10 Ways Long Term Separations Can Hurt Wives Financially

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10 Ways Long Term Separations Can Hurt Wives Financially

Long term separations can put you in a kind of limbo. For whatever reason either both parties are loath to say goodbye to the marriage but can’t seem to work out their differences or the financial and emotional burden of a divorce is too much for either party to handle right now. Whatever the reason if you find yourself in this kind of situation you aren’t alone. Long-term separations exist for many would-be couples right now. This phenomenon increased significantly during the Great Recession as parties who wanted to divorce were averse to doing so due to financial difficulty or even unemployment on the part of one or both parties. Some people take a weekend away after a heated argument or a few months away to get some distance and gain some perspective on a marriage. But these are considered short term separations. These can last a year, two years or more.  In the short term it can make a lot of sense in that you two are incompatible but by living your separate lives without officially divorcing you avoid the heart ache, the venom that might arise, and the draining emotional toll that a divorce can have on you, and your soon-to-be former spouse. Every decision however has a positive and negative side. The positive you have missed is called an opportunity cost in economics. In this situation waiting too long could have an adverse effect on your pocketbook.  How exactly you might ask? Here are 10 ways long term separations can hurt wives financially.

Number one, you can’t give any input as to how your assets are being allocated by your husband. How is your husband currently managing the finances? Certainly when a divorce settlement occurs you want to be able to receive that which you are entitled. But when living apart you don’t know how your husband is saving, or spending, racking up debt or taking good care of the bills, managing investments, making them, or selling them off. In a Community Property state if your husband is acquiring more debt you in turn are also acquiring it. Check into what kind of state you live in. if it is an Equitable Distribution state the only time you have to worry about this phenomenon is with joint credit cards or any other joint debt. Find out which type of state you are in. Second, your husband may use this time to hide financial assets so they don’t become a part of some future divorce settlement. Third, if your husband loses his job or his financial situation does a 180 your settlement may decrease significantly from what you may have originally acquired. Besides becoming unemployed he may be injured and go on disability. Perhaps he got into legal trouble and so there goes your savings. Fourth, your husband could move to another state, or even another country. Laws from one state to another and one country to another in regard to divorce vary radically, particularly when it comes to alimony. It usually only takes six months to a year to establish residency somewhere else. Moving to another country could make things far worse for your lawyer, complicating things further.

Fifth, the laws governing alimony could change in the state in which you live. Look into your own state law and any bills coming up mentioning alimony reform, for these have been changing the state of alimony and for the most part negatively impact the former wife in a financial sense. Sixth, your future former husband could meet someone. He may use those assets such as your joint savings to buy his new girlfriend lavish gifts, take her on vacations, to fancy restaurants and so on. He may even support her. Seventh, you may have to diminish your living standards during a long separation. Legally, you may have trouble acquiring alimony at the lifestyle which you were previously accustomed to. If you are receiving far less now to live on your soon-to-be ex could say that you don’t need that much since you’ve been living on such a prolonged period on a far more meager income. Eighth, if your husband runs into financial trouble of the legal kind, you could be on the hook for it too. Though you may feel completely different about him since the time you both said, “I do” in the eyes of the law you are still husband and wife. If your husband cheats on his taxes, is sued, or does some other kind of financial shenanigans those assets, though you feel entitled to your fair share, may go to pay legal bills, fines and more. Ninth, without a separation agreement if you depend on your husband to support you, there’s no legal protection against him cutting you off. Number ten, staying separated long term and floating in that limbo makes it hard to move on with the rest of your life. For more pick up a copy of, On Your Own Again: The Down-to-Earth Guide to Getting Through a Divorce or Separation and Getting on with Your Life by Keith Anderson and Roy Macskimming.

Managing the Cost of Divorce

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Managing the Cost of Divorce

A wedding is one of the most expensive events in your life, but a divorce is a close runner up. According to CNNMoney a typical wedding costs around $30,000. The Huffington Post reports that the average divorce costs between $15,000 and $20,000. Of course your wedding may not have cost that much and your divorce may not either. But these kinds of figures will stop your heart if you have to endure them. There are lots of things to pay for; legal bills, court fees, and if you need a forensic accountant or a private investigator your fees could skyrocket. It can be very easy to rack up the bills, particularly if your thoughts are clouded by revenge. Instead of an all-out war that may leave both of you financially barren, why not take a sensible approach, managing the divorce to cut the cost and give you both the chance at a brighter future? One of the most costly things is when a lawyer is used not to make sure that assets are split adequately but to get revenge. Chair of the family law practice at the law firm Brach Eichler, Carl Soranno says, “They go in with the feeling of revenge. Their lawyer is their champion. They love putting together 50-page certifications of all the bad things their spouse did — until about six months in, when you’ve spent your 401(k) or your child’s college fund.” Remember that divorce isn’t about the past, it’s about the future. Don’t sink $3,000 on legal fees fighting over who will buy your kids $200 jacket. If you can’t seem to put your emotions aside, see a therapist. It will be less expensive and healthier for you and your future.

If you are going to get a divorce, don’t go in blind. Do some research. Realize that divorce laws can vary from state to state, so find out what you can about your state’s divorce laws. This way when you need to hire a professional you know what you are talking about and won’t waste time. If you can, why not share pertinent information with your soon-to-be ex-spouse? Saving time is saving money. What’s more, lawyers usually charge by the hour, even with phone calls. Getting right to the point is important. So the more you know the less it should cost you. This doesn’t just mean in the legal sense. Get educated on financial matters as well. Really, divorce is a numbers game, particularly about finances. Do some research online. Look for some free courses. Talk to a financial planner. There are even financial planners out there today who handle divorce, called divorced financial analysts. Make sure they are certified with a good reputation. These planners can help you get a sense of what the assets are, how the negotiations should go, they can generate income and expense reports, and sort out matters to do with wills, insurance, taxes, credit and so on. One of the most time-consuming processes of a divorce is paperwork. You will have to gather it all together. Your attorney should know what you need. Talk to the financial planner as they will have advice on the subject. too. Bring all the documents you need when you have a meeting with your lawyer so as not to waste time and to save money. It makes your lawyer’s job easier and more efficient, too.

Look at your divorce as asset management. If you want $10,000 out of your joint investment but it’s going to take a year and $8,000 for you to get it, is it really worth it? Write down a list of what you really want, from your 401K to real estate, and sort it out with the financial planner and/or lawyer. Be as efficient with your lawyer as possible. Don’t think that your divorce will be different. Of course it might be. But it’s better to keep all your ducks in a row and be as organized and efficient as possible. To learn how to save yourself all kinds of hassles throughout the course of your love life, read The New Love Deal: Everything You Must Know Before Marrying, Moving In, or Moving On! by Michele Lowrance.

What to do if you think your Spouse has Hidden Assets

Hidden-Assets

There was a woman in California who won $1.8 million in the lottery. She filed for divorce from her husband of 25 years and failed to disclose her windfall. But the husband found out about it and the judge granted him all of her lottery winnings.   Failing to disclose all of your assets during the divorce proceedings in a no-no and you may end up with a far worse judgment than you would have if you were honest. That said, what do you do if you think your spouse has hidden assets that weren’t brought up during the divorce proceedings? One thing you can do is hire a forensic accountant to investigate. You can find them online via a Google search, or even in the phone book. Your divorce attorney or accountant may also be able to recommend one as well. These are special accountants who know how to search for hidden assets. But what if you don’t have the financial wherewithal to hire someone like that? During the discovery process, your divorce attorney can do a lot of things to have these assets discovered. If you can’t count on your ex you certainly can’t rely on their financial affidavit. Your attorney should review the following documents carefully: pay stubs, bank statements,   tax returns, cancelled checks, credit card statements, brokerage statements and any other financial statements.  Each document should be scrutinized carefully to extract the proper information.

Here are some things you can do to make sure you have the best chance of bringing all of your ex-spouse’s assets to light. First, take a good look at the tax return, the 1099 and the brokerage accounts. Has all interest and dividends been disclosed? Next, run a public records search on your ex’s name. Do they own any property that perhaps wasn’t brought up? Now it’s time to look at your former spouse’s pay stubs and other documents. Take a good look at the bank statements. Is all the income accounted for? Does all income have a record of deposit? For example, if your ex makes $10,000 per month but there is only a record of $3,000 being deposited per month, where has the other $7,000 gone? Now it’s time to look at any cancelled checks. Check out the bills which they pay. Look at mortgage or rent payments, credit card payments, auto loans, utilities and others. Are there any bills being paid from a different account than that which you have knowledge of? If you believe the funds for these bills are coming out of a separate bank account of which you have no knowledge, your previous spouse may be hiding assets. Next, have your attorney subpoena your spouse’s employer to request to find out what kinds of benefits your ex has such as stock options, a 401K or some other retirement plan or a deferred compensation plan. These should also be included during the disclosure of finances phase. If they haven’t, let your attorney know and he or she should make sure that it is included.

Check out the monthly income disclosed. Now take a look at the family expenses and add them up. If the income is lower than the expenses, consider whether you and your ex-spouse were dipping into savings or some other area in order to make ends meet. If not, there is likely financial assets that aren’t being disclosed. Look carefully at the account statements. Look for transfers or withdrawals that don’t seem to end up anywhere else. Your attorney may need to subpoena back documentation to see where and in whose account the money ended up. Look over canceled checks, wire transfers, credit card statements, purchases of significant items such as works of art, jewelry, antiques and so on which may not have been disclosed. Look for cancelled checks, wire transfers, or payments on credit card statements that go to insurance or property taxes on a property other than your own home. This can indicate undisclosed real estate. If you discover any of these inconsistencies it may now be time to depose your ex-spouse. They can’t lie under oath or they will face sanctions. Now you can ask about bills being paid out of secret accounts, property taxes being paid on real estate you didn’t know about or whatever you had discovered. Divorce can be a very painful, high anxiety affair. But it pays to keep your head about you and protect yourself. The outcome of the divorce proceedings can affect your life for years to come. So it’s important that you and your attorney have access to all the information you need in order to safeguard the best outcome possible. For more on this topic, read Forensic Accounting for Divorce Engagements: A Practical Guide, Third Edition by Donald A. Glenn and Ezra Huber.

The Most Expensive Divorce in History

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A court in Switzerland has just handed down the most expensive divorce settlement in history. Russian Oligarch Dmitry Rybolovlev was ordered to pay his ex-wife over $4.5 billion. Both the oligarch and his ex-wife received papers from the Geneva Tribunal of First Instance stating that the owner of AS Monaco, a popular French soccer club, must hand over the equivalent of $4,509,375,184.80 or 4,020,555,987.80 Swiss francs to ex-spouse Elena Rybolovleva who currently resides in Geneva. Both are age 47.  That isn’t all. The court also granted the ex-wife property. First, two luxurious chalets located in Gstaad, Switzerland worth $146 million or 130.5 million francs. Another piece of property was located in the tony Cologny district of Geneva. The couple had lived there with their daughter, now 13. They also have another adult daughter by the name of Ekaterina. Marc Bonnant, the ex-wife’s lawyer, called the ruling “the most expensive divorce in history,” certainly the biggest settlement the world over ever in history.  Tetiana Bersheda, Rybolovleva’s lawyer, said that the price tag is likely to be brought down in appeals that she is expected to file. Bersheda said in a statement, “There will definitely be a new appellate review and therefore this judgment is not final given the existence of two levels of appeal in Switzerland.”

Rybolovlev is known as the “fertilizer king” and was once the 79th richest person in the world. According to the Forbes Billionaires List he now ranks at 147th. His fortune is thought to be worth $8.8 billion. He made his money in potash mining. The husband and wife met where many couples do, in university, in the city of Perm, Russia. They fell in love and married in 1987. Divorce papers were filed in 2008 when Forbes said the oligarch was worth $12.8 billion. Rybolovlev’s assets were initially frozen in Switzerland and abroad by the court. Rybolovleva now lives in Cyprus. His frozen assets may hurt her as well, as there stands no legal aid treaty between Cyprus and Switzerland. The oligarch and his adult daughter currently hold some of the most expensive real estate in the U.S. including a mansion in Palm Beach, Florida and an apartment at Central Park West in Manhattan. Certainly divorces are expensive nowadays, but nothing to this extent for most people. Still, at around four billion dollars left, certainly Rybolovlev won’t be in the poor house for long. Even though billionaires seem to have lives so far away from our own and even though divorce is a terrible thing for anyone to go through, it feels good to know at least that those at the very top of the world still have a lot of the same problems that ordinary people do. Of course, losing your shirt in a divorce may be more devastating than half a fortune that still keeps you in league with other billionaires. Most people who get divorced often struggle financially afterward because of it. Still, having to hand over that much, if in fact that’s what will happen, has got to hurt. To learn more about the financial aspect of divorce, read Divorce & Money: How to Make the Best Financial Decisions During Divorce by Attorney Violet Woodhouse, CFP and Dale Fetherling.

Should you have a Prenuptial Agreement?

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A prenuptial agreement is a legal document signed by both parties previous to them getting married. In that states what assets they came to the marriage with and what will go to which partner should they end up divorced at some point in their future. Since the division of assets is one of the most contentious points in a divorce, a prenuptial agreement, or prenup as it is called is meant to act as a modicum of protection. Some people feel they are necessary in a social climate where 50% of marriages end up in divorce. Others believe that it is setting a wedding off on a negative tone. It may plant the seed that the marriage is doomed to fail, instead of encouraging the couple to work on the marriage and get through difficult situations, so say detractors. If you are planning to get married, should you have a prenuptial agreement? And how do you know if it is right for you? Remember that both parties have to sign the document for a prenup to go into effect (wikihow.com). So discuss the pros and cons with your partner and see if it is right for both of you.

Often when one member of a couple has a significant income or net worth, they want to protect it. If that person has children from a previous marriage, or others involved who stand to gain or lose out due to a contested divorce, a prenup may put those others at ease and help them to accept the marriage. How do you two interact with one another? Is this a marriage of deep love and commitment or one of convenience? Is this a trophy wife or husband or a partner whom you plan to spend the rest of your life with? These issues should be considered carefully. Even when the relationship is solid, many people get a prenup just in case. There is no shame in doing this. But you need to talk with your future partner to see how they feel. Do some soul searching, too. Research prenups online. If you are ready or want to find out more, do some research on attorneys in your area who handle prenuptial agreements and make an appointment. Make sure the attorney you choose is respectable and has a good reputation. Many times attorneys will give you one free session. See if you can come with your spouse-to-be and get all of your questions answered before deciding to move ahead. If you decide a prenuptial agreement is for you, stick with your decision. Don’t back out of it.