--- title: Our Blog - AMF Divorce | Taxes (2) description: Taxes | 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 # Taxes (2) ## [Types of Divorce Professionals & How They Help](https://amf-divorce.com/our-blog/divorce-professionals-mahlen-financial) June 01, 2022 Like so many other things, divorce has gotten more complex overtime. Divorce has also evolved into a more integrated and holistic process, with the involvement of several professionals and experts... [CONTINUE READING](https://amf-divorce.com/our-blog/divorce-professionals-mahlen-financial) ## [Financial Opportunities Surface Within Challenging Spousal Support Changes](https://amf-divorce.com/our-blog/financial-opportunities-surface-within-challenging-spousal-support-changes) June 01, 2022 The Tax Cut and Jobs Act (TCJA) that went into effect this year for divorcing couples has drastically changed the financial landscape for individuals from prior years. The most significant... [CONTINUE READING](https://amf-divorce.com/our-blog/financial-opportunities-surface-within-challenging-spousal-support-changes) ## [Property Division Values, Part 1: Retirement Accounts](https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts) June 01, 2022 When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with... [CONTINUE READING](https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts) ## [3 Maintenance Options & What You Should Consider](https://amf-divorce.com/our-blog/3-maintenance-options-what-you-should-consider) June 01, 2022 As you go through your divorce, it may feel like you are gaining a whole new vocabulary as you learn about the different aspects and components of everything in separation agreements. Maintenance... [CONTINUE READING](https://amf-divorce.com/our-blog/3-maintenance-options-what-you-should-consider) ## [What is a Certified Financial Divorce Analyst?](https://amf-divorce.com/our-blog/certified-financial-divorce-analyst-a-m-financial) June 01, 2022 Going through a divorce can often feel lonely and confusing. Even if you know others who have been through a divorce, the process has evolved significantly in the last decade, and friends and... [CONTINUE READING](https://amf-divorce.com/our-blog/certified-financial-divorce-analyst-a-m-financial) ## [Non-Spousal Retirement Beneficiary Planning](https://amf-divorce.com/our-blog/retirement-beneficiary-planning) June 01, 2022 After your divorce is finalized and the various accounts divided and settled, you will be able to update your beneficiaries. Assuming your partner or spouse was previously your primary beneficiary,... [CONTINUE READING](https://amf-divorce.com/our-blog/retirement-beneficiary-planning) ## [Post-Divorce Financial To-Do List](https://amf-divorce.com/our-blog/post-divorce-financial-to-do-list) June 01, 2022 Throughout the divorce process, you’ll likely be busy reviewing everything from financial documents to court filings. You may be consumed with tasks like finding a new place to live or going... [CONTINUE READING](https://amf-divorce.com/our-blog/post-divorce-financial-to-do-list) ## [Legal Separation vs. Divorce: What's Right for Me?](https://amf-divorce.com/our-blog/legal-separation-vs-divorce) June 01, 2022 While divorce is probably a very familiar topic to you, legal separation may not be something you hear about as often, or fully understand. While these two approaches to cutting ties with your... [CONTINUE READING](https://amf-divorce.com/our-blog/legal-separation-vs-divorce) ## [Property Division Values, Part 2: Non-Retirement Assets](https://amf-divorce.com/our-blog/property-division-values-part-2-non-retirement-assets) June 01, 2022 When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with... [CONTINUE READING](https://amf-divorce.com/our-blog/property-division-values-part-2-non-retirement-assets) ## [Will Spousal Support (Alimony) Continue to Be Tax Deductible in 2018?](https://amf-divorce.com/our-blog/will-spousal-support-alimony-continue-to-be-tax-deductible-in-2018) June 01, 2022 Currently, alimony is on the chopping block under the Tax Cuts and Jobs Act (TJCA), meaning there would be no deduction provided for the paying spouse and the receiving spouse would no longer... [CONTINUE READING](https://amf-divorce.com/our-blog/will-spousal-support-alimony-continue-to-be-tax-deductible-in-2018) - - [1](https://amf-divorce.com/our-blog/tag/taxes) - [2](https://amf-divorce.com/our-blog/tag/taxes/page/2) - ##### 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" : "Like so many other things, divorce has gotten more complex overtime. Divorce has also evolved into a more integrated and holistic process, with the involvement of several professionals and experts being the “new normal” in many cases. In the past, these kinds of professionals were more commonly brought into a collaborative divorce, and it’s now clear that they can help significantly in most divorces. With so many types of divorce professionals to help, whether or not to hire an attorney isn’t the only decision you have to make and an attorney may not be the best professional to contact first, depending on your needs. With types and methods of divorce expanding, so do your options when it comes to hiring divorce professionals. Here are eight types of divorce professionals and how they can help. Attorney An attorney is the most common divorce professional to employ. Family law and court procedures are complex and an attorney is trained and experienced in the ins and outs of family law. Make sure to interview a handful of attorneys and choose one with experience in your state as many laws do vary by state. You can work with an attorney in a variety of ways, including: Limited scope or partial representation: An attorney will only deal with a few agreed upon issues or serve in a consultative fashion. Full representation: An attorney will handle every part of your case. Mediator A mediator is an impartial and neutral person who assists parties who are negotiating their different perspectives about the divorce settlement. A mediator assists and guides the parties toward their own resolution. They facilitate a private process where, as a neutral third party, they discuss options with the parties to try to resolve any disputes about the pending divorce decree or parenting plan (if applicable). Some mediators will help explain the court process, paperwork and what must be filed when however they will not complete or submit anything to the court. Is a Divorce in Your Future? Get Prepared with These Essential Tips. They can be appointed by the court or privately selected by agreement of both parties. Most courts will require you to try mediation before litigation. Mediation is a far less intimidating step than litigation proceedings and allows you to discuss your wants and desires in a more casual way before going before a judge. It’s safe and usually recommended to try mediation because neither party can bring up the details of mediation if your case does go to court. Divorce Financial Professionals There are a variety of divorce financial professionals you can work with based on your unique situation and goals. For example, A.M. Financial provides financial services to help you build a new financial picture. Having financial services and expertise available during the divorce process can dramatically decrease your stress, anxiety and uncertainty