This may apply to items of high value or sentimental value. When detailing the value, use “undetermined” or the expected sale price you would expect in a second-hand transaction (not the value of the item new). Miscellaneous Assets (section 5H): To complete this section, go through the list of potential miscellaneous items and check the box if you think you have any that fall into this category. If you are unsure of the value of these assets, your attorney or other advisors can help you or you can list the value as unknown or TBD. These items can be substantial, so do not skip over these or take this section lightly. Separate Property (Section 5I): This section includes assets brought into the marriage, gifted or inherited to an individual and kept as separate property. Some of these items may need to be reported in other asset sections like retirement accounts (inherited IRAs), investment accounts, real estate sections, childrens’ assets, and more. When you report these assets in Section 5, provide the total value (including separate value and marital value) and in the note section, report the separate value (which is the value at the time the item was brought into marriage or received), if known. If separate value is not know yet, update to unknown or TBD and your professional team will help determine the appropriate value.. If you have been married for a long time or have been hands-off with the finances in your marriage, you may not have all the information you need to complete this statement or even have access to all your accounts. Do your best to estimate based on what you do know and make a note that some line items are estimates and you are awaiting documentation. Include items such as account names if you know an account exists and leave the value blank adding a note that documentation is pending. If you are on account titles, you can request statements from the institution. Otherwise, your spouse will be required by the court to provide the documentation you need to complete the information. All information must be disclosed before moving into property division discussions. Plan Your Budget Because there is so much change involved with the Sworn Financial Statement, we do not recommend using this document for future cash flow planning or budgeting – this fact creates tremendous turmoil with many clients who are attempting to complete it and use it as such. Create a new budget exclusively for this purpose or create a few options with different scenarios, such as what your financial situation would look like if you keep the house versus rent an apartment. At A.M Financial, we can help you project different financial situations based on different living arrangements, incomes, settlement strategies, and more. We also support clients when completing sworn financial statements and answer your top financial questions throughout the divorce process. Contact us for a free consultation and get started with the financial planning you need to meet your obligations of today and goals of tomorrow.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Sworn Financial Statement: An Explanation of How to Complete", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-7puIjL.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/sworn-financial-statement", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "In working with clients throughout Colorado, many divorced women do not save much for retirement. This is especially true if 100% of their income is coming from maintenance payments. It’s important to consider how to prioritize saving for retirement despite competing priorities in your budget. In this post, you can learn why this happens and what you can do about saving for retirement after your divorce. Gender Income Gap One challenging aspect of saving for retirement for women is in a large part due to gender income gap issues. Traditional dynamics contribute to this reality, including lower pay for women, women having less financial knowledge, women needing more time away from work caring for family, divorced women financially providing for family, not receiving court awards or agreed upon shared expenses for children, and more. There are simply not enough finances to properly prioritize saving for retirement. It is extremely important to be aware of this challenge when 1.) negotiating asset division during your divorce and 2.) creating a future savings plan even if it means starting small. Putting off addressing this reality could mean working many more years than you would like or other undesirable outcomes. When you come up with a plan to save incrementally, your retirement savings can quickly add up. Prioritizing Children and Family If you are divorced and also a mother, your financial obligations to them may impact your ability to save for retirement. You may be overly taking care of your children and family’s financial needs to your own detriment. Some parties don’t help financially, even if they are under court order or if they do, do not comply fully with financial agreements, or don’t reimburse costs on time or at all. They may not agree that the child should receive medical care, go to day camp, play hockey, get a tutor, or attend counseling, for example. In which case, in a joint decision-making scenario, if the other party wants the child to participate in these activities, the financial responsibility falls on that party (often the mother). Getting retirement assets in your divorce For retirement planning, it’s critical to receive an equal portion of retirement assets in your divorce, even