--- title: Our Blog - AMF Divorce | Planning (2) description: Planning | From mortgage professionals to therapists to attorneys, the team at A.M. Financial works closely with these types of professionals. (2) --- ## 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 # Planning (2) ## [8 Things To Do if You Are Waiting for the New Year to Divorce](https://amf-divorce.com/our-blog/8-things-to-do-if-you-are-waiting-for-the-new-year-to-divorce) December 01, 2023 Starting a new chapter in life, especially when it involves a significant change like divorce, involves both [emotional and logistical considerations](https://amf-divorce.com/our-blog/managing-the-money-crazies-in-divorce-navigating-emotional-turbulence). If you find yourself waiting for the new year to... [CONTINUE READING](https://amf-divorce.com/our-blog/8-things-to-do-if-you-are-waiting-for-the-new-year-to-divorce) ## [Managing the 'Money Crazies' in Divorce: Navigating Emotional Turbulence](https://amf-divorce.com/our-blog/managing-the-money-crazies-in-divorce-navigating-emotional-turbulence) November 10, 2023 Going through a divorce can be emotionally and financially challenging. As you navigate the complexity of ending a marriage, you may notice the emotional rollercoaster that accompanies the process.... [CONTINUE READING](https://amf-divorce.com/our-blog/managing-the-money-crazies-in-divorce-navigating-emotional-turbulence) ## [Embracing the Benefits of Working After Divorce](https://amf-divorce.com/our-blog/embracing-the-benefits-of-working-after-divorce) November 02, 2023 Divorce can be a life-altering experience, especially for women who may find themselves contemplating working after retirement age or after a period of being a [stay-at-home mom](https://amf-divorce.com/our-blog/stay-at-home-moms-learning-to-budget-post-divorce). This [transition](https://amf-divorce.com/our-blog/reentering-the-workforce-mahlen-financial) can... [CONTINUE READING](https://amf-divorce.com/our-blog/embracing-the-benefits-of-working-after-divorce) ## [College Planning Concepts: 3 Things to Be Aware of When Divorcing](https://amf-divorce.com/our-blog/college-planning-concepts-3-things-to-be-aware-of-when-divorcing) October 19, 2023 Divorce is a life-altering event that affects not only your family dynamics but also your financial plans, especially when it comes to your child's education. Navigating the complexities of college... [CONTINUE READING](https://amf-divorce.com/our-blog/college-planning-concepts-3-things-to-be-aware-of-when-divorcing) ## [Four Sources to Consider When Restructuring Your Income Post-Divorce](https://amf-divorce.com/our-blog/four-sources-to-consider-when-restructuring-your-income-post-divorce) September 06, 2023 If you are a non-working spouse going through a divorce, it’s important to fully understand your sources of income and determine whether you need to return to work to supplement your maintenance... [CONTINUE READING](https://amf-divorce.com/our-blog/four-sources-to-consider-when-restructuring-your-income-post-divorce) ## [What is a Loan Assumption?](https://amf-divorce.com/our-blog/what-is-a-loan-assumption) August 01, 2023 Deciding the fate of [marital property](https://amf-divorce.com/our-blog/separate-vs-marital-property) is a crucial aspect of any divorce settlement. The process often involves intense emotions and complex financial considerations, making it all the more... [CONTINUE READING](https://amf-divorce.com/our-blog/what-is-a-loan-assumption) ## [Post-Divorce Budget Planning](https://amf-divorce.com/our-blog/post-divorce-budget-planning-dont-overlook-these-8-items) June 01, 2023 While it is always important to build a budget, it’s essential when you go through a significant financial change like one that follows a divorce. Budgets should include everything from necessary,... [CONTINUE READING](https://amf-divorce.com/our-blog/post-divorce-budget-planning-dont-overlook-these-8-items) ## [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) ## [Summer Travel for the Newly Divorced](https://amf-divorce.com/our-blog/summer-travel-for-the-newly-divorced) May 04, 2023 If you are [newly divorced](https://mahlenfinancial.com/new-year-and-newly-divorce-dont-put-off-next-steps/), you’ve probably noticed that many aspects of life no longer look the same. From holidays, to gatherings with friends, to vacations, your post-divorce experiences are... [CONTINUE READING](https://amf-divorce.com/our-blog/summer-travel-for-the-newly-divorced) ## [What is a Qualified Domestic Relations Order (QDRO)?](https://amf-divorce.com/our-blog/what-is-a-qualified-domestic-relations-order-qdro) May 01, 2023 Divorce will introduce you to a whole new set of legal and financial terminology, as well as acronyms. Understanding the processes, steps, and orders are essential to having a successful financial... [CONTINUE READING](https://amf-divorce.com/our-blog/what-is-a-qualified-domestic-relations-order-qdro) - - [1](https://amf-divorce.com/our-blog/tag/planning) - [2](https://amf-divorce.com/our-blog/tag/planning/page/2) - [3](https://amf-divorce.com/our-blog/tag/planning/page/3) - [4](https://amf-divorce.com/our-blog/tag/planning/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" : "Starting a new chapter in life, especially when it involves a significant change like divorce, involves both emotional and logistical considerations. If you find yourself waiting for the new year to officially initiate your divorce, this period of anticipation can be both daunting and empowering. While you're preparing for this significant life change, there are several proactive steps you can take to navigate the waiting period. In this blog post, we’ll discuss eight things you can do to be both prepared for the logistics of what’s to come and more resilient to the emotional roller coaster that often accompanies divorce. 1. Start Gathering Financial Information As the year draws to a close and conversations about finances become more commonplace due to the holiday season, take advantage of this time to collect essential financial information. Engage in open discussions with your spouse about assets, debts, income, and expenses. Keep track of any year-end bonuses and gather documents that might only come annually. 2. Begin Thinking About Taxes You likely receive important tax information toward the end of the year. Keep an eye out for these necessary tax documents that you may need once you file for divorce. If you are working, consider consulting a financial professional to learn whether you should adjust payroll withholdings in the new year due to the circumstances surrounding your impending divorce. For example, you may have previously withheld more money because you liked having a large refund at tax time. Under your new circumstances, you may need this extra money throughout the year to pay for costs related to your divorce or new living situation. 