regarding your finances during this time. Not only do financial planners help you stay better informed on your situation, they can support the exploration of creative settlement options based on your short and long term goals. Specifically, a professional with the robust Certified Financial Planner™ designation who specializes in divorce can help you: Identify cash flow problems Address and plan for future income tax concerns and changes Understand the financial implications of keeping the marital home Identify business expenses to be added back to income Analyze and value retirement assets Understand the current marital value of a pension Prepare future cash flow needs Explain and plan for distributions from retirement accounts Establish and integrate a comprehensive, workable budget into the agreement that sets up both parties for success If you are specifically concerned about achieving an equitable divorce settlement, a Certified Divorce Financial Analyst (CDFA) uses their knowledge of tax law, asset distribution, and financial planning to help support the couple as a neutral party or on an individual basis as an advocate for one party. CDFAs help parties consider both the short and long-term financial impact of their divorce settlement arrangements so they can make the most informed decisions possible. Divorce Coach A divorce coach will help you with the transition into your new life after divorce. They will help you navigate your new circumstances by providing support and resources to help you with everything from your new solo parenting responsibilities to finding a new home or job. They may also help you work through the difficult emotions surrounding your divorce essentially trying to keep from emotionally ‘falling off the rails’ and provide resources to support your healing. Realtor In most divorces, property is a joint asset that needs to be split between parties. Typically the largest asset for divorcing couples is their home, and a realtor can help with the process of valuing and selling the home in the divorce process. Make sure to choose a realtor with expertise in selling property amidst a divorce and someone who will keep the best interest of both parties in mind (including selling price, timelines, negotiations, etc). A realtor can also tell you whether the market is good for parties to sell their home and find new, individual homes. A realtor who is trained in divorce has experience working like a mediator with a couple who may not always agree on items such as listing price, items to fix, etc. during the selling process. Mortgage Lender Mortgage Lenders can help partiers understand proposed property settlement agreements and the short and long-term impact of these settlements. Based on mortgage rates and lending dynamics and proposed settlement agreements, they can help parties understand: Whether they should sell their home as part of their settlement Whether one party should and can refinance the home on their own What lending rates look like and how that will impact financing the current or new homes If you have a complex property arrangement, there are even Certified Divorce Lending Professionals who bring the financial knowledge and expertise of Divorce and Family Law, IRS Tax Rules, and mortgage financing strategies into real estate and divorce situations. They can be hired as a neutral third party or by one individual to make recommendations and suggest scenarios when it comes to refinancing or selling property. It is essential to review your proposed settlement agreements with these proposals before officially signing any agreements. Parental Responsibility Evaluator or Child Family Investigator Either party can request or the court can order a Parental Responsibility Evaluator (PFE) or a Child Family Investigator (CFI). A CFI, which is more common than a PRE, investigates family dynamics and makes recommendations in the best interest of the child around parenting time and decision-making. They will often use questionnaires, visits, interviews, reference checks, and other approaches. A CFI assessment typically takes about 60-90 days and results in a report that will detail recommendations to the judge or attorneys. A PRE is specifically a mental health professional who focuses on determining appropriate parenting time and decision-making. Sometimes there are specific circumstances or unique concerns that require a PRE such as substance abuse issues, mental health concerns, abuse, or sexual misconduct. A PRE helps determine things like parenting rights and schedules as well as the need for therapy for the family or individuals within the family. The evaluation by a PRE typically takes 90 days. Divorce is becoming increasingly more complex, which often means you need a more robust team to ensure you get the outcomes you want. We are here to provide the support you need and join your team or divorce professionals. If the financial side of your divorce isn’t clear, or you want to model and discuss different ways to divide finances based on your goals, we can help. Schedule a consultation to learn more.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Types of Divorce Professionals & How They Help", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-0hSfLL.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/divorce-professionals-mahlen-financial", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "The Tax Cut and Jobs Act (TCJA) that went into effect this year for divorcing couples has drastically changed the financial landscape for individuals from prior years. The most significant change is that spousal support (alimony) is no longer deductible if paid or taxable income if received. Many states, including Colorado, have updated spousal support guidelines to take into consideration these modifications. Overall, these changes have effectively reduced financial resources for both spouses because Uncle Sam is receiving a larger slice of the pie. Although this repeal has been a headline story in the media, what other financial issues have been affected and are there any new planning strategies to help navigate the new terrain? Payor’s Challenges: Most notably, the individual paying spousal support will have a significantly higher tax burden. Therefore, their ability to claim other tax deductions such as medical deductions (taxpayers can deduct medical expenses that exceed 10% of their AGI) or any tax incentives available that are linked to income have also been affected. Eligibility to participate in a Roth IRA may also be more difficult to qualify for since contributions are only available to taxpayers with an AGI of $122,000 or less in 2019. Higher income earners may also find themselves paying the 3.8% Medicare surtax that is levied upon single taxpayers with incomes above $200,000 whereas married couples filing jointly weren’t subject to this tax until their income was above $250,000. Recipient’s Challenges: According to the Pew Research Center, ‘Grey Divorces’ for those over the age of 50, have doubled over the past 25 years. This combined with the recent tax overhaul has made saving for retirement significantly more challenging during a period of time where most couples are trying to make the most of their last minute savings efforts. Most spousal support recipient’s over the age of 50 have spent the past 20+ years tending to family at home, relying on their spouse’s income to build their nest egg, and now depend solely on spousal support for the majority of their income. These spouses, with no earned income, are not eligible to contribute to an individual retirement account (previously spousal support was considered pass through ‘earned income’ and was eligible to contribute to individual retirement accounts). Therefore, the ability to save for retirement during the last leg of the race before retirement has been significantly hindered if additional employment is not obtained or considered during divorce proceedings. Recipient’s Opportunities: A stark difference between taxable and non-taxable spousal support has completely changed the financial landscape for many divorcees. Change can be challenging however, when we are able to re-frame change we can also find opportunity. This year while working with divorcees it has been my goal to uncover just that – what are the opportunities in this new environment? The following are some examples of what has surfaced for spousal support recipients: *Spouses with extremely low taxable income will be able to deduct a larger portion of their medical expenses that are over 10% of their AGI. *Individuals working part-time earning less then $15,570 this year while receiving support will qualify for the Earned Income Tax Credit that wouldn’t have been available in prior years. Creating Tax-Free Retirement Income: Retirement planning opportunities may exist especially for the Grey Divorcee’s who can take advantage of the vast difference in taxable income before and after retirement. The following graph shows the significant difference for a 55-year-old receiving $50,000/yr in tax-free spousal support plus earning $20,000/yr through employment versus at age 67 years when spousal support ends and nearly all income sources are completely taxable: Based on the above example, 72% of the income prior to retirement is tax-free with only $20,000 being taxable income whereas, nearly all the income after the age of 67 is taxable (Social Security is 85% taxable). The difference in tax liability would increase approximately 5.5 times due to this disparity assuming the individual is claiming the standard deduction. Extending Tax-Free Spousal Support into Retirement The situation above can provide an opportunity to utilize low income tax strategies for several years while spousal support is being paid. Annual Roth IRA Conversions can take advantage of these income differences effectively extending the life of retirement assets. The following example shows how this strategy works prior to age 67: Scenario 1: shows the growth of a $200,000 IRA account growing at 7% per year with no additional contributions from 55 to 67 years old. At the age of 67, $420,970 is available in a fully taxable IRA account. All withdrawals from a traditional IRA account will be 100% taxable income (shown as red in the above chart) which usually increases the amount of withdrawal a taxpayer needs in order to pay the necessary taxes associated unless other readily available assets are available outside the IRA. Scenario 2: is an example of utilizing an Annual Roth Conversion strategy to transfer retirement assets from a fully taxable IRA account to a tax-free Roth account, assuming the same 7% growth rate for both accounts. On an annual basis, $22,000 is transferred from the IRA to the Roth IRA and taxable at 12%. Over the course of a 12-year period the taxpayer pays $37,380 in taxes associated with the conversions. By the age of 67, the balance in the fully taxable traditional IRA is almost zero and the bulk of retirement savings, $417,852, are in the Roth IRA account where all future growth and distributions are tax-free (shown as green in the above chart). It should be noted that because distributions from the Roth account are tax-free, the necessary required withdrawals are smaller because no tax liability is created with the withdrawal. Therefore, the Roth IRA will retain its principal, continuing to grow during retirement at a much more robust level providing significant additional financial resources to retirees over their lifetime compared to the IRA account. Conclusion Just as the stock market landscape changes from year-to-year (or day-to-day recently!) the overall financial landscape for divorcing couples has dramatically changed, especially for those over the age of 50. As we navigate the new terrain, opportunities to build wealth in any circumstance are still available with proactive planning. Working with a Certified Divorce Financial Analyst (CDFA) and Certified Financial Planner™ while settling a divorce can strengthen post-divorce financial recovery. You wouldn’t retire without a financial plan… it might be messy! Don’t divorce without one either!", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Financial Opportunities Surface Within Challenging Spousal Support Changes", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/0cbd19_d42816d382044d798b0ea8fa3d0d7241~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/financial-opportunities-surface-within-challenging-spousal-support-changes", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with outstanding debt balances that are deemed to be marital. Typically, above all else, the focus and end goal is to split property 50-50. With so much emphasis on this spreadsheet that dictates the remainder of your financial future, is there anything missing that could dramatically skew the end results? The old cliché of ‘nothing is certain in life except death and taxes’ rings loud and true in divorce, don’t ignore them. As it applies to the property division worksheet, are taxes being considered? How can evaluating taxes dramatically change the actual results down the road? In this series, retirement accounts, non-retirement investments, home equity and rental property will be discussed. Part 1 – Retirement Accounts The reason most people sock money away in a retirement account is because it offers tax benefits. Most of the time, the statement value is not the amount the individual receives because the value is before-tax. If retirement assets are being used to offset home equity division or if there are current cash needs from retirement accounts that will trigger taxes, the after-tax values should be considered. Consider chopping 15%-39% plus an additional 10% early withdrawal penalty away from the current value listed, and now it may only be worth a fraction of what appears on the spreadsheet. Be sure to pay attention to Roth IRAs and Roth 401ks. These accounts are a ‘horse of a different color’ in the retirement category because contributions are made on an after-tax basis. If Roth assets are withdrawn after the age of 59 ½, the earnings are completely tax-free! During retirement the value of a Roth does not go on Uncle Sam’s chopping block versus other retirement assets that are 100% taxable. The earning potential of a Roth is also considerably more powerful because of this difference as well. For example, if husband kept an $100,000 IRA and wife retained her $100,000 Roth IRA today, 10 years down the road during their retirement with no additional contributions, the accounts would each be worth $200,000 with a 7.2% annual return. However, if the husband were to distribute his $200,000 he would have $140,000 (assuming he was in the 25% tax bracket plus state taxes) whereas the wife could distribute her Roth account and still have $200,000 – a big difference! Roth IRAs have more convenient features – any contributions made to a Roth IRA can be withdrawn at any time tax-free and penalty-free! Therefore, if someone has current cash needs the actual value of a Roth IRA would be significantly more to them individually. Conclusion Overall, the current values listed on the property division worksheet are not useful when applied to individual circumstances and priorities moving forward. In some cases, short term cash needs are more important versus long term retirement savings/income for others. The real value of the property division and the actual end results has more to do with your priorities then it does relying on a 50-50 split. Let’s build a property division strategy that works best for you and your future! You wouldn’t retire without a financial plan… it might be messy! Don’t divorce without one either! Get the information you need to get started here, or Click here to schedule a free initial consultation with Amy", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Property Division Values, Part 1: Retirement Accounts", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/e261dd_6d7ba347aa384b24a41dfc721cad00c3~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/property-division-values-part-1-retirement-accounts", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "As you go through your divorce, it may feel like you are gaining a whole new vocabulary as you learn about the different aspects and components of everything in separation agreements. Maintenance is one of the topics you are sure to discuss and agree upon, no matter which type of divore you are going through. In this post, we do a deep dive into maintenance, what you can expect, options to consider, and the risks of those approaches. What is Maintenance? Maintenance is payments made by one spouse to the other that assist and support the recipient spouse. Sometimes maintenance is also called “alimony”. The details of how maintenance is structured is very state-specific and situation-specific. Some states, like Texas, rarely grant maintenance while other states more generously order maintenance, so it’s important to know state laws or work with an attorney in your local area. In Colorado, these payments are time-limited and based on the length of your marriage. Maintenance may be awarded because “earning power” is viewed as a shared marital asset. These payments are intended to even out income or earning power, post-divorce. Maintenance is based on the standard of living established in the marriage and paid based on the likelihood that each party can maintain a reasonably comparable standard of living. Court-mandated support from one spouse to the other is ultimately intended to provide for the receiving spouse’s financial needs until he or she can obtain the education or work necessary to provide for his/her own needs. In other words, it helps the lower-income-earning spouse “get back on their feet” and fully provide for him or herself. Some other details that are important to note: Generally, maintenance payments end if the recipient gets remarried unless agreed upon otherwise. Maintenance is paid in addition to child support if there are children. Maintenance payments impact child support amounts because these payments are counted as income for the receiving spouse. Due to the Tax Cuts and Jobs Act (TCJA), new maintenance agreements entered into starting in 2020 or after are a tax-free transfer. For agreements made prior to 2020, the payor receives a tax deduction and the recipient pays taxes on maintenance. How can Maintenance be structured? Not all maintenance is the same and there are 3 main ways maintenance can be structured: modifiable, contractual, and lump sum. Here are details and considerations of each structure: Modifiable As the name states, this structure of maintenance can be changed throughout the course of the agreement. Either party may file a motion to modify the original court order at any time and the payor is required to pay the court an ordered amount until a change is granted (which can often take months). Usually, a 10% or more deviation in the current maintenance amount is required before a change will be considered. This approach protects future changes in circumstances for either party that might impact their ability to pay an amount determined based on incomes of the past. However, modifiable agreements can be risky because they can cause continual post-decree conflict. Contractual In contractual maintenance structure, maintenance amounts cannot be modified, regardless of any changes in income or circumstances to either party unless otherwise agreed upon (such as disability, cohabitating, etc). This approach provides more stability and predictability for both parties. It can also provide protection to a spouse who is worried about post-decree litigation and conflict, especially if the divorce process has been full of disputes. This approach can be risky for both parties if the future earning power or health of the paying spouse is subject to change. Lump Sum As it states, in this approach, a spouse fulfills his or her entire alimony obligation at once, up front with a single lump-sum payment. This lump sum payment comes from assets, instead of monthly payments. This is only an option if there are sufficient assets available to pay the entire sum at the time of the divorce. The paying spouse might prefer to take care of maintenance immediately to avoid monthly communications with their previous spouse or anticipated ongoing conflict. This approach does keep parties out of court regardless of future financial changes and ensures the total payment is fulfilled without waiting month-to-month. That means no missed payments and court dates in the future. One large lump sum payment could create immediate problems if there is job loss and the paying spouse does not have adequate assets to provide for him or herself if they are left with minimal assets. There are no tax implications on the transfer for the recipient receiving lump sum payments (unless the asset itself has underlying tax implications in which they often do – A.M. Financial can help you with this complex issue). This approach definitely requires better money management skills for the recipient as the investment risk is transferred to the receiving spouse. For divorcees over the age of 59 1/2, a lump sum pre-tax retirement account can recreate favorable tax treatment of maintenance under the old law. In this situation, assets are essentially tax deductible to the payor and taxable to the recipient, creating more overall funds available to the whole family unit. Conclusion As you can see, there isn’t a one-size-fits-all approach to maintenance and there are many factors to consider. Your choices around the way you structure maintenance have implications to your current financial situation and your financial future. A.M. Financial helps answer questions around maintenance approaches and how different choices lead to different financial management and outcomes. Schedule your free consultation by contacting us and learn more about how we can help.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "3 Maintenance Options & What You Should Consider", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-z5YfvY.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/3-maintenance-options-what-you-should-consider", "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 often feel lonely and confusing. Even if you know others who have been through a divorce, the process has evolved significantly in the last decade, and friends and family don’t always have the most up-to-date advice and insights to offer. That’s one of the reasons many parties are choosing to work with more specialists and advisors in the process than ever before. Choosing the right partners can make all the difference in achieving the outcomes you want in your divorce. One of the important specialists to consider is a Certified Divorce Financial Analyst (CDFA), an advisor who holds one of the most desired and respected global divorce certifications. In this post, we’ll explore the role of a CDFA and how they can help you throughout your divorce. Training & Credentials A Certified Divorce Financial Analyst specializes in divorce finances in similar ways to a financial planner. However, while a financial planner is more of a generalist, a CDFA is trained specifically in divorce financial planning. In July 2020, the CDFA eligibility requirements changed to require a bachelor’s degree with three years of on-the-job experience, or five years of relevant experience if a CDFA does not hold a bachelor’s degree. Relevant experience must be in the fields of: Financial planning Family law Or experience in three or more of the following areas: Tax code Investment advisement or management Real estate, mortgage, or mortgage lending Life or disability insurance Financial therapy or coaching Based on these requirements, CDFA’s have deep experience and understanding of general finance along with specialized training around the financial dynamics of a divorce. Complementing other professionals CFDA’s work alongside attorneys and other important divorce professionals. However, attorneys are not financial professionals and are often not aware of specific intricacies surrounding tax, investment, transfer, and account regulations. Not to mention, you would not want them to bill you at their high rate to help with the financial support that is often needed throughout your divorce. Having a CFDA work alongside your attorney gives you access to specialized support and helps you feel comfortable making pressing financial decisions. A CFDA can serve as an expert in topics that may affect your long-term financial picture. He or she will often complete an analysis and provide recommendations on topics such as: Spousal or child support Dividing marital property/assets Proposing the value and division of retirement and pension funds Property limitations or requirements regarding the division of assets The economics of your divorce Setting financial goals and retirement objectives Divorce tax law, tax consequences, and tax liabilities Financial negotiation strategy Current and future cash flow (budgeting), and overall financial planning Specifically, CFDAs are helpful in divorces that are more financially complex, or those that require more education throughout the process (because one party isn’t as financially savvy or hasn’t been as involved in the finances). Choosing a CFDA Like the process of choosing any divorce professional as a partner in achieving the outcomes you desire, look for a CFDA who has related experience with similar types of clients, first and foremost. That way, they will offer relevant input and insights from firsthand experience. Check his or her qualifications to ensure a CDFA designation in addition to any additional certifications such as a CFPⓇ or ChFCⓇ.. Since many of the financial requirements of a divorce are state-specific, geographic experience is critical. Like any professionals you partner with, ensure you are aligned on preferred communication styles, whether that be weekly meetings, emails, phone calls, or a combination of the above. Referrals from friends, family, and your professional networks are always a good place to start. At A.M. Financial, we are a strong choice to partner with your financial needs with several prominent professional designations as well as over 15 years of experience supporting individuals and families with their financial planning needs of which 6 years working in the area of divorce. We know that each divorce is unique, and therefore we begin with a free consultation to understand your divorce specifics so we can best explain how we can support the outcomes you desire. Contact us to schedule that conversation today.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "What is a Certified Financial Divorce Analyst?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-Onoc1l.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/certified-financial-divorce-analyst-a-m-financial", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "After your divorce is finalized and the various accounts divided and settled, you will be able to update your beneficiaries. Assuming your partner or spouse was previously your primary beneficiary, you’ll need to update all retirement plans to properly pass assets to your heirs. While this sounds simple, it involves more complex laws, regulations, and financial infrastructure than you might anticipate. In this post, we detail what to consider when choosing beneficiaries, important legislation that impacts your decision-making process, and how to create a plan that works best for you and your beneficiaries. SECURE Act of 2018 Before we get into factors you might consider when choosing beneficiaries, it’s important to understand a recent law that impacts your planning: the SECURE Act of 2018. Prior to the SECURE Act of 2018, non-spousal beneficiaries had the ability to withdraw funds from their inherited retirement accounts in any way they chose, as long as a required dollar amount was withdrawn each year. This required amount was known as the required minimum distribution (RMD). The RMD was calculated on an annual basis and took the life expectancy of the beneficiary into consideration. Therefore, the beneficiary had the opportunity to ‘stretch’ withdrawals over their lifetime allowing assets to grow over a long period of time from tax-deferred growth. This essentially increased the overall inheritance while minimizing tax consequences. After the SECURE ACT of 2018 went into effect, regulations for non-spousal beneficiaries changed and became more complex. The new rules require all non-spousal beneficiaries to completely liquidate the inherited retirement account(s) within ten years of the original owner’s death. There is no annual required amount that must be withdrawn; however, the balance of the account(s) must be zero dollars within ten years. Any withdrawal made from a pre-tax retirement account (such as a Traditional IRA) is 100% taxable to the beneficiary. Therefore, withdrawals could potentially bump your beneficiary(s) into a higher tax bracket, significantly increasing the overall tax due on the accounts overall and lessening the total amount inherited. There are some exceptions to the new structure where the old ‘stretch’ law method still applies to: Disabled individuals Chronically ill individuals Individuals who are less than ten years younger than the original account owner. This situation might apply if the beneficiary was a sibling, cousin, or friend. Minor children. Minor children will be able to stretch withdrawals over their lifetime until they reach the age of majority, which is 18 in Colorado. After they reach that age, they will be required to withdraw the remaining funds in ten years. Some trusts. If you currently have a trust with a named beneficiary, speak with your estate attorney to determine if it meets the requirements to ‘stretch’ the withdrawals over your beneficiary’s lifetime. Factors that Influence Beneficiary Planning As you can see, following the SECURE ACT of 2018, account holders are putting more thought and strategy into beneficiary planning due to the complexity of the updated law. Many work closely with financial experts who can help them make decisions on beneficiary planning for their unique situation. As you determine who to choose as your new beneficiary(s) post-divorce, it is critical to consider the following factors: Your relationship to the beneficiary Your age (as the account holder) The age of the beneficiary The type of retirement account (pre-tax or post-tax) The amount of money that will transfer to your beneficiary The financial situation of the beneficiary. While there are families and situations where the change in legal landscape won’t significantly affect the beneficiary’s overall outcome. However, other families and individuals may be impacted by these changes. Some of the most impacted beneficiaries are those who receive enough inheritance that they move into a higher tax bracket and receive increased tax bills. Creative Financial Solutions If you believe your beneficiaries will be fairing well financially at the time of the inheritance and therefore would prefer deferring withdrawals to grow the inheritance, there is a possible solution to ‘stretch’ withdrawals over a non-spousal beneficiaries’ life. With the help of an experienced estate attorney, a trust can be drafted that meets the various IRS requirements. The trust itself can be named the primary beneficiary of the retirement account (instead of the beneficiary outright). When this workaround is in place, the stretch laws can be utilized over the beneficiary’s lifetime, as they were before the SECURE ACT of 2018. Designing your beneficiary plan in this way provides your heirs with significant long-term growth potential and gives you peace of mind that their inheritance won’t have unintended tax consequences. At A.M. Financial, we can help you design a post-divorce beneficiary plan that provides the maximum amount of inheritance to your heirs while minimizing the tax consequences. A Certified Financial Divorce Analyst, Amy Mahlen can provide the guidance you need to choose your beneficiaries and design a plan that works for your family’s unique situation. Contact us to learn more.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Non-Spousal Retirement Beneficiary Planning", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-ptQzyk.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/retirement-beneficiary-planning", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Throughout the divorce process, you’ll likely be busy reviewing everything from financial documents to court filings. You may be consumed with tasks like finding a new place to live or going through various evaluations. It’s easy to lose track of the financial next steps you must take to protect yourself and your financial future during this time. That’s why we created this post-divorce financial to-do list and we hope it helps you organize the necessary tasks you must complete to start this part of your life off on the right financial foot. Close joint accounts and credit cards For financial protection, it is imperative that all joint accounts are closed. If you attempt just to remove your ex-spouse and leave accounts open, you risk potential future mishaps, whether intended or unintended, from a disgruntled ex-spouse. It’s best to close all accounts and credit cards that have previously been joint, and start over. However, before you do so, check your credit score because closing accounts could impact it. Take note of your current credit score, which should not be affected directly by your spouse’s credit history, and work with a financial professional to make a plan to improve it if needed. Getting professional input to improve your credit score is especially important if you need to qualify for a new home or auto loan on your own. Speaking with a mortgage lender who specializes in divorce is also very important before closing accounts if refinancing or a new home purchase is on the horizon. Open new accounts and credit cards Of course, after your close accounts, it’s time to open new ones. Be sure not to use any previous passwords from any old accounts (including passwords from insurance policies, retirement accounts, cell phone plans, email accounts, etc.) to guarantee that your ex-spouse cannot access your accounts. As you open new accounts, it is a great time to begin saving six months of expenses as an emergency fund since you’ll no longer be part of a dual-income household. For financial protection, it is imperative that all joint accounts are closed. If you attempt just to remove your ex-spouse and leave accounts open, you risk potential future mishaps, whether intended or unintended, from a disgruntled ex-spouse. It’s best to close all accounts and credit cards that have previously been joint, and start over. However, before you do so, check your credit score because closing accounts could impact it. Take note of your current credit score, which should not be affected directly by your spouse’s credit history, and work with a financial professional to make a plan to improve it if needed. Getting professional input to improve your credit score is especially important if you need to qualify for a new home or auto loan on your own. Speaking with a mortgage lender who specializes in divorce is also very important before closing accounts if refinancing or a new home purchase is on the horizon. Update information on insurance policies wills, titles, and trusts Of course, after your close accounts, it’s time to open new ones. Be sure not to use any previous passwords from any old accounts (including passwords from insurance policies, retirement accounts, cell phone plans, email accounts, etc.) to guarantee that your ex-spouse cannot access your accounts. As you open new accounts, it is a great time to begin saving six months of expenses as an emergency fund since you’ll no longer be part of a dual-income household. Just like your credit and bank accounts, be sure to update all insurance policies and remove your spouse. This includes home, life, and auto policies. This change might afford you the opportunity to renegotiate costs as you reduce the liability of two people on these policies to just one. As you agree to new policies, it’s also a great time to update assets on your home insurance policy consistent with the division of property. It’s crucial to update beneficiaries on insurance, retirement accounts, or any ‘payable on death’ instructions. This can also be done earlier in the divorce process as proactive protection. You also must update titles on cars and homes aligned with your property settlement. Auto titles can be changed at the DMV and your home can be retitled at the county recorder’s office. Other critical, related tasks include: Choosing a new financial power of attorney Updating wills, estate plans, trusts, etc. Updating medical directives and living wills As you are reviewing insurance policies, it’s important to consider disability insurance since you no longer have dual incomes. Inquire about options with your life insurance policyholder. As a reminder, protect your account logins with new passwords to ensure your ex-spouse cannot access your accounts. Split and update retirement accounts Based on your settlement agreement, ensure new retirement accounts are set up in your name and take time to meet with a financial advisor to reallocate investments according to your age, risk, and retirement goals. We encourage you to find a different advisor than the one you used with your ex-spouse for privacy reasons and to ensure that your financial team is truly aligned with your interests. Once again, don’t forget to update all account credentials to ensure your ex-spouse cannot access your accounts. Review tax withholdings Your tax obligations will likely change post-divorce and now is a perfect time to review your tax situation with a professional. Often adjustments need to be made to minimize taxes owed. This, more than other post-divorce financial to-dos, can be a headache if not addressed sooner then later. Make sure to reevaluate your tax liability, withholdings, and changes to investments so you don’t end up with a surprise tax bill during tax season. Create a budget Taking control of your new financial reality is empowering. Financial concerns and uncertainty can be alleviated by outlining income and obligations in a budget. Knowing what to expect and putting limits on your spending can help you build confidence in your new financial reality. There are dozens of programs out there that make this easy and your financial planner can share more about budgeting strategies based on your unique financial goals. Establish a new financial team Chances are that your ex-spouse had a say in choosing your financial planner and investment strategy. Now is the best time to start fresh with a new financial team that better aligns with your current needs, goals, and who understands the financial complexities of post-divorce issues. Interview a handful of financial advisors to understand their experience working with clients just like you and choose one you can trust with your future financial success. At A.M. Financial, we can help you build a new financial picture and work alongside you to understand your best financial situation, now and in the future. We specialize in post-divorce financial support. Contact us for a free consultation.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Post-Divorce Financial To-Do List", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-GDuPIK.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/post-divorce-financial-to-do-list", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "While divorce is probably a very familiar topic to you, legal separation may not be something you hear about as often, or fully understand. While these two approaches to cutting ties with your spouse are more alike than different, one may better serve your needs depending on the unique dynamics of your marriage. If you are considering a divorce but aren’t completely confident in that decision, there may be reasons to choose a legal separation. In this post, we help you understand the differences so you can make the right decision for your future. What is a legal separation? A legal separation is essentially putting your marriage “on hold” or it could be thought of as a “trial divorce”. Typically, the process is very similar to that of a divorce, as is the cost. Both parties move to different homes and start living separate lives under a legal separation agreement. That agreement also splits finances and assets, including dividing property and/or debt. Any applicable maintenance or child support is agreed upon and you work with attorneys or advisors to create a parenting plan where you agree on an arrangement for raising your children (if applicable). In summary, a legal separation agreement redefines the financial connection you have to your spouse. However, you are still legally married despite having determined your rights and obligations (just like you would in a divorce settlement). Due to this, you cannot remarry and you may still have some financial ties to your spouse, as defined in your separation agreement. Additionally, a legal separation could have an emotional impact on your spouse, providing false hope for reconciliation and dragging out an already painful process. Reasons to consider separation instead of divorce Filing for divorce is not a decision that should be taken lightly for a variety of reasons. Despite a legal separation being so similar to a divorce, you may choose it for important reasons, including: Desire to reconcile the marriage, with financial protection Despite wanting to work things out, if there is a big discrepancy in income or a financially irresponsible spouse (due to factors like excess spending, gambling, refusal to work,, or possible addictions), you can get financial protection during this time through a legal separation. This might slow things down and give you more time to solve some of the issues in your marriage instead of rushing into a divorce for financial reasons. Is a Divorce in Your Future? Get Prepared with These Essential Tips. Uncertainty about your decision to end your marriage Perhaps there has been a lot of back and forth about divorce and uncertainty about the path forward. For one reason or another, you aren’t 100% confident that divorce is the right choice now. Legal separation gives you some flexibility, time, and space to think through your decision more fully with some structure and protection in place around finances, parenting time, and assets. Religious reasons You may have a strong moral belief in marriage and hesitancy to divorce. Your family may disapprove for religious reasons and a legal separation may be a stepping stone you feel is morally more acceptable. Health insurance needs More logistically, you may need to stay married for health insurance coverage. This could be for everyday coverage, or due to a chronic illness or disability that is expensive without good coverage. Sometimes this applies to families with a stay-at-home parent, who might choose separation over divorce due to expensive individual health insurance or an inability to obtain insurance through a work plan. A legal separation could give that non-working parent time to get back on their feet and find work with health insurance coverage. Tax advantages There are undoubtedly financial benefits to filing taxes jointly, although filing “married filing separately” is also an option. Depending on the time of year and the tax implications of your divorce, legal separation may be advantageous to the overall family for one or more years. Various situations, such as a large disparity of taxable income or student loan debts, can also create dynamics in which it is more advantageous to file separately and should be reviewed with your tax advisor. When financial trust issues are present, filing separate returns can offer significant financial protections and should be discussed with your various financial and legal professionals. Timing is bad Maybe the holidays are just around the corner, or the kids are almost grown up and off to college. Perhaps you plan to sell a joint business in the near future, or the housing market is down and you wouldn’t get a fair price for your house. Or, perhaps you need time to rebuild credit scores to qualify for a home on your own or you are one year shy of meeting the ten year requirement to qualify for spousal social security benefits. Timing is everything and sometimes a legal separation buys you time to sort through significant financial (or emotional) events in your life before deciding on or moving forward with an official divorce. Making a future divorce easier Lastly, because a legal separation defines three areas of divorce; financial support, division of assets and a parenting plan (if children are involved), you can finalize your divorce based on a separation agreement without additional litigation or mediation. In Colorado, there is one form to file to convert a legal separation to a divorce after a couple has been legally separated for six months. Understanding the way legal separation varies from divorce empowers you to choose the path that is right for you and your family. We can help with the financial considerations of this decision based on your unique situation. Not only can we advise you on the financial impact of divorce and legal separation now, we can help you plan for the future. Contact us for a free consultation today.", "author" : { "@type" : "Person", "name" : "Amy Mahlen", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/amy-mahlen" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Legal Separation vs. Divorce: What's Right for Me?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/qtq80-TKNLfr.jpeg", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/legal-separation-vs-divorce", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet. Current values of assets are listed along with outstanding debt balances that are deemed to be marital. Typically, above all else, the focus and end goal is to split property 50-50. With so much emphasis on this spreadsheet that dictates the remainder of your financial future, is there anything missing that could dramatically skew the end results? Ignoring the financial components of a divorce settlement and the effect on your future is similar to playing slot machines in Vegas – hope to win, but there is a chance you will leave with a lot less than you came with and anticipated losing. In the first part of this series, retirement account valuation blunders were addressed when utilizing a 50-50 division approach. Here, we will examine non-retirement investments and what factors can alter the outcome down the road. Home equity and rental property will be outlined in upcoming posts. Part 2: Non-Retirement Investments Investments outside of the retirement category vary widely from checking accounts, certificates of deposits (CD), brokerage or mutual fund accounts, land, rental property, commodities such as gold, fine art, antique car collections, business ownership, etc. Are they all created equal? Or are they apples and oranges? Each asset previously listed is unique. The growth potential and place in an overall investment strategy differs drastically. Although these investments are not tax sheltered like retirement accounts, they are still subject to taxes in a different manner. When utilizing a 50-50 division of property approach during settlement, is awarding a $100,000 CD to Anna and $100,000 worth of Amazon stock to John realistic to rely upon for post-divorce results? Shortly after finalization, John sold the Amazon stock and used the proceeds to purchase a new home. The following April, he had an additional $12,000 tax bill because the stock was purchased 10 years prior for $20,000, so he realized a $80,000 capital gain that created a $12,000 tax bill. Anna was able to use her $100,000 for tuition to go back to school and help her parents with medical expenses over the following two years while only incurring $100 in additional taxes – a big difference! However, if Anna and John didn’t have current cash needs the end results would look very different in 10 years. Anna was never involved with the finances and making those types decisions made her nervous. During the next 10 years she left the $100,000 in a CD that ended up being worth $101,004 (based on today’s interest rates). John had a brother who worked at Amazon who encouraged John to keep the Amazon stock. Without purchasing additional Amazon stock, after 10 years it was worth nearly $260,000 because it grew an average 10% per year – more than a 150% difference! Conclusion The financial results that individuals experience post-divorce can be significantly distorted when a 50-50 division of property concept is solely relied upon. It is critical to understand financial components, your priorities and how suggested division plans affect your bottom line in the future. Financial education and professional analysis before signing the final papers is more important than ever to build a strong foundation for the next chapter in life. Let’s build a property division strategy that works best for you and your future! You wouldn’t retire without a financial plan… it might be messy! Don’t divorce without one either! Get the information you need to get started here, or Click here to schedule a free initial consultation with Amy", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Property Division Values, Part 2: Non-Retirement Assets", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/e261dd_d28e6554adb0418a812e7205893dd778~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/property-division-values-part-2-non-retirement-assets", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ``` ```json { "@context" : "http://schema.org", "@type" : "BlogPosting", "articleBody" : "Currently, alimony is on the chopping block under the Tax Cuts and Jobs Act (TJCA), meaning there would be no deduction provided for the paying spouse and the receiving spouse would no longer have to claim payments as income for divorces finalized after 2017. Important topic to be discussing legal counsel, mediator and certainly your financial planner to ensure your long-term strategy. Amy can help review these changes with you to determine your best long-term financial solution if the bill passes as is! Contact us today or schedule a free initial consultation to review your situation.", "author" : { "@type" : "Person", "name" : "max.melomed@gmail.com", "sameAs" : "", "url" : "https://amf-divorce.com/our-blog/author/max-melomedgmail-com" }, "dateModified" : "01/06/2022", "datePublished" : "01/06/2022", "headline" : "Will Spousal Support (Alimony) Continue to Be Tax Deductible in 2018?", "image" : { "@type" : "ImageObject", "height" : 400, "url" : "https://cdn2.hubspot.net/hubfs/39875594/Imported_Blog_Media/e261dd_f92f6ff96f324246b327a9ddfd0829a7~mv2.webp", "width" : 750 }, "mainEntityOfPage" : "https://amf-divorce.com/our-blog/will-spousal-support-alimony-continue-to-be-tax-deductible-in-2018", "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "" }, "name" : "A.M. Financial", "url" : "amf-divorce.com" } } ```