--- title: Our Blog - AMF Divorce | Finances (3) description: Finances | From mortgage professionals to therapists to attorneys, the team at A.M. Financial works closely with these types of professionals. (3) --- ## 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) Posts about # Finances (3) ## [How to divide non-retirement investments in your divorce](https://amf-divorce.com/our-blog/how-to-divide-non-retirement-investments-in-your-divorce) May 14, 2023 While the goal of every divorce is a fair and equitable division of overall assets, the specific portfolio of that division is unique in every divorce. Most divorce professionals will build a... [CONTINUE READING](https://amf-divorce.com/our-blog/how-to-divide-non-retirement-investments-in-your-divorce) ## [The Child Tax Credit in 2021](https://amf-divorce.com/our-blog/the-child-tax-credit-in-2021) May 07, 2023 If taxes aren’t confusing enough, the Child Tax Credit will change substantially in 2021, impacting 2020 filings and beyond. These changes will add complexity to filing for couples going through a... [CONTINUE READING](https://amf-divorce.com/our-blog/the-child-tax-credit-in-2021) ## [How do temporary orders work and do they impact my finances?](https://amf-divorce.com/our-blog/how-do-temporary-orders-work-and-do-they-impact-my-finances) April 13, 2023 If you have recently filed for divorce, one of the first things that could happen is the establishment of temporary orders. These orders can set the tone for the overall divorce settlement and... [CONTINUE READING](https://amf-divorce.com/our-blog/how-do-temporary-orders-work-and-do-they-impact-my-finances) ## [4 Methods of Divorce and How They Impact Your Finances](https://amf-divorce.com/our-blog/4-types-of-divorces-and-how-they-impact-your-finances) April 05, 2023 There are many ways to approach the divorce process. The options you have to get from deciding to get a divorce to finalizing your divorce and the ways you might even mix and match these methods... [CONTINUE READING](https://amf-divorce.com/our-blog/4-types-of-divorces-and-how-they-impact-your-finances) ## [Decoding Divorce: Stock Options & Restricted Stock](https://amf-divorce.com/our-blog/decoding-divorce-stock-options-restricted-stock) March 09, 2023 As part of evaluating your total marital estate, various types of stock might come into play. Two of the most confusing of those stocks include stock options and restricted stock, which need... [CONTINUE READING](https://amf-divorce.com/our-blog/decoding-divorce-stock-options-restricted-stock) ## [Building Your Relationship With Money](https://amf-divorce.com/our-blog/building-your-relationship-with-money) March 07, 2023 You manage many relationships in your life with the things and people most important to you. Some of those relationships might be difficult, especially with family members or ex partners. Others... [CONTINUE READING](https://amf-divorce.com/our-blog/building-your-relationship-with-money) ## [Understanding Pension Plans in Your Divorce](https://amf-divorce.com/our-blog/understanding-pension-plans-in-your-divorce) March 01, 2023 If there wasn’t enough to sort through, employer pension plans can be a particularly confusing aspect of dividing your assets in a divorce. From decoding what pension plans truly are to... [CONTINUE READING](https://amf-divorce.com/our-blog/understanding-pension-plans-in-your-divorce) ## [Colorado Health Insurance and Your Divorce: Your Top 8 Questions, Answered](https://amf-divorce.com/our-blog/colorado-health-insurance-and-your-divorce-your-top-8-questions-answered) February 15, 2023 Sorting through the details of your divorce can be overwhelming at a time when [so much is changing](https://mahlenfinancial.com/divorce-a-catalyst-for-change/) in your life. It’s critical to work with [experts](https://mahlenfinancial.com/divorce-professionals-mahlen-financial/) who can help you sort through decisions ranging... [CONTINUE READING](https://amf-divorce.com/our-blog/colorado-health-insurance-and-your-divorce-your-top-8-questions-answered) ## [Financial Self-Care: Prioritizing Your Financial Needs](https://amf-divorce.com/our-blog/financial-self-care) February 02, 2023 Over the last decade, you’ve likely heard more about the importance of self-care or ways you can proactively take care of yourself to reduce stress and burnout. Because finances and money can be a... [CONTINUE READING](https://amf-divorce.com/our-blog/financial-self-care) ## [Playing Your Cards Right: Divorcees Who Pay 0% Capital Gains Tax](https://amf-divorce.com/our-blog/capital-gains-tax-mahlen-financial) February 02, 2023 If you are recently divorced, you may be experiencing a lot of ‘firsts’. For example, you may have to [do your own taxes for the first time](https://mahlenfinancial.com/post-divorce-financial-to-do-list/) and feel like a deer in headlights, frozen and overwhelmed... [CONTINUE READING](https://amf-divorce.com/our-blog/capital-gains-tax-mahlen-financial) - - [1](https://amf-divorce.com/our-blog/tag/finances) - [2](https://amf-divorce.com/our-blog/tag/finances/page/2) - [3](https://amf-divorce.com/our-blog/tag/finances/page/3) - [4](https://amf-divorce.com/our-blog/tag/finances/page/4) - ##### 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 the goal of every divorce is a fair and equitable division of overall assets, the specific portfolio of that division is unique in every divorce. Most divorce professionals will build a property division spreadsheet to capture details, but there is so much more to consider. Although there are several categories of assets, extra value is often placed on retirement assets (401Ks, pension plans, and IRAs) and home equity, as the value of those assets tends to be higher and therefore can dramatically impact the parties’ futures. In this post, we help you understand what to do with non-retirement investments and how to ensure you have the right help to make these important decisions. Which non-retirement investments should I evaluate? Non-retirement investments include cash, certificates of deposit, stocks, mutual funds, money in brokerage accounts, rental property, land, businesses, and valuable assets such as cars, jewelry, precious metals, antiques, collectibles, and more. While your 401K might not have much emotional weight to it, often some of the non-retirement assets can have personal and sentimental value. Some may remind you of the marriage and you may choose to get rid of them along with the attached memories, while other items could be irreplaceable and may have strong sentimental value, such as an antique. Consider which non-retirement assets have unique value and future potential value along with others that might leave you with maintenance expenses and tax implications. What to consider as you negotiate an ideal division of assets A trusted financial advisor and divorce attorney are critical allies who can advise you on a non-retirement investment negotiation strategy. While you may understand some assets better than others, such as cash versus rental properties, you don’t want your understanding of the investment to solely drive your decisions around asset division. Instead, let the professionals help you understand the full scope of each asset and how each of them align with your risk profile and financial goals. For example, your goals may align better with some assets than others. You may need cash for a new home purchase, but don’t want to deal with the maintenance of a vacation home, and therefore need a negotiation strategy that helps you create the life you want and the assets that support that future vision. Lastly, the tax implications of certain investments may change their overall, long-term value or create surprise tax consequences. By working with a CFDA, you’ll understand what to expect and how to use these projected figures to negotiate intelligently, creating the outcomes you want in both the short and long-term. While a 50/50 split might be the default thinking in most divorces, it’s critical to look beyond an even division of assets, and that’s where a financial expert can help. Educate yourself by working closely with a financial advisor who can be objective, alongside your attorney, and help you remove emotion from your decisions. A third party and help you fully understand the current and future financial implications of your division of assets. Contact us to schedule a consultation 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" : "14/05/2023", "datePublished" : "14/05/2023", "headline" : "How to divide non-retirement investments in your divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-vv73ar.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/how-to-divide-non-retirement-investments-in-your-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 taxes aren’t confusing enough, the Child Tax Credit will change substantially in 2021, impacting 2020 filings and beyond. These changes will add complexity to filing for couples going through a divorce. The new tax credit will also create complications for divorced parents with dependents if the child credit is typically alternated between the parents. In this post, we dive into the details of this new Child Tax Credit and what it means for you. Basic Details Let’s start with the basic details of this new credit. Starting with 2021 filings, the Child Tax Credit offers up to $3,000 per qualifying dependent, which is a child 17 or younger on December 31, 2021. The credit increases to $3,600 if the child is under 6 on December 31, 2021. For comparison, in 2020, the Child Tax Credit was $2,000. As a reminder, this is a tax credit and therefore it reduces your tax bill dollar-for-dollar. Qualifications While these new Child Tax Credits apply to anyone with a dependent, the dollar amount of the credit begins to phase out with incomes over the following amounts: For the 2020 tax year: $400,000 for married filing jointly $200,000 for everybody else For the 2021 tax year: $75,000 for single filers $150,000 for married filing jointly $112,500 for head of household Other Eligibility Requirements The child must qualify as a dependent to you and/or an ex-spouse. Dependent requirements include: The child lives with you (or the other parent) for at least half of the year. You or the other parent provide at least 50% of the child’s cost of living and support. If the child does not live with you the majority of the year but you have a divorce agreement that allows you to claim the child credit in specific years, the custodial parent must sign Form 8332 and provide it to the non-custodial parent to file with their taxes. In order to take the Child Tax Credit for the 2020 tax year, the child has to be 16 or younger on December 31, 2020. To be eligible for the Child Tax Credit for the 2021 year, the child has to be 17 or younger on December 31, 2021. In addition to these eligibility requirements, you and your child must be U.S. citizens to take advantage of the Child Tax Credit. Monthly Advanced Payments In addition to the changes above, for the 2021 tax year, there are special Child Tax Credit rules due to COVID. These are designed to help Americans recover from the financial strain the pandemic put on jobs and families. The specific rules are part of the American Rescue Plan Act of 2021 and provide parents with the option to receive half of their 2021 child tax credit in the form of monthly advanced payments, and receive the other 50% on their taxes (when they file for 2021). To take advantage of these monthly advance payments, you can use either your 2019 or 2020 income, depending which one has been filed, to determine if you qualify for advanced credit payments to calculate your tax credit. The IRS will use your most recent tax return to determine whether you qualify for the Child Tax Credit and to determine your kids’ age requirements. In this cash payment program option, you get six monthly payments starting in July and running through December of 2021. For example, if you qualify for a $6,000 Child Tax Credit for two kids, you can get six $500 payments, monthly, between July and December (for a total of $3,000) and then claim the remaining $3,000 on your taxes when you file for the 2021 tax year. Of course, you can still claim 100% of your 2021 Child Tax Credit on your taxes when you do your 2021 taxes, if you so chose. The advanced monthly payments are simply an option. Due to the income qualifications for the Child Tax Credit decreasing substantially this year, it is possible to receive advanced monthly payments for this credit based on 2020 tax returns and having too high of an income in 2021 to qualify, due to these lower income qualification requirements. If you receive advanced payments and do not qualify when you file your 2021 taxes, you may not have to pay back the overpayment (unless your actual 2021 income is above a certain amount). Here are details you need related to repayments: Families with 2021 adjusted gross income at or below $40,000 on a single return, $50,000 on a head-of-household return and $60,000 on a joint return won’t have to repay any credit overpayments that they get. Families with 2021 adjusted gross incomes of at least $80,000 on a single return, $100,000 on a head-of-household return and $120,000 on a joint return will need to repay the entire amount of any overpayment when they file their 2021 tax return next year. Families with 2021 adjusted gross incomes between these thresholds will need to repay a portion of the overpayment. Next Steps As you can see, the Child Tax credit may create some challenges when parents have an every-other-year arrangement to receive this credit or have had a significant change in income due to COVID or a recent divorce. We can help. The team at A.M. Financial can help you understand how the new requirements and opportunities available with the 2021 Child Tax Credit can help you save money in your divorce and/or plan the best arrangement for sharing this tax credit with your former spouse. Contact us today for a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "07/05/2023", "datePublished" : "07/05/2023", "headline" : "The Child Tax Credit in 2021", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/Hands-1024x682.jpg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/the-child-tax-credit-in-2021", "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 have recently filed for divorce, one of the first things that could happen is the establishment of temporary orders. These orders can set the tone for the overall divorce settlement and parenting time agreements and are especially important and necessary if one spouse is not working or has less financial power. In this post, we outline what you need to know about temporary orders, especially as they relate to finances. Temporary Orders Defined The purpose of temporary orders is to maintain the status quo of the marriage during the divorce process. The goal of temporary orders is to increase stability during a separation until permanent orders are established. This means that permanent orders can deviate from temporary orders that are outlined in a final divorce settlement. Because negotiations and settlement can take months, temporary orders outline rights, responsibilities, and expectations from both parties until the divorce is finalized. Is a Divorce in Your Future? Get Prepared with These Essential Tips. Most often, temporary orders will mirror the situation prior to the filing of the divorce, in an effort to maintain a similar standard of living. This is especially the case if there is a large imbalance of financial power, such as one spouse being the primary financial provider and the other spouse working to take care of the children. Other times, temporary orders can be entered to establish new rules between the parties. These orders may address financial fairness, parenting time agreements in the best interest of the child, financial issues that are off course (such as overspending by one party), and financial needs not being addressed. Temporary orders aren’t always filed or issued. Whether or not they are requested by your attorney depends upon how well the parties are working together during the divorce process to address the various needs of all family members. Financial situations that can be addressed via temporary orders include: Spousal Support Insurance (medical, auto, etc) Decision-making responsibilities Child support Parenting time The use, possession, or sale of marital assets (such as cars, homes, investments, other personal property) Spending and/or withdrawing funds from bank accounts Expenses and how they will be paid Attorney fees Impact on Finances Temporary orders will likely impact your finances and can make it psychologically easier to transition to permanent orders as financial standards and processes are beginning to form between you and your ex-spouse. Because you may pay or receive child or spousal support immediately through temporary orders, it is a good idea to speak with a professional regarding what those amounts may be depending on your situation. Temporary orders also mean that you may need to put off planned purchases (especially more expressive ones, like buying a new car) due to temporary orders, or complete them before filing for divorce. By working with an attorney alongside an experienced Certified Divorce Financial Analyst (CDFA), you can understand how temporary orders impact your overall financial goals. At A.M. Financial, we recommend starting the overall financial planning of your divorce early. When you engage professionals early in the divorce process, you are more likely to achieve the financial outcomes that align with your goals. We can help you understand what you might need to request in temporary orders based on your financial situation, and supplement the knowledge of your attorney throughout the divorce process. Contact us to schedule a free consultation and learn more about our services.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "13/04/2023", "datePublished" : "13/04/2023", "headline" : "How do temporary orders work and do they impact my finances?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-6DUH9G.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/how-do-temporary-orders-work-and-do-they-impact-my-finances", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "There are many ways to approach the divorce process. The options you have to get from deciding to get a divorce to finalizing your divorce and the ways you might even mix and match these methods throughout your journey can impact the rest of your life.  Perhaps you are feeling overwhelmed with where to start, confused that the division of finances might be more complex than you had anticipated, or find yourself unsure that the financial agreements in front of you will meet your future needs. No matter which method of divorce you choose, we can support your journey and help you understand the financial impact of your decisions.  Read on to learn more about four methods of divorce, how they impact your finances, and how we can support you alongside each of them. Do-It-Yourself or Kitchen Table Divorce You may choose to face the complex world of divorce on your own. Clients often choose this path because they feel the split is amicable and a do-it-yourself divorce can save them money without compromising their divorce goals. This approach to divorce does work best when couples are agreeable, can consider the best interests of the whole family, and are able to resolve conflict well. Good candidates for DIY divorce are those with little to no assets, parties with similar incomes so maintenance isn’t needed, and no minor children. In this type of divorce, spouses prepare and file on their own court paperwork, and each party is encouraged to have an attorney independently review final documents. While this approach is often the least expensive short-term, and the quickest way to move through a divorce, mistakes and misunderstandings regularly occur. Often, these DIY plans don’t address long-term needs, financial considerations, changing future circumstances and are usually more expensive to work through for one or both parties post-divorce. Not to mention, other forms of divorce give you access to a professional who can guide you based on experience and best practices, which can be invaluable. Mediator-Led Divorce Some couples choose to work with a trained mediator to assist them in achieving a settlement agreement. There are many benefits of mediation, including the cost savings of litigation, minimizing the psychological challenges of going to court, and reducing conflict. Like DIY divorces, mediator-led divorces can be faster and less expensive than other methods of divorce. Because there is more discussion in a private setting, mediation is a more private and discrete process, and often gives parties more control of the outcome. However, the quality and experience of your mediator as well as existing dynamics in your partnership may strongly influence the outcome of a mediator-led divorce. If your mediator is skilled, they will be able to serve as a neutral third party to help you reach agreements. However, if there is an imbalance of power where one party in the relationship is controlling or forceful with their opinions, those same situations can unfold in mediation, making it difficult to reach an agreement about specific situations. Other times, topics and decisions are overlooked or incomplete due to tension between parties, court-imposed timelines, and/or an inability to cover all topics in the time allotted. The good news is that you can work alongside A.M. Financial throughout the mediation process, which will empower other professionals to be more productive and move your case forward. It also increases the value of the services provided to you by allowing each professional to do what they do best while working together. Litigation Other individuals prefer to retain legal representation for protection and to understand their legal rights. This type of divorce is best suited for parties where there is hostility, disagreement, and a reluctance to compromise. In this method, each party is represented by an attorney and your attorney advocates for you and your desires around the divorce. Many times the attorneys can work together and with you individually to resolve all conflicts and come to an agreement. However, if anything is not resolved, it will go through a mediator prior to being decided by a judge in court if not settled beforehand, although this is rare. In addition, when attorneys are involved, court deadlines can keep the divorce process moving along if one partner is dragging their feet. Often a more expensive option, working with an attorney through the litigation and court process can set you up for long-term success and financial stability. This method of divorce is always recommended if there are safety concerns, abuse, or drug and alcohol addictions. Sometimes this form of divorce is more emotionally taxing because it can feel more out of your hands. Therefore, it’s important to choose an attorney and support system that are compassionate to the whole situation and aligned with your values and needs. Collaborative Divorce Collaborative divorce is a new and growing method of divorce where a team of professionals support the couple who wishes to work together out of court. This method of divorce is a great fit for parties who are open to full and honest disclosure, solution-oriented, forward-thinking, and committed to reaching a mutual agreement. The goal is to help achieve higher priorities, reducing the emotional and financial toll and thus providing a respectful foundation for moving forward. In this team approach, both parties are represented by attorneys who are collaboratively trained and mutually respect both perspectives. They work together toward a win/win for the whole family. Depending on the dynamics of the case, agreements are discussed, settled and drafted before any court documents are submitted which can alleviate pressure the couple may feel. The attorneys are supported by a broader team that can include coaches, mental health professionals, child specialists, attorneys, financial specialists, realtors, appraisers, and even mortgage professionals. For example, in a collaborative divorce, a neutral financial specialist is assigned to help individuals and the team understands the financial aspects of their agreements. Through the advice of counsel, clients can choose when other professionals are brought into the process and for what purpose. Trained mental health facilitators guide the process, address and resolve conflicts, and train the couple with communication skills to help with the case staying on track in a productive manner. This method can be less expensive yet more thorough than litigation because non-legal professionals tend to have lower fees and specialize within their field. The overall goal for the Collaborative professional team is to help support and promote an environment of healing and recovery for the whole family. The team at A.M. Financial can support any of these four methods of divorce and ensure you understand the short- and long-term financial impact of any discussions, proposals, or agreements. We can serve as your financial advocate during a DIY divorce, as a subject matter expert during a litigated divorce, as a financial neutral in a collaborative divorce, or anything in between. To learn more about our experience and to share more about where you are in the divorce process, give us a call or complete the form on our website to schedule a free consultation.", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "05/04/2023", "datePublished" : "05/04/2023", "headline" : "4 Methods of Divorce and How They Impact Your Finances", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/Advice-Sign-1024x808.jpg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/4-types-of-divorces-and-how-they-impact-your-finances", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "As part of evaluating your total marital estate, various types of stock might come into play. Two of the most confusing of those stocks include stock options and restricted stock, which need special evaluation in your divorce and asset division. In this post, we decode what these stock types mean and some common pitfalls to watch out for as you evaluate how to handle them in your divorce. What are Stock Options? Stock options are rights and agreements that allow an employee to buy a company stock at a predetermined price in the future. Stock options are often part of a total compensation package to employees of publicly traded companies. Stock options are considered “exercised” when you purchase shares of a stock at the set price defined in your option agreement or grant. Often you will “exercise” or buy stock when your “exercise price” is lower than market price – this provides an immediate gain. However, if the exercise price is higher than the market price the options are considered to be “under water” and essentially worthless because the shares could be purchased on the open market without a benefit of the stock options. Valuing stock options can be challenging because the future stock price is unknown and can fluctuate up or down. What is Restricted Stock? On the other hand, restricted stock is a form of equity compensation. Often called restricted stock units or RSUs, shares are granted to an employee but subject to a vesting schedule and other possible stipulations before the employee becomes an actual owner of the stock shares. Employees of publicly-traded or private companies may be awarded RSUs that vest at certain employment milestones (one year, three years, five years, etc) and any unvested funds are lost completely upon termination of employment. Avoiding Pitfalls There are a number of financial pitfalls to avoid while managing how to evaluate stock options and RSU’s throughout your divorce. Don’t Skip Discovery –If you haven’t been closely involved in your finances during your marriage, or aren’t sure if your spouse has stock options or RSUs, you may have to request a formal discovery of documents to learn if they exist. Often, stock options and RSUs aren’t on tax forms, W2s, or other documents until exercised or vested, so you can’t obtain information on these financial benefits through normal financial reviews. If you and your attorney request a discovery, you may be able to get access to this type of information through requests for information to HR or have an attorney send a letter to subpoena records detailing all benefits provided by your spouse’s employer. Don’t Ignore Because Complex- Avoid the pitfall of ignoring these assets because they are complex, confusing, or require additional discovery steps. This can be compounded by not defining a clear value for these stocks, especially if they are not yet fully vested or private stock. In these cases, stock options and RSUs might not be subject to division and it is best to discuss this with your attorney and financial planner. Don’t Forget About Tax Consequences- Lastly, don’t overlook the tax consequences of division, which can be complex with these types of investments. As mentioned above, when stock options or RSUs are vested or sold, they are usually taxed to the spouse who is employed by the company that awards them. Therefore, any proceeds provided to an ex-spouse in an asset division should be after-tax proceeds, and it is essential to determine what percentage after-tax proceeds will be. Stock Options: The tax consequences are different for ‘qualified stock options’ versus ‘non-qualified’. Non-qualified options can trigger taxes at higher ordinary income rates when the options are exercised and are subject to capital gains tax rates when sold. Qualified stock options can qualify for lower capital gains tax rates if the options have been held for 2 years after the grant date or one year after the options have been exercised, whichever is later. Restricted Stock Units (RSUs): RSUs are taxed as ordinary income at the time of vesting. Don’t Overlook Ownership Issues- There can also be ownership issues with these types of investments. For instance, usually ownership can not be transferred to the non-employee spouse post-divorce. This means one spouse would need to rely on the employed spouse for future information, to carry out liquidation instructions when provided, among other items that are required. This can be difficult to do if the relationship is strained. There is much more to uncover relative to stock options and RSUs and working with a financial professional alongside an attorney can ensure that you get a fair portion of these important assets without significant tax consequences. The discovery and subpoena process can take extra time, so it is best to start the process early to ensure you have the time you need to negotiate the best division of these assets based on your financial goals. Contact A.M Financial to schedule a consultation where we can learn more about the circumstances surrounding your divorce and support your needs on this topic and more.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "09/03/2023", "datePublished" : "09/03/2023", "headline" : "Decoding Divorce: Stock Options & Restricted Stock", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-sYGkB0.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/decoding-divorce-stock-options-restricted-stock", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "You manage many relationships in your life with the things and people most important to you. Some of those relationships might be difficult, especially with family members or ex partners. Others may be relationships filled with joy and fulfillment. However, it’s possible you’ve never considered the “relationship” you have with money. Since money is essential to all aspects of your life, creating a healthy relationship with it is critical to your well-being. There is no better time to examine your relationship with money than during a divorce. This challenging life event can also be a great catalyst for change, and facilitate the right environment to understand, improve, and reimage your financial goals. In this post, we explore how to build a healthy relationship with money. We’ll outline considerations and steps you can take to build awareness around and improve your relationship with money. Understand your relationship with money Before you can improve your relationship with money, it’s important to understand why and how you currently relate to money. Your approach to money has likely been influenced by factors such as your family, culture, religion, location, gender, social status, and education. As you reflect on these aspects of your past, notice which ones may be most prevalent in your views of spending, saving, and budgeting. As you examine the factors that have influenced your perspective around money, notice what emotions come up when you think or talk about money. Do you feel excitement, anxiety, uncertainty, fear, or other feelings? Examine how these reactions might be tied back to your major influences around money. For example, if you grew up in a single-parent household where money was tight and in a social setting where money was important, you might never feel like you have enough money and experience feelings of anxiety and scarcity when you think about money, no matter how well you manage your finances. Lastly, relationship attachment styles can provide interesting insights into money management philosophies. You might find some similarities between the way you approach any relationship in your life and the way you manage your money. The three major types of attachment in relationships are anxious, avoidant, and secure. If you have an anxious attachment style, you may find yourself more reluctant to engage in your finances and hesitant to do things like create and manage a budget. If you are more anxious about money (and relationships), you may be hypervigilant about your spending and savings and over-engage in budgeting activities. In secure relationships with money, you likely spend an appropriate amount of time focused on money management, are saving appropriately, and have accepted that finances will fluctuate moderately. Take care of your foundational needs Maslow’s hierarchy of needs is a great example of how to build your financial foundation. Just like this famous survival pyramid, you have to take care of and budget for your basic needs first before considering more complex spending and savings needs. For example, only after your prioirize your monthly mortgage, electric bill, cell phone payments, gas, insurance, and other necessary payments, can you consider how you might budget for an upcoming vacation. You can’t plan for higher-level needs and budget items that lead to higher-level happiness and fulfilment unless your basic needs are met. When you build your budget from your foundational needs, you have the opportunity to examine what brings you joy and fulfilment, which you can build into tier two of your budget. Spend time with your finances Just like good relationships are built on shared, quality time, it’s important to prioritize time with your finances to cultivate a healthier relationship with them. Start small with a few minutes a day in which you review your spending, categorize your spending, and understand key patterns in the way you save and spend money. Apps such as Mint and Google Sheets can help you organize your spending and your credit card company may even have these tools built into your spending summary. As you get more comfortable regularly reviewing your spending and identifying opportunities to improve, dedicate a longer stretch of time each weekend to your finances and spend time reviewing what is working and what needs improvement. These review periods are also a great time to check in with your emotions around money. When your spending is in alignment with your values, you’ll feel less anxious about money and more confident about your spending and saving patterns. Create healthy boundaries Like any relationship in life, you have to create boundaries to keep the dynamics of a relationship healthy. In the case of money, you must declare the boundaries you want to have with your money. This might look like setting limits to your spending and even defining consequences if you don’t adhere to these limits (such as cutting back your unnecessary spending in key areas). Similarly, you might reward yourself with a spa day or other memorable experience if you do manage to maintain healthy boundaries with money. Spend time reflecting on your current and desired boundaries regularly and adjust as your relationship with money evolves and progresses. In order to have a healthy relationship with money, you have to understand your origins and beliefs around money, focus on your financial foundation, spend time reviewing your day-to-day spending, and create boundaries to ensure your success. At A.M. Financial, we can assist you in this process by providing various services to support your financial journey. Learn more in a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "07/03/2023", "datePublished" : "07/03/2023", "headline" : "Building Your Relationship With Money", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-uhWlNr.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/building-your-relationship-with-money", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "If there wasn’t enough to sort through, employer pension plans can be a particularly confusing aspect of dividing your assets in a divorce. From decoding what pension plans truly are to understanding whether you need a valuation for one that you or your ex-spouse has, takes the expertise of a professional. In this post, we help answer your top questions about how to handle a pension plan in your divorce. What is a pension plan? A pension plan is a type of employee retirement benefit plan. More common nowadays in public sector jobs, a pension provides eligible employees with a promise to pay future income streams (monthly) upon retirement. A pension plan can be provided to employees as the sole employer retirement plan or in addition to other saving plans such as a 401k, 457 plan, etc where the employee can elect to contribute and to what amount. A pension is funded by employer contributions into a pool of money that is set aside to fund future payments to retired employees. Employees must meet eligibility requirements to qualify for future benefits which is determined by a formula based on the employee’s years of service and their compensation over time. Pension benefits are paid out at retirement and the money is available to employees after reaching a certain age such as 60, 62 or 65. Payments received are taxable unless a lump sum of the benefits are rolled into an IRA. Retirees will receive monthly payments for the rest of their life. Therefore, the value of what a retiree will receive over their lifetime is unknown, not to mention the value of what it is worth currently and in a divorce proceeding. How are pensions paid out? Pensions can be paid out in one of two ways. Retirees can choose either monthly payments over a lifetime or a lump sum at retirement. For monthly payments, amounts are modified based on whose lifetime the payments cover. Those options include retiree only, retiree and spouse, and other predefined payout options. Lump sums can be rolled directly into an IRA account where funds can be accessed based on IRA rules. This is common for tax, investment budgeting reasons. However, unlike more traditional retirement options, like 401Ks and IRAs, pension benefits are usually not accessible prior to retirement What is a Valuation and when is one necessary? Retirement accounts are often a complex part of asset division, and pensions fall into that category. Unlike a 401k account that has a stated current value, a pension that provides funds over a lifetime does not have an exact value as of today. This is because of the way pensions are paid out. For example, someone may die and only receive benefits for five years while another retiree may live longer and receive more payments. Therefore, it is difficult to determine the value of a pension when calculated for the purposes of divorce. It is essential to have a professional help with a pension valuation, which determines the separate value and marital value of the pension for proper division. Like other assets, if you or your spouse earned future pension benefits during your marriage, it is usually considered marital property. Benefits accrued before your marriage or after your divorce would be separate property. In order to complete a valuation and understand the current pension value pertaining to a divorce, a valuation expert will take various factors into consideration to determine the value of your pension, including: Valuation date or the date in which the plan is valued for divorce division Average lifetime expectancy (states have different statutory guidelines) Date of the marriage Date of hire Date of employment termination (if applicable) This information will help determine what percentage of the pension value is marital. Valuations are extremely important if assets will be ‘offset’ in your division, which is fairly common. For instance, you may want to stay in the marital home and therefore your ex-spouse may receive more of another asset, like a pension, to offset the value of your home. A valuation helps you value, compare, and accurately divide assets. If you are the non-employee spouse and expect to receive future benefits as an agreement in your divorce, it is crucial to work with a Certified Divorce Financial Analyst (CDFA) to understand and plan for other complexities regarding the timing of your pension payments. For example, you may not want to wait until your ex retires in order to withdraw funds from the pension. In another important scenario, you will want to make sure you can continue to receive pension payments in the event of your ex-spouse’s death, instead of those payments ceasing due to your ex spouse’s death (usually by executing a QDRO or DRO). Lastly, if you or your ex-spouse already receives pension benefit payments, a valuation is typically not needed. Also, if a pension is going to be split 50/50 between spouses, a valuation may not be necessary. Once valuation and division agreements are complete, you must file a qualified domestic relations order (QDRO) to receive the payment benefits from a pension. In order to successfully divide a pension, work with a CDFA who can help you understand your pension valuation and division options as part of dividing your overall assets. At A.M. Financial, we can complete pension valuations for your divorce case. Pensions contain a critical part of your future earnings and can often be a very large percentage of a couple’s total assets. It’s critical not to underestimate a pension’s value. In some cases, they can be worth as much as or more than your home. As you fully understand your pension plans, you can divide them in ways that help you meet your future financial goals. Contact us to learn more.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/03/2023", "datePublished" : "01/03/2023", "headline" : "Understanding Pension Plans in Your Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-Re0BoV.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/understanding-pension-plans-in-your-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Sorting through the details of your divorce can be overwhelming at a time when so much is changing in your life. It’s critical to work with experts who can help you sort through decisions ranging from health care options to whether you should rent or buy a home. When it comes to health insurance, we’ve put together a list of top questions many divorcees ask when sorting through how to manage coverage post-divorce. Always consult with a local specialist in your area for questions that might be unique to your situation Can I cancel my spouse’s health insurance on my group plan? You can only remove your spouse from your health insurance once your divorce is finalized. If you have a mutual agreement in place prior to that time, you may remove them in accordance with that mutual agreement. Can I stay on my spouse’s plan if we agree to those terms in our decree? In Colorado, and all other states across the country, an employer will no longer cover an employee’s ex spouse after the divorce agreement has been finalized. Some plans may allow for employees to keep spouses on their plans who are legally separated and not divorced. In these incidences, check with your HR or benefits department. What are my health insurance options after divorce? Most individuals have three main healthcare options post-divorce: 1. A group policy through employment benefits is usually the best option because cost and premiums are typically shared with an employer. Therefore, they are substantially less expensive. Self-employed individuals can qualify for a group policy even if they have no employees. 2. The open marketplace can sometimes provide competitive options. In Colorado, you can review those options at Connect for Health. 3. COBRA includes a limited continuation of current coverage through the previous spouse’s health plan. This is typically the most expensive option. How much will insurance cost on the open marketplace? The cost depends on your income, family size, plan type, and the coverage options. You can explore plans here. Your options also depend on your health insurance risk tolerance. You may decide to risk more with a higher deductible plan if you are healthy, or have more cash available to you in case of a healthcare emergency. You may want to play it safe and choose a lower deductible plan if you anticipate a lot of healthcare expenses this year. The cost depends on your income, family size, plan type, and the coverage options. You can explore plans here. Your options also depend on your health insurance risk tolerance. You may decide to risk more with a higher deductible plan if you are healthy, or have more cash available to you in case of a healthcare emergency. You may want to play it safe and choose a lower deductible plan if you anticipate a lot of healthcare expenses this year. How much does COBRA cost? COBRA tends to be the most expensive insurance option but it also guarantees the continuation of care with current providers and healthcare benefits. Usually, the recipient of COBRA pays the entire premium amount, which is the total of the employer’s and employee’s share. How long does COBRA last? COBRA can last up to 36 months (3 years) when it’s available due to divorce When should I sign up for COBRA? You have 60 days to enroll in COBRA from the time the plan administrator notifies you of the COBRA coverage availability. When can I get a new health insurance plan? If you are obtaining a new plan through your employer, you are eligible for a new group plan based on your company’s policy. Because divorce is considered a qualifying life event, such conditions allow you to change insurance mid-year or outside a designated enrollment period. If you are choosing the open marketplace, you have 60 days to enroll once your divorce is finalized. If you fail to act during that window, you must wait until the traditional open enrollment period, which is November 1st through January 15th each year. Health insurance questions are one of the many categories of questions you’ll have as you make changes in your life post-divorce. Working the cost of insurance into your budget is critical to success post-divorce. This expense should be considered while working through divorce negotiations because it can represent a substantial need. Lean on a team of experts to help you make important healthcare insurance decisions, or take advantage of free resources related to health insurance, which can set you up for success. Discuss possible tax breaks with these advisors, which might be available based on the type of play you chose.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "15/02/2023", "datePublished" : "15/02/2023", "headline" : "Colorado Health Insurance and Your Divorce: Your Top 8 Questions, Answered", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-xUH0O4.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/colorado-health-insurance-and-your-divorce-your-top-8-questions-answered", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Over the last decade, you’ve likely heard more about the importance of self-care or ways you can proactively take care of yourself to reduce stress and burnout. Because finances and money can be a top source of stress for so many people, there is an opportunity to view and manage financial stress with self-care, like you address other stressors in your life. In this post, we’ll dive into steps you can take to create and sustain financial self care in your life. Complete an inventory Getting a grasp on your finances begins with identifying what is working well and what areas need attention. This practice can help you recognize areas of strength and resources as well as vulnerabilities that should be addressed through budgeting and planning. To complete an inventory, write down all the aspects of finances in your life, including regular spending, savings goals, financial priorities, outstanding debts, and more. Getting an honest, truthful, and objective perspective by working with a financial professional can also reduce your financial stress. Create a budget If you don’t control your money, it will control you. Giving your money boundaries strengthens your relationship with money and will help you make financial decisions that are aligned with your values. Spend time analyzing the emotional or physical value you receive for each budget item and if it should be adjusted. When you consider the “value” of something, align it with its importance, worth, or usefulness in your life. Also, ask yourself how your values may have changed post-divorce and make sure you aren’t automatically assigning a value that was expected in your marriage. As you reflect on your values, you may find that you are pouring too many resources into an area that isn’t providing the appropriate level of fulfillment in return for what is given. For example, your mortgage payment is likely your highest expense and perhaps you don’t get all that much joy and satisfaction out of a home that provides far more space than you need. Maybe cleaning the large space produces additional stress that you don’t welcome in your life. It might be time to consider downsizing or even renting out some of your home on short-term sites like Airbnb. In other examples, maybe you’re eating out too much, spending too much on gifts, or paying for cable television that you know longer use. Next, use your inventory, which details both your resources and needs, to move items around in your budget so that it aligns with your financial vision and plans. For example, if you have family or friends who are willing to help watch your kids, you may be able to work more hours or engage in a side hustle. Lastly, create a cushion in your budget. Think of your financial cushion as your best friend. The best friend that always has your back in tough times. Life is nearly impossible without those relationships that help hold you up during storms. Recognize that emergencies happen, and you may even want to splurge on a trip or an item. At any time, a family member might need financial help. Reduce stress about money by creating this financial buffer and fostering this critical financial component into your life. Give yourself the gift of space, grace, and compassion around money, just like you give yourself this emotionally. Include self love Alongside taking responsibility for your financial success, plan enjoyable and fulfilling experiences or purchases that bring you joy and align with your values. Most individuals find more fulfillment in experiences post-divorce and this is a great time to invest in new hobbies and interests, which will also support your post-divorce healing. Maybe you have wanted to start skiing again or learn to knit. Perhaps joining a travel group will make it easier for you to continue traveling post-divorce. Prioritize activities such as going out with friends, shopping (thrift stores work great if you are on a tight budget), reading books, attending a college sports game, getting your nails done, or doing your nails together with a friend. Don’t neglect planning for your future While it is important to be a present-moment warrior, balance is crucial and necessary. One day, retirement will be your present moment. Budget and plan for the retirement life you want. Detail this vision in your inventory and use your budget to make your ideal retirement possible by investing now for tomorrow. Work closely with a financial professional to ensure you are saving and investing appropriately while getting any tax benefits available to you through detailed retirement planning. If you haven’t planned your financial life in advance, or don’t fully understand the resources available to you, you can lose sight of what’s possible. It is easy to get overwhelmed with life and try to remedy your feelings in the moment by buying things you don’t need instead of sticking to initial, thoughtful budgets and plans. This can be especially dangerous during a big transition such as a divorce where it’s common to purchase things emotionally or even get stuck in bad spending patterns. Whether you are just starting the process of building regular financial self-care into your life, or have been building these practices for years following a divorce, recognize the importance of these financial commitments to yourself. Contact us to learn more about our financial planning services or attend one of our free upcoming events.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "02/02/2023", "datePublished" : "02/02/2023", "headline" : "Financial Self-Care: Prioritizing Your Financial Needs", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-aAL1RB.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/financial-self-care", "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 recently divorced, you may be experiencing a lot of ‘firsts’. For example, you may have to do your own taxes for the first time and feel like a deer in headlights, frozen and overwhelmed by the facts and figures you are sorting through. Or, maybe you have to set up a budget for the first time and try and determine where your money should go, how much money you should keep in savings, how you should invest in the market, and more. Managing, monitoring, and learning about investments likely feels like a full-time job⁠—and one you aren’t getting paid for. In this post, we help you sort through one aspect of your divorce related to your investments and how you might be able to reduce your capital gains tax by considering some different investment strategies. Please note that this post does not serve as tax or investment advice and you should always consult with your team of professionals for individual guidance based on your unique situation. What to consider The most suitable investment management strategies take all of an individual’s financial considerations into account, including taxes. There is no question that post-divorce financial life is drastically different and you might not have a grasp on the most effective ways to invest or file your taxes. Working with a professional, especially if you have experienced a lot of change, will save you time, money, and headaches. It is overwhelming enough to address the issues previously mentioned and therefore quite easy to overlook that you may be paying substantially more in capital gains tax than you could be. Some post-divorce individuals may qualify for 0% capital gains tax when instead many people may be unknowingly paying 15% on their gains instead because they aren’t working with a financial professional who can provide guidance on money-saving strategies like this and more. The following individuals are more likely to qualify to take advantage of 0% capital gains rates on their investments: Post Divorce individuals with annual employment wages between $0-$60,000. Some of these individuals might also be receiving tax-free maintenance on top of their own personal wages. For divorces that were finalized before or in 2018, maintenance is usually taxable income (unless otherwise specified in their agreement) in which case their employment income and taxable maintenance would need to fall into this range. All divorces finalized after 2018 have tax-free maintenance and the payor does not receive a deduction. Individuals who received taxable investments from divorce asset division or maintenance lump sum payout. This type of payout creates ongoing taxable gains, especially if it is invested. If it isn’t invested, you might be missing out on key opportunities to grow your wealth and meet future life goals. Individuals who are not working with an experienced financial advisor who specializes in divorce circumstances. Many individuals qualify for 0% capital gains taxes but don’t know this is the case because they feel confident enough in their ability to manage their finances on their own and want to try and save on expenses or they are working with professionals that do not incorporate tax planning into their investment strategies and probably don’t know the client’s overall situation that well. Let’s break it down We know taxes and investments are a confusing topic, especially if you weren’t managing your finances in your previous marriage. Let’s look at an example to illustrate what kinds of savings are possible. With a little tax and investment planning, you may be able to qualify for the 0% capital gains tax rate that is available to taxpayers in the 10%-12% marginal tax brackets. Mary works as an executive assistant with an annual salary of $50,000. After her divorce, she begins to receive $4,000 per month in tax-free spousal support. Among the assets divided in her divorce, she was awarded a $300,000 investment account that holds stocks, bonds, and mutual funds. Those investments are managed by the same advisor who worked with her ex-spouse when they were married and she didn’t have much communication with this professional. The account is well balanced, has been growing steadily, and produces $9,000 (3%) in annual income. This additional income generated from the qualified dividends and long-term capital gains has pushed Mary into the 22% tax bracket from the 12% bracket that her salary aligns with. Therefore, Mary is paying $1,350 in taxes associated with these gains because she has been bumped into a higher tax bracket. What if there was a way to pay $0 in taxes and still have the account grow? Is it possible for you to pay 15% less in taxes on your investments? There are numerous ways to invest which all have various tax implications. Do you know which one is the best for you? Ask Yourself These Four Questions Now that you have a better idea of how your investment strategies can affect your taxes, the following questions can help you determine what to do next. If you answer ‘no’ or “unsure” to any of these questions, you should talk to your financial professional: What marginal income tax bracket are you in? How much are your investments producing in taxable income? Is your investment income pushing you into a higher tax bracket and therefore substantially increasing the taxes you owe? If you answered “no” or “unsure” to any of these questions, you should consult with your financial professional. It can be overwhelming to manage all your finances and understand all the changes you have experienced post-divorce. Your financial professional can help you understand your short-term financial choices and help you achieve your long-term goals.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "02/02/2023", "datePublished" : "02/02/2023", "headline" : "Playing Your Cards Right: Divorcees Who Pay 0% Capital Gains Tax", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-jw2Wfn.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/capital-gains-tax-mahlen-financial", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ```