Divorce, for most couples, is an unexpected event as a whole. Couples need to be prepared for unexpected financial changes and challenges they will face as divorce is the breakup of not only a family unit but the breakup of an economic unit as well. Each spouse needs to look at their finances from both quantitative and qualitative viewpoints to understand what’s important to them. In other words, divorcing couples need to take into account everything from balancing a new budget to maintaining a certain quality of life. Knowing this information will allow them to better assess how they can move forward on their own.
Here’s a short list of financial questions divorcing couples should consider:
•Do they have a “divorce” budget? How will they pay for the professionals they may need to work with?
•Have they thought about how bills /expenses will be paid until a final agreement is reached?
•What will it cost to maintain two households rather than one?
•Have they considered renting rather than purchasing another home?
•Have they reviewed all of their children’s activities and prioritized what they can do and what they can afford?
•Will the stay-at-home spouse need to consider going to work full-time or part-time?
•If there is a business, does the business need to be sold?
•Is there existing debt (mortgage, lines of credit)? Have they thought about how this debt will be managed? Will they need to take on additional debt to fund future payouts?
•How much will the divorce affect retirement plans?
When working with a collaborative team that includes a financial neutral during your divorce, questions like these ones are often raised and then answered. This allows couples to make informed decisions about their financial plans and futures.
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Major banks in Canada recently announced a reduction to their fixed rate mortgages. It seems bank executives are more confident about the housing market and the likelihood of a major correction in housing prices.
This should provide good news for people who are separating and making decisions of how they split their assets, in particular, the matrimonial home. For many, keeping the house is important for couples with children and keeping a stable environment for them. For older couples, whether they choose to buy a partner out and remain in the matrimonial home or sell and each purchase a new home, lower interest rates allow for more flexibility when it comes to possible settlement options.
Managing two households costs more than maintaining one household. With late in life divorce, retirement plans are greatly affected by housing costs.
Many people finance equalization payments owing to spouses through refinancing existing mortgages, so lower mortgage rates in those situation helps.
If selling the matrimonial home is part of a settlement plan, lower mortgage rates make home buying more attractive. If keeping the matrimonial home is an option, managing cash flow is easier with lower monthly mortgage payments.
The home you want to keep or the home you want to buy after divorce may
now be a real possibility.
Posted in After Divorce, Budgets, Collaborative Practice, Divorce, Finances, Grey Divorce, Housing | Tagged collaborative divorce, Collaborative practice, debt, division of assets, divorce finances, money and divorce, real estate, Sell home, selling house and divorce, separation | Leave a Comment »
Our book “When Harry Left Sally or Sally left Harry – FInding your way through Grey Divorce” has be published. It will be available for sale at http://www.whenharryleftsally.ca early January 2014 . You’ll be able to find the EBOOK version on AMAZON, ITUNES and KOBO.
The book provides insights on what to expect of a “Grey Divorce” or divorce that occurs late in life. We have taken our real life experiences and give couples splitting up an idea of the financial and personal situations that await them. The books sets out to reassure and advise older couples going through divorce.
I’ll post the official launch details shortly.
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Announcing the upcoming publication of our book “ When Harry Left Sally – Finding your way through Grey Divorce” . It will be available in a couple of weeks. I’ll keep you updated to let you know when it will be available to order from online retailers and dedicated website for “When Harry Left Sally”.
Co-authored by Marion Korn, a well known senior family lawyer and mediator, and Eva Sachs, a skilled Financial Planner, specializing in divorce, the book shines a light on the growing numbers of grey divorcees and their unique concerns and goals. Through stories collected in their years of practice together, Marion and Eva challenge the reader to change the way they approach their divorce. This book is the roadmap every divorcing grey couple needs.
Here’s a preview look!
Posted in Collaborative Practice, Divorce, Finances, Grey Divorce, Mediation, Preparing for Separation, Uncategorized | Leave a Comment »
According to a recent AVVO divorce study, couples are most concerned about the costs of divorce. People today have more choice in how they will proceed with their divorce..from doing it themselves , mediation, collaborative practice, lawyer negotiations to court. The survey indicated that a majority of people (58%) site the cost of divorce as a major factor/concern in moving forward with the divorce. When reviewing what approach may work best for a family, making the right choice in terms of professional fit , control, timing are all things that need to be considered. However, the reality of the total expense for the family appears to be a big part of the decision.
It’s important to establish from the beginning some sort of “divorce budget”and understanding the value proposition of any process you ultimately choose. Being quoted the hourly rate or first retainer is not enough information. Getting the answer .. “it depends” to the question “How much will this cost” may not be good enough anymore. Understanding that other professionals are part of a divorce team and learning what they all do in the process, what they charge, what their involvement may be , and what couples can do on their own, helps in understanding what the ultimate costs may be .
Posted in Budgeting, Budgets, Collaborative Practice, Divorce, Finances, Preparing for Separation, Uncategorized | Leave a Comment »
There was a recent article in the GLOBE AND MAIL about rising costs of household expenses. You may be surprised with some of the findings.
Do you know that food purchased from stores spending was down 1.8% but food purchased from restaurants was up 3.6% from a year ago? Landline telephone services were down almost 6% while cellphone pager and text messaging services were up over 10%. Clothing and accessories were down almost 3%.. is that a result of more competitive pricing with US retailers coming to Canada?
The largest increase was surprisingly in pet expenses … may not reflective in higher food prices but rather additional health care bills as people to improve and extend the life of their dear pets.
This is all good information. It’s really important information to have if you are facing divorce and need to see how you’ll manage once you’re on your own.
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As a followup to my previous blog today take a look at this article from the BBC and UK about the rising costs of divorce. It quotes a report by the Legal Ombudsman for England and Wales showed complaints by clients in divorce and family law were higher than in any other category.
Have you gone through divorce recently? What do you think of the costs involved? At the end of it all, did you get value for what you paid for?
Posted in Budgeting, Divorce, Finances | Tagged costs of divorce, divorce, Family law, financial costs in divorce, separation process | 2 Comments »