3. Conduct a Security Screen Prioritize the security of your personal information by changing passwords to individual accounts, email, and social media. Consider creating a new email account specifically designated for divorce-related communication to ensure your privacy during this time. 4. Open Individual Bank and Credit Accounts Prepare for financial autonomy by setting up individual bank and credit accounts. Not only is this an empowering step in your divorce journey, having your own accounts can also aid in managing holiday expenses and serve as a financial buffer for potential divorce-related costs in the future. Establishing these accounts early also takes one thing off your post-divorce to-do list and allows you to securely start collecting maintenance or child support payments as soon as agreements are made. 5. Make a List of Divorce Professionals to Interview Couples who engage with divorce professionals often report higher satisfaction with the outcomes of their decree. Research and compile a list of attorneys, divorce coaches, and financial professionals that will support the outcomes you desire. Seek referrals from trusted sources or, if you are comfortable, gather information during social gatherings. Read reviews on sites ranging from Google to Facebook, and begin to screen professionals by reading their website and blog. 6. File if Needed When a relationship is strained, the holiday season can exacerbate the pressure, and become a burden to both you and your family. If your safety or well-being is at risk due to abuse or domestic violence, prioritize your protection by filing for divorce before the holidays pass. Your safety should always be a top priority. 7. Engage in Making Memories Alongside both holiday and divorce preparations, take time for yourself and your loved ones. Engage in activities that bring joy and create positive memories. Start new traditions based on what authentically brings you happiness during this time of year. Seek out the company of friends or simply treat yourself to gifts and experiences that support your emotional well-being. Confide in trusted friends, family, or professionals to navigate the emotional challenges that come with preparing for divorce. 8. Prioritize Self-Care Finally, amidst the whirlwind of preparations and emotions, don’t forget to prioritize self-care. Notice when you feel calm and healthy in your life and choose more activities that support those emotions. Don’t be afraid to say “no” to certain gatherings that might not feel appropriate with your divorce on the horizon. Prioritize self-care instead of saying “yes” to all the holiday party invitations to ensure that you start the new year feeling energised and grounded, rather than overcommitted or burned out. Divorce, as with any major life change, requires thoughtful planning and emotional resilience. By taking these proactive steps while waiting for the new year to initiate the divorce process, you are setting a solid foundation for the journey ahead. To prepare for the financial aspects of your divorce, contact Amy Melander, , who works with couples and individuals facing challenging financial decisions during the divorce process. Amy works to understand your unique priorities, and builds your financial roadmap, helping you make informed decisions for your future. Schedule your free consultation today.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/12/2023", "datePublished" : "01/12/2023", "headline" : "8 Things To Do if You Are Waiting for the New Year to Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://39875594.fs1.hubspotusercontent-na1.net/hubfs/39875594/Imported_Blog_Media/qtq80-UUhAvS-1536x1024.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/8-things-to-do-if-you-are-waiting-for-the-new-year-to-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Going through a divorce can be emotionally and financially challenging. As you navigate the complexity of ending a marriage, you may notice the emotional rollercoaster that accompanies the process. Emotional reactions can sabotage your financial decisions, leading to choices that may not serve your best interests in the long run. In this blog post, we'll explore six considerations to keep in mind that can help you manage the 'money crazies' during your divorce. Cultivating awareness of your emotional reactions during this time can help you make informed, rational decisions that safeguard your financial future. Self-Awareness is Key Emotions can run high during a divorce, and it's not uncommon to experience feelings of resentment, anger, and impatience. These emotions can lead to abrupt decisions, often driven by a desire for revenge or simply wanting the process to be over with. It’s important to be self-aware and recognize when these emotions cloud your judgement. When you can step out of your emotional reactions, you can prevent decisions made in the heat of the moment that may not be in your long-term financial interest. Seek Support from a Divorce Coach Managing your emotions during a divorce can be incredibly challenging and addressing your emotional needs is key to a fulfilling future post-divorce. While expecting the judicial system to address your emotional needs is unrealistic, a divorce coach can be an invaluable resource, providing emotional guidance and helping you make rational decisions during this tumultuous time. They can help you process feelings of frustration, anger, confusion, and sadness, ensuring that your emotions don't steer you off course financially or emotionally. Don't Let the Process Overwhelm You A divorce is a process that takes time for a reason. Avoid letting it consume your life entirely. Set specific times to focus on your divorce proceedings, and do your best not to let it overwhelm you. Prioritize self-care by reducing stress, spending time with friends and family, engaging in activities you enjoy, exploring new hobbies, and getting adequate sleep. Maintain your overall well-being by working on your emotional health. By identifying opportunities for self-care and committing to healthy habits, you'll be better equipped to handle both the complexities of the divorce and the changes you’ll experience post-divorce. Handle Sensitive Areas with Care Recognize that both you and your spouse may have sensitive areas that need to be addressed during the divorce. Avoid neglecting these issues and consider seeking professional support when necessary. Family therapists, mediators, professionals, or lawyers can help facilitate productive conversations, ensuring that these sensitive topics are addressed without causing further emotional turmoil. Stand Firm Against Threats During a divorce, it's not uncommon for threats or intimidation tactics to be used. Remember that you are in control of your life and your future, as well as your reactions. Your spouse no longer gets to make decisions for you, such as when you’ll move out and where you will live. You are fully in charge of your future and key decisions such as going back to work, how you’ll raise your children, and how you’ll spend money. If you feel as if your former spouse is trying to control you, seek advice from professionals, consult with supportive friends and family, and build a clear plan for your future. Do not let your spouse's threats or desire to control you dictate your actions. Avoid Making Too Many Changes at Once A divorce is already a significant life change. Adding more stressors, such as starting a new job, moving far from your support network, or embarking on a drastic diet, can be overwhelming. Take your time to reflect, heal, and rebuild your life with intention. Implement changes gradually, so you can adapt at your own pace without adding unnecessary stress to an already challenging situation. Divorce is never easy, and managing your emotions during this time is crucial to making sound financial decisions. By being self-aware, seeking support from professionals, and taking steps to protect your emotional well-being, you can navigate the divorce process with greater resilience and ensure that your financial future remains secure. You have the power to shape your own destiny, and with the right support, you can emerge from divorce stronger and ready to embrace a new chapter in your life. At A.M. Financial, we support important aspects of your divorce by working with you to model new budgets, make decisions around maintenance, and wrap up other financial aspects of your settlement. Contact us for a free consultation to learn more about our services.