if you feel that getting the home or other cash options are better for you in the short term. You should push to receive at least 50% of the retirement assets in your divorce to lessen future savings needs that will be required. Even if you feel other assets are a priority at the moment, consider the long-term. Of course, it is difficult to save and when you’re in the thick of it, it is hard to see how important this is. Work with a financial specialist to model and project whether 50% of the retirement assets in your divorce can grow and mature into enough money for retirement, or if you may have to consider returning to work to supplement your income. When you consider your entire savings plan, take your own long-term needs into account alongside those of your children and family. Work with a financial expert to design a retirement savings strategy and budget that works for your unique situation. If you prioritize this now, know that there are substantial compounding effects over time. Contact Amy Mahlen of A.M. Financial to learn more about how we can help.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Saving for Retirement after Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-U2oRxV.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/retirement-after-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "If you are going through a divorce, one of the top questions likely on your mind is what to do with your marital home. This decision has financial, emotional, educational, and even social implications. Market conditions and current real estate dynamics can also play into how you divide your home. Recently, we talked with a Denver real estate expert, Shirley Jenkins, to get some insights on handling real estate during a divorce. In this post, Shirley outlines four considerations to keep in mind when weighing the pros and cons of selling your marital home. Financial Considerations First and foremost, either party who wishes to keep the marital home should meet with a financial specialist to understand whether financing the home on their own is an option. A financial advisor or lender can help you understand your bottom line numbers, determine whether you have sufficient assets, and help you understand the tax consequences of selling versus keeping your marital home. Regardless of what you decide to do with the home, recognize how important it is to meet with experts who will prevent you from making decisions based on emotions. Instead, experts ranging from financial advisors to tax specialists to mortgage lenders will give you facts and objective opinions based on numbers. A financial advisor or certified financial divorce analyst can help you understand whether you can afford your home right now. They can also help connect with experts who can pre-qualify you for another home purchase if you want to see what options are out there. However, many lenders will pre-qualify you at the top of your range and underestimate the additional expenses of owning a home, including maintenance costs and taxes. Right now, many people buy a home over the list price based on appraisals of recent sales in the neighborhood, and many homes are currently overvalued. These dynamics lead to higher tax bills because taxes are based on your assessment value. Therefore, if you end up buying a new home, and buying high, you will have to pay significantly more on taxes than you likely planned for when you were prequalified for your home loan. This, combined with common job changes during a divorce and current market declines can inflate your overall home costs even more. Emotional Considerations Once you understand whether you have the financial means to keep your marital home, it’s time to consider the emotional element of this decision. Ask yourself whether you want the home and the memories that go along with it. Some divorcing couples tend to relive those memories again, ranging from good memories of bringing your kids home from the hospital as newborns to remembering rooms where heated arguments occurred during the marriage. Sometimes, a divorce is a great time for a fresh start and it is in your emotional best interest to detach from that part of your previous life. No matter what you decide about the emotional aspects of the home, once you decide you want to sell it, it’s important to make a mental transition into seeing your home as real estate without the emotional attachment of the memories. You can take the memories with you, but decoupling the emotions from your home will make the sale easier. Timing Because market uncertainty, lending options, and even the age of your children are important considerations in selling a home (and purchasing a new one), it’s critical to consider timing as an element of this decision. For example, you may have a child with special needs or a particular attachment to a school that would make it extra difficult to move out of the neighborhood. You may be facing economic conditions that make it difficult to get a reasonable loan or are in-between jobs, which could make it nearly impossible to qualify for the size of mortgage you need. Notice how the particular timing of this situation impacts your decision to sell now, sell later, or keep the marital home. Option to Rent Sometimes, selling your marital home and renting is a great option, especially if you are in a situation where you could lose money keeping your home. While real estate is one of the best investments you can make, you generally have to hold onto the property for 7-10 years to get a good return on your investment. While rent can never be recouped, you don’t lose money when you rent either. In the current market, rent prices will continue to go up significantly, at least for the next 18 months. Paying rent each month means less money in your bank account for a downpayment for a house you own. Once again, get input from realtors, lenders, trusted friends, and people working on your divorce team who are experts in their field. Listen to their advice rather than make decisions based on emotion. Taking the next step in the process of selling or keeping your marital home as part of a larger division of assets isn’t simple. There are a variety of factors to consider and Amy Mahlen of A.M. Financial can support your decision by providing insight into the financial aspects of this decision. If you have additional questions about the Denver real estate market and what to expect from the current market dynamics, contact Shirley Jenkins to learn more.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "What should we do with the home in our divorce?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-QV5ycb.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/home-in-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "In part one of this post, we discuss Discernment Counseling and how couples use this approach to make a decision about taking a next step to fix their marriage or choosing divorce. Deb Daufeldt of New Chapter Solutions is an experienced Counselor who often leads couples through this process in Colorado. In her work, she often sees couples questioning whether they can afford to get a divorce, if they are willing to compromise their lifestyle as part of the decision, and whether they should stay together for financial reasons. When these conversations arise, Deb works with the team at A.M. Financial in various ways to help the couple understand what to expect on the financial side of the divorce. In this post, we’ll share what to consider and how to plan for the financial decisions that coincide with a divorce. Typical Financial Concerns When a couple or individual is going through Discernment Counseling, they often identify that they have different relationships with money. In fact, one of the top three reasons individuals or couples enter counseling and/or get divorced is due to different philosophies on spending or saving money. Even if a couple decides to get divorced, these conflicts continue to exist throughout the divorce process, with varying expectations about how money should be divided and spent as attorneys draft separation agreements and parenting plans. If a couple is considering divorce, typical financial questions that might arise include: Can I afford to live on my own? How much will my lifestyle have to change if I live on my own? What does the financial sacrifice look like if we choose divorce? Can we keep the house or buy two houses independently if we get divorced? Will I have to go back to work or get a different, higher-paying, job? How does divorce impact my retirement plans? With the current cost of living increasing and housing becoming a greater challenge for many individuals, it’s important to understand the answers to these questions and create clear financial expectations during Discernment Counseling. This approach ensures that couples truly understand the impact of their decision to get divorced. Is a Divorce in Your Future? Get Prepared with These Essential Tips. While finances isn’t a reason to stay together, having an accurate understanding of what post-divorce life will look like can help motivate a couple to exhaust all options to fix their marriage. Having the full picture helps a couple arrive at the decision to choose divorce with eyes wide open. Planning & Modeling If you have a number of money-related questions as you decide whether or not to move toward a divorce, it’s important to validate whether you can financially stand on your own two feet as part of the Discernment Counseling process. At A.M. Financial, we work with couples or individuals who are considering a divorce to understand what their future budget looks like, how the divorce will impact their retirement, what to expect with taxes, and whether they may need to return to the workforce to support their needs and lifestyle. We can model various scenarios to help you understand what will be required to maintain certain lifestyle standards with the current and future cost of living. Armed with this data, couples or individuals can have a clear understanding of the sacrifices they will need to make in order to exist on their own post-divorce. By visualizing this new lifestyle through detailed budgets and planning, couples can make more informed decisions about everything from the timing of their divorce to what kind of attorney they may want to hire, based on how they want to negotiate their divorce settlement—and depending on their financial goals. If you are at a crossroads in your marriage and considering Discernment Counseling to help you arrive at a “go” or “no-go” decision, consider pairing that process with sessions that help you understand the financial considerations of your divorce. Even if you decide not to move forward with your divorce, working with Amy Mahlen, Certified Financial Divorce Analyst, can give you additional insights that can help you address any financial challenges in your marriage, especially if that is a primary source of conflict for you and your partner. Get started with a free consultation by contacting us today.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Part 2: Can I Financially Afford to Get a Divorce?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-IC3Cpl.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/financially-afford-divorce-mahlen-financial", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "During this time of bear market territory, high inflation, stock market volatility, and the threat of a recession, your money simply won’t go as far. You might wonder how these volatile market conditions impact your divorce and what to consider as you negotiate the financials of your decree. In this post, we address how to respond to the impact of challenging market conditions in your divorce. Who is most impacted by these market conditions? Everyone is impacted on some level when the economy is in a downturn. However, individuals with short-term (within 12 to 24 months) money needs that will require withdrawals from investment or retirement accounts to pay for things, such as a new house, moving costs, furnishing a new home, a new car, attorney payments in the divorce, and more, will be more impacted by the current market conditions. Other individuals who will disproportionately feel the impact of the current economy in their divorce include: People who have divorce agreements that require the sale of stock to divide assets (try to avoid creating this type of agreement if at all possible in the first place unless taxes are addressed in your agreement) Individuals who exchange one type of asset, such as home equity, for a different type of asset, such as funds in a retirement account or pension payments. If you don’t fall into one of the groups above, you are in luck and you’ll be less impacted long-term if you can leave your money in the market until it rebounds. It could rebound in 8 months like the market fall in 2020 or in 5.5 years like during the great financial crisis. As scary as it can feel to lose 34.8% like the Dow Jones Industrial Average (DJIA) did in spring 2020 it’s important to remember that it gained 91.9% from March 2020 low to the high in January 2022. Remember, that you only really lose money in the market when you sell long-term investments while they are experiencing temporary setbacks. As a general rule of thumb, the longer your money can stay invested without selling, the better off you are. When are market losses normal? There are different investment strategies to consider for short and long-term needs. Assets that are intended to provide for future long-term needs, such as retirement, should be invested with an appropriate level of risk. You should expect periodic losses over time in order to achieve higher levels of growth. Selling assets that are invested and intended for future goals, such as retirement, during periods of market corrections, can be detrimental to long-term strategies. Because selling assets that have incurred market losses is not ideal, make sure you have exhausted and considered all other financial possibilities to meet your financial needs before doing this. This includes budget modifications, employment opportunities, payroll tax withholding modifications (if appropriate), loans against your 401K or home, or other available loans (if a loan works within your future cash flow). What does this mean for my divorce? In your divorce, the level in which different assets are changing in value should be taken into consideration if assets are being swapped. For example, if you agree to keep a higher amount of home equity in exchange for retirement assets, it’s important to understand possible differences in future growth and/or loss potential. Taxes should also be considered as it can skew the end results. If you have to pay 30% taxes on funds coming out of an IRA versus little to no taxes on equity from the primary residence, what looks like a dollar-for-dollar exchange on the surface may be considerably lopsided. During and after your divorce, review the level of risk associated with your accounts and investments with your financial advisor to make sure it is appropriate for you and your future situation. What can you do to protect your assets? If you must sell assets, and you have exhausted all alternatives, make sure to work with your CDFA or financial advisor to understand the best strategy to do so. He or she can advise you on where withdrawals are more efficient by reviewing the accounts and investments available. Don’t forget to consider tax implications and understand if any tax saving strategies are possible. If you are going through a divorce, create a decree that leaves your money invested in the market if you don’t need it right now to protect your assets. Avoid selling during market downturns like we are experiencing now and instead, split the shares in a way that doesn’t require you to sell them. This can usually be achieved by transferring assets, rather than selling. Lastly, if you received or will receive a lump sum of money in your divorce, consult with a financial expert about whether investing in the stock market as a long-term strategy is a good fit for your needs. Based on your unique situation, this can be a great time to invest to meet future financial goals. At A.M. Financial, Amy Mahlen, CFP®, CDFA® is a qualified professional with over 17 years of experience who can help you navigate questions you have around current market conditions and your divorce. Contact us to schedule a free consultation and learn how we help clients like you understand financial options in challenging times like these. Divorce transition/financial planning services offered by A.M. Financial. Investment advisory services offered through WealthSource Partners, LLC (“WSP”). A.M. Financial and WSP are independent and unaffiliated entities. All investments include the risk of loss and nothing herein should be construed as a guarantee of any specific outcome or profit. Past performance is no guarantee of future results. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The statements and opinions expressed are those of A.M. Financial and Amy Mahlen and do not necessarily represent the views and/or opinions of WSP or any other associated or affiliated person of WSP. Furthermore, the statements and opinions expressed are for informational and educational purposes only and should not be construed as legal, tax, accounting or investment advice. All statements and opinions are current only as of the time made and are subject to change without notice.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "How Does Market Uncertainty Impact My Divorce?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-M9uR5o.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/market-uncertainty-impact-my-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "What happens when a parent remarries and carries out financial plans the typical way most married couples do? The new spouse is assigned 100% beneficiary to retirement accounts and life insurance policies and joint ownership with rights of survivorship is established on all other assets. Both husband and wife seem to have a good relationship with the step children and promise that if anything were to happen to the other, they would make sure each other’s children would receive their parent’s intended inheritance. There must be trust in a relationship – seamless, right? Things might go well to start, however, as the timeline moves forward things could get messy. The husband dies unexpectedly at the age of 50. Life for the surviving spouse is difficult initially while grieving but eventually they move on and start dating. Five years later a new wedding band is on her hand. The picture slowly starts to change when a new marriage comes into play regardless of the relationship with the prior step children (existing or not). The original intention and promise to the step children of the prior marriage could fall in the hands of a different relationship with its own complications. As played out before with the first couple, all the normal estate planning changes that go along with a new marriage could occur again – assigning the new husband as beneficiary and titling assets in joint name with rights of survivorship, etc. Another contributing factor is that there is no way of knowing if the new spouse, who is next in line for step children’s inheritance, will retain a good relationship with the original step children. This scenario can easily lead to the step children being disinherited. The good news is that there is a safer way to make sure a spouse in remarriage is financially provided for without risking your intentions for your children of a prior marriage. Proper planning with a trusted estate attorney and a qualified terminable interest property trust (Q-TIP) can provide for your partner comfortably while including provisions where you can be assured your children will be cared for after as well. Take the time to align your money with your values- it won’t do it by itself, and your relationships are worth it!", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Avoid Disinheriting Your Children", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/e261dd_48e4c9141ddd433599cd2903da15a010~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/avoid-disinheriting-your-children", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "The first several holidays after a separation or divorce are extremely difficult. Adjusting to on and off parenting schedules where your kids are not with you everyday is challenging to cope with. Even with adult children, time is typically divided with by household. Some traditions continue and others end. One of the best ways to cope is actively building new traditions, including giving. The wonderful thing about giving is there are many different ways to give – it doesn’t always include donating money! There is no question that bank accounts are extremely tight after a separation or divorce. Engaging with your children and loved ones providing the gift of time, sharing talents and building community can be extremely powerful and even healing. Here are some ideas to help you get started with your children, adult family members and/or friends: Remember that you and your family have been through a lot so don’t put too much pressure on yourself either! 1. Discuss values A great way to strengthen bonds is by discussing values. Brainstorm what is important to each person. Provide reasons why you value each cause. Discuss if you feel it is important to support a cause locally, nationally or worldwide. Provide examples of support you have previously given to children who need some help to come up with some ideas of their own. Come up with a final list of values/causes where everyone feels like they have a connection with. 2. Research Assign each person a cause to research ways in which you can be supportive. Some examples include animal adoption, homelessness, hunger, the environment, medical cure research, caring for the elderly etc. With younger children you can do the research and brainstorming together. Identify organizations you would like to possibly support and the various ways to support them (volunteer, organizing food or clothing drives, donations, etc.) Websites such as, charitynavigator.org or charitywatch.org, are available to search and review organizations if you need a place to start. 3. Inventory Remember that giving should not deplete us from time, money or emotionally where we have nothing or very little left. It is an offering where you should be able to remain stable in addition to receiving the gift of giving. Conduct an inventory of what you all have available to give. Don’t leave anything out. Include items such as time available, hospitality, cooking, toys, clothes, blankets or sleeping bags that aren’t being used, being handy, sewing, artistic abilities, organizational skills, etc. This is a great exercise to determine what you have that is valuable even if it is not sitting in a bank account. 4. Impact Discuss how supporting different causes in different ways can affects the overall outcome or impact. For example, the number of people you are able to impact versus the degree in which one person may be affected. It maybe that you decide that helping your elderly neighbor or inviting them over for dinner may have the impact that you connect with that also aligns with your supply of available inventory for giving. 5. Build a plan Determine which causes you will support and how – ideally at least one where everyone is supportive and can be involved together. Make a plan regarding each person’s ability to contribute and how to carry out. For example, if you would like to help feed the homeless, scheduling will need to be completed. If you are organizing a clothing or food drive in your neighborhood plan details regarding how/where to gather items, when and where the items will be donated and how to get your community involved (flyers, Facebook, Nextdoor, etc). If monetary donations are to be made, have your kids determine how they will contribute – by using some of their allowance or planning additional chores. Consider matching donations for your children to encourage your families overall support and involvement for the cause. Wishing you all a peaceful and restorative holiday season!", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Creating New Holiday Traditions of Giving with Kids and Loved Ones", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/0cbd19_d4b3478c20dd4b35ab3ca26e85b68c68~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/creating-new-holiday-traditions-of-giving-with-kids-and-loved-ones", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "The holidays are upon us and if this is your first year approaching them as a single individual, you may not know what to expect. Whether you have kids and a large family to buy presents for or are concerned about not having a place to spend Christmas with others, it’s important to start planning this season earlier when you are divorced. It’s also critical to consider how the holidays will impact your budget, spending, and financial situation. In this post, we cover what to consider as a newly-divorced individual from both a scheduling and financial perspective, and how you can adequately prepare for this season. Holiday Schedules Depending upon whether you still have kids living in the home, your holidays may look very different than year’s past. If you are newly divorced, take time to review the details of your parenting plan, including the exchange times and locations. By understanding exactly what time you have with your kids, you can maximize the quality of that time. Recognize that it can be very hard to be away from your kids and miss holiday rituals in the first years of your divorce. However, if you don’t have your kids on Christmas morning or during other important holiday moments, choose another day to observe them. This approach will help you create new traditions despite the day of the calendar. The same goes for Hannakah or other religious and non-religious celebrations and traditions. Because you don’t have a default relationship like you had with your spouse, plan ahead and decide where you’ll spend important holiday times so you can avoid spending too much time alone. Don’t be afraid to carve out some time for yourself during this first holiday alone. That important time of reflection can be spent focusing on this next chapter, setting goals, and reflecting on the past since you just went through a major life change. Tap into gratitude for the lessons of your divorce and the transformation that occurred. Consider new traditions for yourself as well. Volunteering is a popular way to give back during the holidays in a meaningful way. While the holidays can classically be a time of over-indulgence, consider a day or weekend of self-care around this time by treating yourself to a financially reasonable spa day, having your closest friends over for a potluck-style dinner, or attending a holiday event to get in the spirit. Lastly, you may question how to approach gifts this year. Many divorced parents will give their former spouse a gift in the early years, especially if it showcases kindness and respect on behalf of your kids. When it comes to kids, discuss gifting expectations with your ex so your kids don’t get duplicate gifts or have wildly different gift experiences based on your set budgets. Lastly, consider gifts that are experiences as you likely have less time with your kids overall now. Consider gifts that will provide a lasting memory by giving them life experiences you can share together like indoor skydiving, tickets to sporting events, weekend adventures in the Colorado mountains, and more. Holiday Finances While scheduling can be a major challenge for newly divorced individuals, the financial aspects of the holidays can also challenge your budget. It’s important to financially plan for holiday spending all year long. First, set realistic expectations around gift-giving with your family and children. This includes suggesting setting price limits for gift giving. While not always possible the first year, it’s ideal to work these costs into your budget and set aside some money each month for holiday gifts, now that you are on a tighter budget. This year, inflation will make it feel as if your dollars don’t go as far. Managing your holiday spending and avoiding debt once you are divorced is very important. Holiday expenses, including paying for holiday events, food to host a family dinner, new holiday decorations, and of course, gifts, can quickly add up. It’s hard to get out of debt with fewer financial resources and more fixed expenses, and also important to stay financially healthy in order to qualify for a home or auto loan post-divorce. Not to mention, saving for retirement should be a far greater long-term priority than creating a picture-perfect holiday celebration for your family. In order to budget effectively for the holidays all year long, and stay out of debt, work with a financial planner to set reasonable, monthly allocations to a holiday fund based on your income. This year, notice whether you are overdoing it and trying to compete for your kid’s or family’s attention by overbuying or overextending yourself with holiday events, decorations, gatherings, and more. Getting into debt as a single person can be detrimental to your long-term financial situation and it can take a lot more time to recover from debt post-divorce than you might expect. Contact Amy Mahlen, Certified Financial Planner™ at A.M. Financial, to learn more about our services and how we can help you better prepare for the financial impact of the holidays moving forward.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Handling the Holidays and a New Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-kCcZ1U.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/handling-the-holidays-and-a-new-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "The process of divorce has significantly evolved in the last decade and many parties now include additional resources and professionals, beyond an attorney, throughout the process. Assembling a team of specialists to ensure you achieve the outcomes you want in your divorce is becoming the norm. In fact, with so many professionals to help, you might even be overwhelmed trying to decide which divorce professionals you should choose to work with. In this post, we’ll specifically outline the role of a coach in your divorce, how coaches can help accelerate the outcomes you want, and circumstances that might make hiring a coach particularly helpful. Do I need a divorce coach? While some professionals might not be necessary in every divorce, a coach is universally helpful throughout the process and everyone could benefit from this extra layer of support. However, a divorce coach is especially important if you have unique circumstances in your divorce, including: Leaving a difficult relationship, such as one characterized by narcissism or abuse A dramatic life change post-divorce, such as re-entering the workforce, a significant change in lifestyle, or moving into single parenthood Complex issues surrounding the children or finances Hiring a divorce coach can provide you extra support in these challenging situations or simply be a more neutral third party to help solve the top issues you are encountering in the process. What does a divorce coach do? You have likely hired and worked with coaches throughout your life, from little league coaches to personal trainers to career coaches. The role of any coach is to train, inspire and motivate individuals based on their unique goals and needs. The role of a divorce coach is no different. They offer motivational and emotional support, provide resources, and help you see a future vision of your life. They draw upon experiences with other clients like you to help you understand what is possible and how you can achieve your ideal post-divorce life. The role of a coach is also to help you manage and overcome difficult emotions, including fear, anger, and uncertainty. However, sometimes a coach will recommend more support on these topics and refer you to a psychologist who has extensive credentials and training on emotional support. Coaches compliment, but do not replace, professional resources because they do not provide any legal, settlement, or financial support. However, their training and experience may make them a specialist in navigating certain circumstances such as co-parenting, career changes, relocation, and more. A coach can help you see the pros and cons of various options in your divorce and can serve as a sounding board as you make decisions throughout the divorce process. The benefits of a divorce coach Beyond emotional support, divorce coaches can save you time and money during the divorce process. Coaches are less expensive than attorneys and can help you talk through and make decisions (without providing legal advice) for your attorney to action. The alternative would be to discuss these decisions with your attorney at a much higher fee, or with a friend or family member that might be biased toward certain outcomes. As he or she understands what is important to you, your coach will offer a more holistic perspective than other professionals who are specialized in just one area, such as lawyers and financial advisors. Having an unbiased third party can help you separate your emotions from the best next steps. Not to mention, hiring a coach helps relieve friends and family from the burden of supporting you through this difficult time, especially if they disagree with your decision to get a divorce. Overall, a coach will accelerate your healing with the support you need and help you get on with your new life. Choosing a divorce coach Like choosing any professional, it’s important to ask the right questions and select a coach who aligns with your circumstances and values. Typical interview questions might be around preferred communication styles, specific experience, and cost. Make sure your coach likes to communicate in the ways you prefer, whether that is via weekly phone calls or daily emails, or a mix of methods. Coaches with specific experience in the areas you are struggling with will probably provide more realistic guidance to help you overcome these challenges so do inquire about their typical client. Cost will always be a consideration and some coaches may work on a sliding scale to accommodate clients of various income levels. Lastly, ask about professional certifications and training from the coaches you interview to understand their scope of expertise. At A.M. Financial, we work alongside divorce coaches to help you prepare for the best financial future possible. If modeling the pros and cons of various settlement options and what they mean both long and short-term would be helpful in your divorce, we can provide that type of expertise. Or, if understanding the tax consequences of your divorce is important to you, we can help. We start our partnerships with a free consultation, which you can request at any time.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "What is a Divorce Coach?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-OEmjdJ.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/what-is-a-divorce-coach", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with outstanding debt balances that are deemed to be marital. Typically, above all else, the focus and end goal is to split property 50-50. With so much emphasis on this spreadsheet that dictates the remainder of your financial future, is there anything missing that could dramatically skew the end results? The old cliché of ‘nothing is certain in life except death and taxes’ rings loud and true in divorce, don’t ignore them. As it applies to the property division worksheet, are taxes being considered? How can evaluating taxes dramatically change the actual results down the road? In this series, retirement accounts, non-retirement investments, home equity and rental property will be discussed. Part 1 – Retirement Accounts The reason most people sock money away in a retirement account is because it offers tax benefits. Most of the time, the statement value is not the amount the individual receives because the value is before-tax. If retirement assets are being used to offset home equity division or if there are current cash needs from retirement accounts that will trigger taxes, the after-tax values should be considered. Consider chopping 15%-39% plus an additional 10% early withdrawal penalty away from the current value listed, and now it may only be worth a fraction of what appears on the spreadsheet. Be sure to pay attention to Roth IRAs and Roth 401ks. These accounts are a ‘horse of a different color’ in the retirement category because contributions are made on an after-tax basis. If Roth assets are withdrawn after the age of 59 ½, the earnings are completely tax-free! During retirement the value of a Roth does not go on Uncle Sam’s chopping block versus other retirement assets that are 100% taxable. The earning potential of a Roth is also considerably more powerful because of this difference as well. For example, if husband kept an $100,000 IRA and wife retained her $100,000 Roth IRA today, 10 years down the road during their retirement with no additional contributions, the accounts would each be worth $200,000 with a 7.2% annual return. However, if the husband were to distribute his $200,000 he would have $140,000 (assuming he was in the 25% tax bracket plus state taxes) whereas the wife could distribute her Roth account and still have $200,000 – a big difference! Roth IRAs have more convenient features – any contributions made to a Roth IRA can be withdrawn at any time tax-free and penalty-free! Therefore, if someone has current cash needs the actual value of a Roth IRA would be significantly more to them individually. Conclusion Overall, the current values listed on the property division worksheet are not useful when applied to individual circumstances and priorities moving forward. In some cases, short term cash needs are more important versus long term retirement savings/income for others. The real value of the property division and the actual end results has more to do with your priorities then it does relying on a 50-50 split. Let’s build a property division strategy that works best for you and your future! You wouldn’t retire without a financial plan… it might be messy! Don’t divorce without one either! Get the information you need to get started here, or Click here to schedule a free initial consultation with Amy", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Property Division Values, Part 1: Retirement Accounts", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/e261dd_6d7ba347aa384b24a41dfc721cad00c3~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ```