A Personal Finance Coach’s Suggestions for Financial Healing After Divorce

A personal finance coach points out that getting your finances under control after your divorce is part of starting over. Getting this show on the road can ease stress and impose structure.

This personal finance coach suggests three different measures to achieve this:

  1. achieve financial independence of your ex

  2. develop financial boundaries that are healthy

  3. dream your new life

The first measure requires creating a budget based upon your income and your expenses.

The second measure involves disentangling financially from your spouse. For example, eliminate joint obligations.

The third measure is to hatch your new dreams: financial, travel, adventure, spiritual, creative, physical, material, character, relationship, intellectual and legacy. At least a couple should be reachable within a couple of years.

Read more in this Durango [CO] Herald article: After a divorce, recover your financial health.

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April is Child Abuse Awareness Month

Across the nation this April, communities are promoting events to raise awareness of Child Abuse during Child Abuse Awareness Month.

Awareness is the first step toward prevention.

Child abuse is a community problem and the entire community must be involved in solving it.

Keeping children enrolled in programs and activities tends to insulate them from, and reduce the chances of them straying into, harm’s way.

But studies in Australia correlate child abuse with substance abuse by their parents and mental illness afflicting their parents, as well as other domestic abuse in the family

Read more in this [Beckley, WV] Register-Herald article: ‘Child Abuse Awareness Month’ proclaimed and this Australian article: Child abuse ‘linked to parental issues’

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Uncontested Annulment … Not So Fast

This blog generally bypasses the celebrity divorce wars for a variety of reasons. But, occasionally, celebrity breakups spotlight significant legal issues worth making an exception for.

One such drama focuses on a celebrity marriage that hit the skids after only seventy-two days (or just over two months). Not a record but, any way you slice it, a pretty short marriage.

And because of the short duration of the marriage, the couple would prefer an annulment to a divorce. Totally understandable.

But doable? That’s a different story.

Annulment laws vary from state to state. Further, annulment laws may actually be more arcane and idiosyncratic than divorce laws.

Most people equate annulment with brevity of a marriage. And they often do correlate highly.

But, at least in some states, mere brevity of a marriage is far from the only requirement to qualify for annulment rather than divorce.

Ironically, even in “no fault divorce” states such as Florida, annulment must have grounds – and they generally entail fault.

In some states, like Florida, depending upon the nature of the grounds relied upon, on the legal path toward annulment, a marriage may be classified as void or voidable – and the criteria to qualify for annulment vary depending upon whether the marriage is void or voidable.

In some states, like Florida, having consummated the marriage will generally operate to bar an annulment.

Now, the media is widely reporting that both of the celebrity couple are on the same page as far as wanting an annulment.

With each wanting the other to admit to having committed a certain fraud that they have in mind. Not surprisingly, each denies having themself committed a fraud .

The hoopla implies that annulment is attainable once the couple decide which of them will admit to the specific alleged frauds that are on the table in their negotiations.

Perhaps that is so under the state law that will apply, and given their celebrity status. But, in many states, the couple’s agreement is not necessarily enough.

While fraud may well be a basis upon which to obtain an annulment, the nature and quality of the fraud also factors into the mix. This can impact whether the marriage is merely voidable or void and whether consummation operates as a bar to annulment.

Bottom line being, don’t be misled by the celebrity breakup drama. In many states, in the vast majority of cases, qualifying for annulment is no easy matter – even where the couple are in total agreement.

Read more in this New York Post article: Both Kim and Kris willing to annul marriage — if other admits fraud: report and this Yahoo news article: Kim Kardashian and Kris Humphries ‘in deadlock over annulment’.

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Understanding the Fight Over the Family Business in Divorce

Husband and Wife start a business. (Or, Husband starts a business during the marriage. Or Wife starts a business during the marriage.)

Over time, the business becomes the couple’s primary (or sole) income.

Husband and Wife separate and plan to divorce. Now, what about the business?

Depending on the dynamics, there may be more than one issue here.

The first potential issue is: going forward, who will operate and own the business. In many cases, where only one spouse actually ran the business in the first place, this issue is likely easily dealt with.

In others, where both spouses actually worked side-by-side in the business, this issue may be hotly contested. The outcome may turn upon what each spouse contributed functionally to the business and who will be most able to continue the business independently of the other spouse.

But alternative outcomes are possible, generally for reasons related to the second issue.

The second issue is how to compensate the spouse who will no longer be involved in the business, that is, valuation of the business for purposes of establishing a buyout value.

Large publicly traded companies are actually far easier to value than very small closely held companies. There are more variables that may more profoundly impact the valuation.

There are more than a few ways to go about valuing a business. Each has its strengths and weaknesses. Oftentimes, the result of several different approaches is considered in arriving at THE ultimate valuation.

The most accurate and reliable valuation is what a bona fide arms-length third party would pay for the business. And, if the parties cannot agree or put forth a compelling appraisal, the ultimate outcome may require exactly such a sale.

That is precisely the scenario under which various items of marital property are sold to third parties in some divorce cases and the proceeds divided between the spouses.

But ready, willing and able buyers generally only come forward for property that has a relatively readily ascertainable value.

Unfortunately, though, the reality is that small businesses often have far less value to a newcomer unacquainted with the particulars of the business than to the person or persons who conceived of it and built it from the ground up and know all of its ins and outs.

For all of the above reasons, business valuations can be complex and expensive and, ultimately, elusive. But if the parties cannot agree on a buyout value for the business, a professionally prepared business valuation may be the only way for the court to determine the business’ value.

In light of the expense involved, another option to consider may be an alimony arrangement as an alternative to division of the business. Or better yet, a combination of the two.

But, when considering such alternatives, it is critical to be aware that business performance can change over time (for the better or for the worse) due to changes in the market, the economy and even the change in operators. And the spouse accepting an alternative payout over time may ultimately receive less than they were entitled to.

Read more in this eCommerceBytes article: Four Things Online Sellers Should Know About Business Appraisals.

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No, No Fault Divorce Does Not Necessarily Mean Uncontested Divorce; Not Even Close

With 2010 legislation, New York State, the last holdout, joined the ranks of states allowing for streamlined uncontested divorces (that is, not requiring the spouses to live separately for a full year under the terms of a formal separation agreement).

Part of the landmark legislation provides a rigid statutory framework for calculating temporary alimony for a needy spouse, rather than relegating the figure largely to judicial discretion.

Only, as the law gets applied in New York’s family courts, the framework reportedly leads, not infrequently, to unreasonable results, more litigation than ever, and confusion all around.

As in this case. Investment banker Husband is divorcing his guidance counselor Wife.

Wife earns $103,000 per year. Husband nets $12,775 per month.

Based on the first pass through the rigid statutory framework, the divorce court judge orders Husband to pay Wife combined temporary child support and temporary spousal support of … $17,000 per month.

That’s right … $4,000 per month more than Husband’s net monthly pay.

An impossible situation, turned still more impossible when Husband is laid off from his Wall Street job.

Husband seeks modification of his temporary alimony and spousal support as well as his temporary child support. And is, quite incidentally, elevated to the status of symbol of all that is wrong with the new New York statutory framework for calculating temporary alimony and spousal support.

Well, the family court judge reconsiders his previous ruling and makes a huge adjustment … despite the statutory framework, based on “economic reality”, of all things.

Under the family court’s modified ruling, Husband’s temporary alimony is dramatically cut in half, and the tax burden on the temporary alimony is shifted to Wife (which is the norm). Also, Husband’s child support is reduced by about one-fifth.

And, as if those changes were not broad enough, the divorce court also orders that all household expenses of the marital residence are shifted entirely to Wife, rather than shared.

A great outcome for Husband. Not so much for Wife.

From one extreme to the other? Perhaps.

Now Wife plans to appeal.

Which may lead to New York state’s appellate courts better interpreting and clarifying the recent legislation, perhaps to ultimate good effect in New York’s family courts.

Then again, the legislation may be facing something of an overhaul based upon case law accounts from the trenches.

Read more in this Wall Street Journal article: Divorce Ruling Revised.

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Prenuptial Agreements Deserve the Serious Consideration of Every Engaged Couple

Romantic or not, the reality of the divorce rate makes it irresponsible not to at least consider and discuss a prenuptial agreement (prenup), or antenuptial agreement, with your fiance.

The ensuing dialogue will undoubtedly be highly educational on many levels. Which may actually strengthen your relationship. Or at least ensure that you enter the marriage with your eyes wide open.

Having a prenuptial agreement vastly improves the odds that each spouse ends up with what they expected in the event of a divorce … or the death of the other spouse. (Yes, a prenup may come into play in that scenario also.)

A prenuptial agreement can also save a great deal of money – and animosity – litigating a contentious divorce.

Another benefit of a prenup is that the conversation and decisions made in a prenuptial agreement may exert sound influence over various lifestyle decisions during the marriage. For example, whether to start that business after all or whether to drop out of the work force to raise the kids.

Once you’ve made the joint decision that you want a prenup before your wedding, don’t delay.

Not executing the prenuptial agreement until the last minute only subjects the antenuptial agreement to greater risk of being set aside. Defeating the entire purpose of bothering to have a prenuptial agreement.

Read more in this US News & World Report article by way of Yahoo: Why Almost Everyone Needs a Prenup.

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