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "10/11/2023", "datePublished" : "10/11/2023", "headline" : "Managing the 'Money Crazies' in Divorce: Navigating Emotional Turbulence", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://39875594.fs1.hubspotusercontent-na1.net/hubfs/39875594/Imported_Blog_Media/qtq80-UUhAvS-1536x1024.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/managing-the-money-crazies-in-divorce-navigating-emotional-turbulence", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Divorce can be a life-altering experience, especially for women who may find themselves contemplating working after retirement age or after a period of being a stay-at-home mom. This transition can be intimidating because you may be entering the empty nest stage and facing the task of redefining your identity, or juggling the new demands of single parenting alongside a new career. However, it's essential to recognize that there are numerous upsides to working post-divorce, ranging from financial and healthcare benefits to social enrichment, personal empowerment, and fulfillment. In this article, we'll explore the positive aspects of working after divorce. Social Connections and Personal Fulfillment One of the most significant benefits of working after divorce is the opportunity to expand your social circle and find a new sense of purpose. Many women, especially those who have been stay-at-home moms, may experience a sense of isolation during and after divorce. Returning to the workforce can provide a platform for building new friendships, reviving old ones, and strengthening your social network. This social enrichment can lead to improved mental and emotional well-being, and help you feel a new sense of identity following a big life change. Learning Opportunities and Career Growth Working after retirement age can offer valuable opportunities for continued learning and personal growth. Whether you're acquiring new skills, adapting to modern technologies, or embracing new challenges, your work can keep your mind active and engaged. This ongoing education not only benefits your career but also enhances your cognitive abilities and keeps you mentally sharp. These qualities can lead to a sense of empowerment and affirm that you have the potential to take care of yourself, no matter what happens in your life. Financial Upsides Earning a post-retirement income can have a positive impact on your financial well-being. Not only does it provide additional financial security, but it can also extend your investments and assets. Earning a regular salary, in addition to any child support or maintenance payments, increases the likelihood of not running out of money during your retirement years. In addition, working may increase your Social Security income, either by raising your initial benefit due to a higher income compared to historical earnings or by deferring benefits, which can increase your initial benefit by 8% per year up to the age of 70. Healthcare Benefits Maintaining access to quality healthcare is crucial, especially as you age or take on the responsibility of healthcare for your children. Continuing to work can provide you with employer-sponsored health insurance or the financial means to purchase reliable coverage. Regular access to healthcare can help you stay on top of preventative care and medical needs, reducing your overall medical expenses in the long-run. Volunteer Experience Many stay-at-home moms or near-retirement women have extensive experience volunteering in schools or other communities. These valuable skills and experiences should be highlighted on resumes as they have helped you cultivate valuable skills that are important to businesses, such as project management, organization, and leading with influence. Working after divorce helps you recognize what a tremendous asset you are for employers who value your dedication and community involvement. It can be rewarding and empowering to see your volunteer efforts translate into paid employment. Working after divorce may seem daunting, but it's essential to remember the numerous advantages of this choice. While the financial benefits are evident, working post-divorce also enriches your social life, helps you continue to grow as an individual, and supports a renewed sense of purpose. By embracing the opportunities that come with working after divorce, you can craft a fulfilling and financially secure future, reclaim your identity, and embark on a new chapter of your life with confidence and optimism. To learn how we support the financial aspects of your divorce and post-divorce planning, schedule a free consultation with Amy Melander, CFP®, CDFA®, and independent wealth manager.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "02/11/2023", "datePublished" : "02/11/2023", "headline" : "Embracing the Benefits of Working After Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://39875594.fs1.hubspotusercontent-na1.net/hubfs/39875594/Imported_Blog_Media/qtq80-aAL1RB.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/embracing-the-benefits-of-working-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" : "Divorce is a life-altering event that affects not only your family dynamics but also your financial plans, especially when it comes to your child's education. Navigating the complexities of college planning during and after divorce can be challenging, and by educating yourself on the dynamics, you can still make a meaningful contribution to your child’s college education. In this article, we discuss three considerations to navigate college planning during and after your divorce. 1. Managing 529 Plans State-sponsored 529 plans are a popular option to save for a child's education. While the account balance is considered a child's asset and typically not subject to division in the marital estate, several important questions and considerations may arise during divorce, including: Account Management: Who will manage the 529 accounts after the divorce? Will it be one spouse or a joint effort? Decision Making: Who has the authority to decide when and how the funds will be used? Is it one spouse's sole decision, or will it require joint agreement? Unused Funds: What happens to the 529 plan funds if they are not fully utilized by the child? Can they be transferred to another sibling, or will they be withdrawn, possibly incurring penalties? In most cases, both you and your ex-spouse will want to continue making contributions to a 529 and benefit from state income tax deductions (where applicable). Therefore, you will need separate accounts, each listing the child as a beneficiary. 2. Considering Financial Aid Implications If your child intends to apply for financial aid, it’s important to understand the implications of divorce on the Free Application for Federal Student Aid (FAFSA) and the College Scholarship Service (CCS) profile. While both the FAFSA and CSS Profile require financial information from parents, the FAFSA considers only the parent with the majority of overnights, while the CSS Profile evaluates need based on financial information from both parents. This is significant if there is a large income discrepancy between the parents because the less-financially-advantaged parent would typically qualify for a more compelling financial aid package. If you are concerned that your ex-spouse may be reluctant to provide financial information in the future, consider including agreements in your parenting plan stating that both parents will cooperate to the best of their abilities. Additionally, you’ll be required to provide financial information for the two years prior to the academic year you're applying for. For example, if you are applying for the Fall 2024 or Spring 2025 school year, you'd report financial details from 2022 onward. In the case of a new divorce, if you were married in the base year (2022, in this example) but are now divorced, you’ll need to disclose this change in circumstances in your financial aid applications. Laws regarding divorced parents' obligations for their child's college education vary by state. In some states, like Colorado, including college contributions in your divorce agreements makes them legally binding. In other states, there may be legal requirements for parents to financially support their child's college education. 3. Being Aware of Timelines When applying for financial aid through the FAFSA and CSS Profile, it's essential to be aware of specific timelines and information requirements, which are earlier than you might expect. The FAFSA and CSS Profile open for applications on October 1st for the following academic year. For instance, you would apply in October 2023 if your child plans to start school in the Fall of 2024 or Spring of 2025. Navigating college planning during and after divorce requires careful consideration of these factors. Consider seeking legal and financial guidance to ensure you make the right decisions as they pertain to saving strategies, to benefit both you and your child's educational future. Rules and regulations do vary by state, so consult with professionals who are knowledgeable about the specific laws in your area to create a plan that suits your family's needs post-divorce. To learn more about how we can support these important decisions during your divorce, contact us for a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "19/10/2023", "datePublished" : "19/10/2023", "headline" : "College Planning Concepts: 3 Things to Be Aware of When Divorcing", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://39875594.fs1.hubspotusercontent-na1.net/hubfs/39875594/amfinancial-blog-hero.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/college-planning-concepts-3-things-to-be-aware-of-when-divorcing", "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 a non-working spouse going through a divorce, it’s important to fully understand your sources of income and determine whether you need to return to work to supplement your maintenance payments and other income-generating assets. Even if your former spouse made a good living, the combination of a high cost of living in Colorado and your preferred lifestyle might mean it may be in your best interest to return to full-time employment and/or enroll in career training to become employable. In this post, we’ll outline the top four sources of post-divorce income to consider as you evaluate and restructure your finances during the divorce process, and what these income streams mean for future financial needs. 1. Income from Child Support If children are part of your divorce, you’ll likely be awarded child support until your children reach the age of 19 in Colorado. This payment is based on the number of overnights you have with your children, each parents’ income (including maintenance, if any), the age of the children, childcare needs, healthcare needs, and other potential costs. This child support payment can fluctuate if there are changes in the child’s living situation or income changes for the parents. Logistically, this income should be used to provide the same standard of living to the child as the other spouse, and because this income stream is temporary, it’s best to rely very little or at all on this contributing income for your lifestyle. Therefore, doing your best to a build a budget that does not require this income to pay your bills, qualify for loans, and pay for your own lifestyle choices is the most financially prudent direction from a long-term perspective because at some point this income will stop. 2. Income from Maintenance Finalized as part of your divorce settlement, Maintenance income is the result of income disparity between spouses. Maintenance, sometimes called rehabilitation support, can be structured several ways. The goal of Maintenance is to provide support for the lower-earning spouse to re-enter the workforce so that they can eventually provide for themselves financially, ideally by the time the maintenance payments end, or retire. In Colorado, the duration of Maintenance is usually based on the length of the marriage whereas the amount of Maintenance is based on each party’s annual income. Therefore, like child support, this income stream could change but at some point in the future, will end. The duration of Maintenance, along with your age, plays a large role in how this payment will impact your future. For example, if you receive Maintenance until you are eligible for retirement benefits, you may not need to return to the workforce. On the other hand, if you are 45 years old with a maintenance award of 10 years, you should work on your career and ways to supplement your maintenance income unless you have adequate assets to live off of for the rest of your life, essentially retiring early. Adequate retirement planning, no matter your age, could provide insight on whether you need to re-enter the workforce and at what level. 3. Income from Earnings If you do decide to work on your career and re-enter the workforce, you’ll undoubtedly have more power and control over your income. This stream of income can last forever and has ancillary benefits, such as retirement savings, healthcare, and other professional financial perks. Skills you acquire through going back into the workforce and the associated income you’ll earn with those skills can’t be taken away from you. Even if you get laid off, you’ll likely receive some sort of severance along with maintaining the skills you need to be employable elsewhere. Therefore, your earnings are an extremely valuable and empowering asset for a stable financial future. If you are raising kids, balancing a great number of priorities, and not accustomed to also working on top of these responsibilities, it can feel overwhelming to imagine full-time employment. If you are considering career training, evaluate the types of jobs that might fit your lifestyle. For example, while your children are young, consider careers that more commonly provide work-from-home options to help you balance your existing responsibilities. Since COVID, there are many more employers who offer work-at-home opportunities. Your earnings are the most flexible and abundant source of income and can be the most dependable asset in your financial future. 4. Income from Other Assets It’s possible that you’ll divide assets in your divorce that provide monthly income. These assets might include investment dividends and interest, rental property income, passive business income, and more. Depending on how these assets are managed and structured, they could provide steady income for a long period of time or disappear completely. It’s important to work with your financial advisor to evaluate the level of risk and reward you might encounter with these less common forms of income to make sure they last for as long as possible or are used in an appropriate manner that reflects your goals and priorities. If you don’t earn as much as your former spouse, consider conserving these assets or taking steps to reduce your risk. For example, rental property income can be fruitful until you can’t find consistent renters or need to make significant improvements to the rental home, which you may not have the funds to address. Similarly, these types of assets can lose substantial value and you may want to liquidate or withdraw the assets for specific purposes. Your financial advisor can help you retain and stretch the assets for as long as possible. At A.M. Financial, we provide support to individuals going through a divorce by designing budgets that align with financial goals, discussing asset division strategy, and modelling retirement plans. We offer a free consultation to learn more about your unique situation. Contact us to schedule yours today.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "06/09/2023", "datePublished" : "06/09/2023", "headline" : "Four Sources to Consider When Restructuring Your Income Post-Divorce", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://39875594.fs1.hubspotusercontent-na1.net/hubfs/39875594/Imported_Blog_Media/qtq80-1fBtOD-300x200.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/four-sources-to-consider-when-restructuring-your-income-post-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Deciding the fate of marital property is a crucial aspect of any divorce settlement. The process often involves intense emotions and complex financial considerations, making it all the more challenging. One common alternative couples are considering to handle the marital home that has gained popularity in today’s unique market conditions: loan assumption. The recent increase in both interest rates and home prices has added additional pressure on homeowners navigating divorce, limiting their available options. As a result, many individuals are actively seeking creative and practical alternatives. In this blog post, we explore the nuts and bolts of loan assumptions to help you make an informed financial decision that aligns with both your financial goals and your unique divorce circumstances. What is a Loan Assumption? In addition to significant increases in housing costs that we have seen since the pandemic,, coupled with the reality of doubling housing costs for a divorcing couple, many couples are evaluating loan assumptions to minimize overall housing expenses. This option provides an opportunity to maintain current, affordable housing costs, retain homeownership, and/or to provide stability for children. Is a Divorce in Your Future? Get Prepared with These Essential Tips. A qualified loan assumption is when one party of a joint debt, such as a shared mortgage, qualifies to retain and retitle the original loan into their name, solely. This essentially releases the other debtor (typically a former spouse or domestic partner) from the mortgage payments and debt obligation. Many homeowners are looking to explore this option in a divorce under the assumption that the individual retaining the loan will be able to keep the original loan terms, where they hope to keep previous low mortgage rates and their associated lower, current mortgage payments. Clients in the Colorado area are looking into loan assumptions to determine if they are an option as they go through their divorce. Oftentimes, bank representatives may even confirm the availability of a loan assumption. However, according to the Certified Divorce Lending Association, loan assumption options may not always meet client expectations post-divorce. It’s important to work with a Certified Divorce Lending Professional (CDLP) or mortgage planning assistance to determine which mortgage path is best for you during your divorce and to determine what information you can rely on to make decisions in your divorce that remain reliable post-divorce for agreements to be carried out. Keep these important considerations in mind as you evaluate a loan assumption in you divorce: Not All Institutions Offer Loan Assumptions A CDLP can help you review your loan documents to determine if your current institution offers loan assumptions. Sometimes calling your loan provider and inquiring can be misleading (see bullet point 5 below). Some Types of Loans Are More Likely to Provide Loan Assumption Government mortgage loans such as FHA, VA, and USDA loans often offer loan assumption programs. When it comes to VA loans, if the individual assuming a VA loan is not a veteran, the veteran will forgo their VA entitlement as long as the VA loan assumed is operating until it is paid in full. This limits a veteran’s ability to obtain another VA loan on a future property. Conventional loans may offer loan assumption programs, but are not required. Actual Loan Assumption Terms May Not Reflect Original Terms While institutions may offer loan assumption, they are not required to provide a loan assumption with the original loan terms, such as the original low interest rate. They can sometimes offer a loan assumption with higher rates or any other terms their current procedures deem necessary at the time. No Cash/Equity Buy-Out Absolutely no cash can be taken out during a loan assumption. Therefore, if the spouse who is not retaining the home requires an equity cash payment in order to produce an equitable and agreeable division of asset terms, a loan assumption can not be used to meet those needs. Mortgage Sales Practices Can Be Misleading Mortgage sales is a practice and financial institutions do their best to keep their current customers’ business. Be aware of bait and switch behaviors where mortgage professionals offer you one thing and, after further inquiry or qualification processes, offer you something different then expected, with higher rates then the original loan, a traditional refinance loan, or possibly no offering at all. Once again, working with a Certified Divorce Lending Professional for mortgage planning assistance can help protect you from these practices and provide reliable post-divorce information. Is Assuming a Loan Best for You? Even armed with this information, decisions around a loan assumption can be challenging. As you consider whether this is the right financial path in your divorce, keep the following in mind: While you do normally save on fees in a loan assumption (as compared to a refinance), you lose the option of re-amortizing your loan over a new 30-years. The latter approach could result in lower payments and provide you with more cash flow as you transition into new financial responsibilities on your own. Modeling the option of loan assumption against refinancing with different teams and current interest rates is important. Find a Certified Divorce Lending Professional to help you align your lending strategy to your long-term financial goals. While a loan assumption doesn’t require a full refinance, you do have to qualify for the payments on your own. This includes an evaluation of your income, assets, credit scores, and more. Typically, loan assumptions are a more affordable option than a refinance, because there are fewer fees, no appraisals needed, no application fees, and no fees paid to title/insurance companies. Consider the timing of your divorce alongside the timing of this decision. More traditional refinances typically take 30 days and loan assumptions can take 3-6 months. During this time, interest rates can also change, which could impact your strategy. Deciding the fate of marital property in divorce is a complex and emotionally charged process. However, amidst the challenges, loan assumptions have emerged as a popular alternative to refinancing or selling the marital home in today's unique market conditions. By staying informed and seeking professional guidance, you can navigate the complexities of divorce and make sound financial choices for a stable future. At A.M. Financial, we can help model various approaches and show you how they will impact your budget, cash flow, and long-term goals. Contact us to learn more about how we can support your evaluation of a loan assumption or other financial aspects of your divorce in a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/08/2023", "datePublished" : "01/08/2023", "headline" : "What is a Loan Assumption?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-9SCbQC-2048x1365-1.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/what-is-a-loan-assumption", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "While it is always important to build a budget, it’s essential when you go through a significant financial change like one that follows a divorce. Budgets should include everything from necessary, known expenses to measurable, planned expenses and also include estimates for items that are often overlooked or harder to predict. Planning future financial needs is crucial in your divorce because it helps you illustrate the details of your financial situation and helps you build a case to receive maintenance. During and following your divorce, budgeting can give you peace of mind and security during a time of uncertainty. In this post, we outline standard expenses to include in your budget, as well as eight items that are often overlooked as you plan your financial situation. Standard Budget Items Some expenses are easy to plan for post-divorce because they are predictable, easy to estimate, and known financial commitments. These items include: Mortgage or rent Car payments, gasoline, and insurance Food Entertainment Utilities Clothing However, splitting your household into two and taking on the sole responsibility for some expenses can lead to costs being underestimated, overlooked, or not well-defined. That’s why it is critical to include additional budget estimates for items that are harder to predict. 8 Items Often Overlooked Building an accurate budget means understanding whether you’ll have enough money to comfortably live and respond to the unexpected. Here are eight critical budget costs that are often overlooked, especially during and after a divorce. Insurance Costs If your health insurance was covered through your spouse’s employer, you may be surprised about your out-of-pocket costs post-divorce. Usually, decent plans are offered by many employers at minimal costs to employees because employers help pay monthly premiums. When you are on your own, these expenses quickly rise. One option includes filling out COBRA, which is an extension of your current insurance plan through your ex-spouse’s plan where you are required to pay for the full monthly premium (available for up to two years after divorce). Another option is your state’s health insurance exchange (in Colorado, this is called Connect for Colorado). If you need specific coverage for prescriptions, check how your new insurance covers those prescriptions. On the auto and home insurance side, if you buy a new home or car as you start to rebuild your own life, you may incur higher insurance costs that you didn’t anticipate. Childcare Costs Following your divorce, you may no longer be able to build a schedule in which you don’t need childcare, even if you previously worked out a schedule with your spouse or other family members. Typically, your need for childcare will increase as a single parent. This is critical to calculating as it is included in your sworn financial statement. Child care is also included on the child support worksheet in Colorado and influences obligation amounts. Therefore, it is critical to have a clear expectation of these costs during the year (and how the costs may vary during the school year and throughout the summer). Especially if you are expected to work more hours than you did during your marriage, it is important to get ‘credit’ through child support from the other parent. Also, consider pet care. If you plan to rejoin the job force, for instance, you’ll need to pay for services for your animal while you are working, even though your spouse and you may have been able to share these responsibilities and build work schedules around them in the past. Emergency Savings Account Having up to six months of living expenses in an emergency fund provides peace of mind. You may need to rebuild this by putting money aside each month to create an emergency fund for things like job loss or a significant home repair. Retirement Savings Many divorcees need to rebuild their retirement savings. Participating in an employer retirement plan can make this easier as they often provide matches to help you reach your retirement goal. If you have been out of the workforce for a long period of time and you are trying to support a case for maintenance, it is important to include necessary retirement savings needed on your sworn financial statement in order to reasonably retire if your current assets and growth are not sufficient to do so. Memberships Often, memberships to everything from fitness clubs to Amazon Prime include a family rate. After a divorce, you’ll take on 100% of these costs as you secure your own memberships and subscriptions to important experiences and opportunities. Plan accordingly because small costs can add up quickly. Gifts and Special Occasions When your budget is tighter, you may feel the impact of holiday gift giving or a vacation a lot more than you did with two incomes. Consider setting aside some month each month in your budget to pay for these experiences and gifts. Home and Car Maintenance While it is easy to plan for monthly car and home payments, and even approximate gas and electrical costs, budgeting for unexpected repairs is trickier. Without extra money set aside, you could find yourself significantly dipping into your emergency savings fund for things like this. Consider the total cost you want to spend on home updates in a year and budget accordingly, on a monthly basis. For auto issues, plan for at least one significant expense a year and set aside money monthly to fund this emergency repair. Future child expenses If you have young children, some of the following items might not be on your radar yet, but they should be addressed in your parenting plan and future budget when they become applicable. Planning for and having agreements outlined in your parenting agreement reflecting how some of the following items will be handled can be extremely helpful. You are not obligated to agree to these expenses, but being proactive and setting expectations is key to successfully funding these future costs, lowering future stress and can provide the framework for a better co-parenting relationship. You can define these expenses as part of your divorce decree and parenting plan agreements: Cell phone costs Car insurance College savings/costs Future Budget Planning Creating a successful budget is critical to your financial future. At A.M Financial, we help ensure that you are set up for future success after your divorce with thorough planning and advanced financial expertise. Capturing 100% of your expenses, no matter if you are a single parent or past retirement age and on a fixed income, helps reduce stress and create more certainty about your finances. Contact our team to learn how we can help with this critical part of your financial planning.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2023", "datePublished" : "01/06/2023", "headline" : "Post-Divorce Budget Planning", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-TPHjzr.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/post-divorce-budget-planning-dont-overlook-these-8-items", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```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 you are newly divorced, you’ve probably noticed that many aspects of life no longer look the same. From holidays, to gatherings with friends, to vacations, your post-divorce experiences are simply different. When it comes to travel, you have new considerations to make as you plan summer getaways – from a safety, financial, and logistics perspective. If you have kids, those changes are likely even more dramatic, especially if your parenting plan requires disclosing the details of travel plans by a certain date each year. Even if you are planning to travel solo, you’re likely evaluating different destinations with a new set of expectations and needs, possibly even considering locations that promote self-care and healing. You also may be more concerned about the safety of your destinations now. Visits to see friends or vacations with friends or family may be a higher priority for post-divorce travel. Finally, many newly divorced individuals feel inspired to create new traditions, patterns, and go-to destinations. You may be eager to find new favorite getaways that are different from what you experienced in your marriage, and these new destinations may more strongly reflect your current values and needs. In this post, we outline what to consider when planning travel, if you are newly divorced. Plan, Plan, Plan First off, successful post-divorce travel requires far more planning than previously as you rebuild your relationship with money. Since you may be the only adult travelling, either with your kids or alone, you’ll need to more thoroughly plan both the logistics and finances of your time away. Your finances will likely be tighter post-divorce, and therefore, you’ll need to budget for your vacations all year long by: 1. Putting vacation dollars into a fund each paycheck for travel 2. Scaling back your travel expectations so you can comfortably vacation without the stress of over-spending From a planning perspective, you can prepare for post-divorce travel by: 1. Taking advantage of travel apps, travel blogs, or even the assistance of travel agents. These resources can help you understand exactly what you are getting into at your designation, including the area you are staying, safety, transportation options, and more. 2. Considering hotels with programming and activities so you don’t have to do as much running around on vacation. This is especially helpful if you are traveling with kids as the hotel staff can naturally help with your itinerary by keeping the kids entertained. Programming and onsite activities can also reduce the stress of navigating a new place by yourself. If you are traveling with kids, invite them to co-create the experience with you by choosing activities, destinations, cruise ships, rental cars, hotels, and more. Get them invested in the planning and excited about the new experiences you’ll have together. If you are vacationing solo, consider your travel as a form of therapy or healing from your divorce. Instead of planning a week of partying in Mexico, consider relaxing and rejuvenating activities that support self-care. In either case, don’t overdo it with sightseeing, packed itineraries, or complex transportation plans. Get Creative New experiences require not only more planning, but also more creativity. Especially if you are a new single parent, resist the urge to splurge on a vacation for your kids as a way to win them over in the divorce or reward them for what they went through. Don’t overextend yourself financially. Kids will enjoy a creative and simple vacation that is meaningful and fun more than a vacation that creates financial stress. Getting creative may look like exploring options to camp or take a road trip with several interesting destinations. Explore the option of staying with family in a new city, which can help you and your kids bond with other family members, as well as save you on lodging and even planning time. House-swapping with family or good friends in another city might also be a way to save money. Lastly, always consider vacation destinations close to home. There are several ways to save money by joining travel programs or even using credit card points for travel and/or lodging. Spend some time researching travel rewards such as getting a free night after you stay a number of nights. Regularly check travel resale sites for deals, especially if you have the flexibility to travel at the last minute. In some destinations, you may find options to save money on lodging by volunteering on a property. Not only does this provide a vacation that has a component of giving back, but you could save significantly on costs. For example, there are farms in Hawaii and Costa Rica, and possibly even in your home state, that offer simple, affordable, or even free lodging in return for a few hours of work in the kitchen or garden. The most important two things to remember about post-divorce travel is to be flexible and stay positive. Whether you are traveling alone or with kids, your ability to adapt and stay optimistic can remind you and your family that life inevitably changes and can still be fun and fulfilling under new circumstances. Successful travel post-divorce means successful budgeting year-round, more planning, and creativity in your approach to vacations. The team at A.M. Financial can help you design a budget that allows you to save effectively all year long so that you can continue to travel post-divorce. Learn more about our services by attending an upcoming event in the Denver area or contact Amy Mahlen, CFP®, CDFA®, for a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "04/05/2023", "datePublished" : "04/05/2023", "headline" : "Summer Travel for the Newly Divorced", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-0648RF.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/summer-travel-for-the-newly-divorced", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Divorce will introduce you to a whole new set of legal and financial terminology, as well as acronyms. Understanding the processes, steps, and orders are essential to having a successful financial future. When you work with a financial expert, especially one who has experience supporting the divorce process, you’ll have peace of mind knowing you have the right orders in place to secure your portion of the retirement funds which in some cases requires Qualified Domestic Relations Orders (QDROs). In this post, we outline what you need to know about QDROs. QDROs Defined A Qualified Domestic Relations Order is a type of domestic relations court order, judgement, or decree that could pertain to property rights, spousal support, or child support. It assigns one party the right to receive some or all of the benefits of a retirement plan. More specifically, a QDRO requires that a portion of a private sector employer retirement plan be assigned or paid to a spouse in the case of a divorce. QDROs are used for employer plans that are subject to ERISA laws, which include 401Ks, profit sharing plans, and pension plans. Accounts that do not require a QDRO include IRAs, Roth IRAs, Simple IRAs, and SEP-IRAs (which require applicable custodian transfer forms that are unique to each institution). Most public employer plans such as PERA (in Colorado), Thrift Savings Plans, Federal Employee Retirement System, and Civil Service Retirement System have their own unique process and forms. You may wonder why you need this special documentation when most of your assets can be divided and agreed upon in your divorce decree. Retirement accounts are a little different. A retirement plan administrator can not legally split the participant’s funds to pay the former spouse following a divorce without a QDRO. In your divorce, you must hire a qualified expert to draft a QDRO that outlines the terms of your agreement as they relate to the employer retirement plan. A retirement plan administrator must approve and accept these terms before it is submitted to the court for final signature and subsequent processing. Take steps to get your QDRO started early as the total process of getting a QDRO drafted, approved, and processed usually takes a minimum of three months if your situation is not complex and documentation is in good order. The sooner a QDRO is processed post-divorce, the less likely you are to experience complications and potential conflicts that can arise concerning the division. Challenges that can surface include changes in account values, unanticipated death of the account owner, beneficiary issues, and estate problems. Acting early can help minimize post-divorce court proceedings, resolve issues proactively, allow both parties manage their finances appropriately, and help everyone move forward. Tax Implications When outlining a QDRO, there are no tax consequences for transferring funds for either party, as long as the beneficiary spouse deposits those funds into a retirement account like an IRA rollover or other qualified employer account. However, if the receiving spouse would like to withdraw from their portion of funds awarded through the QDRO, that can be written into the order. In this case, the beneficiary spouse can do so and avoid the 10% early withdrawal penalty (if they are not 59 ½ years old). However, those funds will still be subject to regular income taxes and mandatory tax withholdings (if applicable). Once the QDRO is complete and the assets are divided, this QDRO exception to the 10% early withdrawal penalty does not apply. This exception is also only available to the receiving spouse and not the employee spouse who owns the account who must continue to follow allowable withdrawal instructions available to the plan. Issues to Consider In our experience, some common issues arise that require extra consideration in this process. Some of those top issues to talk with an expert about include: Date of Division: This will need to be agreed upon in the QDRO. It is typically the final decree date but there could be reasons to choose another date. Type of Division: You can divide the retirement accounts in different ways, such as a percentage or dollar split. This decision can be affected by the value of the account in a fluctuating market and/or future value expectations. The values you see during the QDRO process could change (even significantly) by the time you actually split up the accounts due to market volatility and the types of investments you have in the portfolio. If the receiving spouse is worried that the account may lose value in the future before the QDRO is complete, they can request that the employer spouse provide their portion in cash so that it is not subject to possible market losses before the transfer is complete. It is wise to speak with a CDFA to understand whether this is appropriate for your situation. Beneficiary changes: Outlining when beneficiary changes can be made, which is usually after the QDRO is complete. Comprehensive evaluation: If the employee spouse is the business owner of the plan, take extra precautions to ensure that not only the employer portion is being accounted for in the QDRO. Owner amounts could also be considered marital property and therefore possibly subject to division, in addition to the employee portion. Pension Plan Payouts: Each plan is set up differently regarding when a previous spouse (also referred to as ‘alternate payee’) can begin taking benefits. For example, some plans may only allow for an alternate payee to begin receiving payments after their ex-spouse ‘retires’ or begins taking benefits themselves. Other plans may allow the alternate spouse to begin payments any time after a specific age, regardless of whether the ex-spouse is ‘retired’ or has started receiving benefits themselves. Pension Plan Survivorship issues: It is important to review and understand how the retirement plan will operate in the event of the participant’s death and how it could affect the survivors benefit after a QDRO is completed. Plans vary significantly, which could affect the overall property division suitability. Getting the right support early in your divorce is critical to successfully addressing the complexity of a QDRO. The team at A.M. Financial can help. A CFDA is your ally in this process and can help protect your financial future and retirement savings. As part of a holistic financial plan, based on your goals and vision, we can help you understand not only how a QDRO works, but also how to prevent an unexpected tax bill when you divide retirement assets. If you would like to learn more about our services, contact us for a complimentary consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/05/2023", "datePublished" : "01/05/2023", "headline" : "What is a Qualified Domestic Relations Order (QDRO)?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-DvnTO4.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/what-is-a-qualified-domestic-relations-order-qdro", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ```