Those in the Divorce business will tell you that they experience an uptick in January. No couple wants to disrupt their family’s holiday, so they push the Divorce off until January. They know that it will be emotional and disruptive, even as they try to minimize the effect on their families.
Here are some thoughts on money matters while preparing for your Divorce
The economic realities
The process of itemizing your property and getting an idea of what will be left after you split it up is routine practice in all 50 states. Some people actually decide to reconcile once they see their financial landscape divided in half. Others use this as a reality check and move forward.
Know that your financial circumstances may change
Certified financial planner Lauren Klein has seen clients make poor decisions such as using retirement funds to help them keep the family home, only to see the house lose value and become an enormous financial burden. Many others overcommit in order to keep the home. They end up with a mortgage that could choke a horse, in a neighborhood that’s beyond their means, with a lavish landscape and gardener. They’d be much better off selling that home, taking the money and buying a smaller home in a modest neighborhood that they can afford.
Waiting too long to separate finances
Do not wait to split joint bank and any other accounts that you share. Change your login information and whatever else you need to do to separate your financial lives. Check your credit report periodically to make sure there aren’t any surprises. Remember that your ex has your social security number and knows your mother’s maiden name. One of my colleagues’ divorced husband died and she inherited nearly $750K of his debt—all of it from accounts that he had not canceled or transferred into his name.
Avoid big ticket, emotional buying
Don’t make any major financial decisions until the divorce is final. Most families deal with varying degrees of financial adjustment as they figure out how to support two households rather than just one. Avoid impulsive purchases until the dust settles.
Do not try to hide money or assets
If you try hiding money or assets to keep them out of the “marital estate,” the risks are serious penalties and possible jail time. Bad idea. This is not worth the risk.
Think about your career and making more money. You’re going to need it
If you’re currently not working, try to get a job, especially one with health insurance. If you are working, look for ways to advance in your career or increase your income because a divorcing individual will likely need a 30% increase in income to maintain his/her standard of living.
California Document Preparers has helpedhundreds of families get divorced
Guided Divorce: A specially trained, neutral third-party
If, however, your situation is more complex and you and your spouse cannot agree on how to divide your assets and raise your children, CDP’s Guided Divorce may be the right solution for you. We’re a specially trained, neutral third-party who work with divorcing couples to guide them through the issues that have stalled their Divorces. Together we reach a mutually acceptable resolution. There’s no judge, no winning or losing. Instead, our Guided Divorce is based on the principles of negotiation, an open mind and compromise.
Meet Dr. Alan Green. He has a tiny but lucrative practice in Queens. His patients travel from around the country to get prescriptions to drugs they believe will fight aging. Who are his patients? An estimated 5% are fellow doctors. Others have backgrounds in science or are in the upper-income bracket. He charges $350 for an initial visit and doesn’t accept insurance. Many fly to their appointments in their own airplanes. One 85-year old drove through a Midwest snowstorm to keep her appointment. Dr. Green is 76 and has been taking the drugs for three years himself.
Taking off-label drugs to fight aging
Green is among a small but growing number of doctors who prescribe drugs “off-label” for their possible anti-aging effects. In this case, the drugs are metformin, commonly prescribed for diabetes; the other drug is rapamycin, prescribed to prevent organ rejection. Now these drugs are being prescribed for their anti-aging powers, though there’s little evidence to support their premise.
Taking these drugs is entirely experimental
Patients get the drugs legally off-label or illegally from a foreign supplier. This methodology is much easier than it is for researchers to launch clinical trials. To date, no rigorous, large-scale clinical trials have been conducted for aging. Pharmaceutical companies have little incentive to fund costly, large-scale trials because aging is systemic—there is an infinite number of ways that aging takes place—and metformin and rapamycin are generic, cheap and accessible for seniors.
The National Instititue for Health (NIH) rejected a $77 million grant proposal by a prominent group of researchers to determine whether metformin could target multiple age-related diseases at once. It was the second rejection of the ambitious but unorthodox bid.
Advocate for rapamycin and Alzheimer’s study
Studies show that rapamycin extends animal life spans. It also has been shown in such studies to stave off age-related diseases, from cancer to cardiovascular diseases to cognitive diseases. “There should have been a clinical trial for rapamycin and Alzheimer’s disease years ago,” said Matt Kaeberlein a professor of pathology at the University of Washington medical school, who has publicly urged the NIH to use a historic boost in Alzheimer’s funding to study the drug’s effects. But clinical trials are expensive and difficult to fund.
Changing the model: Tackling aging as a whole rather than as one disease at a time
Alexander Fleming, a former FDA official and advocate for the metformin proposal, said he believed it was difficult for regulators and funders to grasp that aging can be tackled as a whole — not just one disease at a time.
In fact, NIH reviewers who rejected the metformin proposal cited problems with the project’s aim of testing multiple age-related diseases at once. The researchers considered appealing the decision, asserting those reviewers were biased against studying aging as a whole. The NIH, which declined to comment, discouraged the attempt.
Researchers have moved ahead with clinical trials focused on specific age-related conditions
Researchers have shown that a “cousin” of rapamycin boosts the effectiveness of flu shots and lowers the incidence of upper respiratory infections in seniors by up to 30%.
This group has licensed it from Novartis and is now working on getting approval to target Parkinson’s disease.
At a recent forum on aging, a NIH researcher asked the 300 people in attendance to raise their hands if they were already taking metformin for aging. “Half the audience raised their hands,” recalled Nir Barzilai,director of the Institute for Aging Research at the Albert Einstein College of Medicine. “And a pharmaceutical rep estimated that metformin sales are up 20%.”
To be successful, clinical trials are necessary
Barzilai contends that researchers in the longevity field first need to set up a framework for testing in clinical trials. Even if metformin doesn’t pan out as the most effective drug, he asserts a model like the metformin proposal is needed for any major clinical trial to proceed. His group is now trying to secure about half the amount of funding it requested from NIH from a mix of nonprofit and private investment.
Proceeding with caution
While Dr. Green plans to continue prescribing his drugs, other doctors who may be open to prescribing metformin are holding off on rapamycin due to side effects in higher doses. Meanwhile, we’re a society obsessed with youth, and supplements with purported anti-aging effects routinely enter the market with little scrutiny and less evidence. There will be more on this one.
Many of our clients are seniors who come in to our offices to create their Living Trusts
The result is numerous conversations on a wide range of topics related to health, healthcare and end-of-life planning–and a Trust is an important part of this planning process. Our dedicated team has assisted hundreds of families in creating their Living Trusts. Our comprehensive LivingTrust package includes a Power of Attorney and an Advance Healthcare Directive. We’re responsive and available throughout the process. We’re helpful, compassionate and affordable.
Vanessa Hammer and Brendan Hammer are two divorce lawyers who fell in love and married. Both came from families who had struggled financially, which helped mold their shared values and goals. Vanessa came from a large Mexican-American family in Houston. Brendan was the only child of an Hispanic mother.
When Vanessa graduated from law school in 2006 she moved to Chicago where Brendan had one more year. They planned to move to Houston after his graduation. The early years were filled with hard work as they built their careers. They traveled, made friends and were happy.
First signs of trouble revolved around their families
For Vanessa: “I sacrificed to leave my family, and I made concessions in my career in Chicago because I thought we were going back to Texas.” For Brandon, it was the death of his mother, his father coming to live with them and the birth of their son—all in one year.
By 2013, when their son was nearly three, things began to change. Brandon became snappish and began drinking too much. Vanessa learned that he he’d had an affair. This was his reaction to the events in his life.
They spent a year in therapy exploring the roots of their divide
Family was important to Vanessa. She wanted to move home to Texas and wanted another child. He wanted neither.
Divorce became inevitable
In 2014 Vanessa and their son moved to Texas. Brendan visited frequently and spent weekends with their son, who hated when his father left at the end of their visits. In the summer of 2015, Brendan left the firm where he had made partner and moved to Houston. A year later they all moved back to Chicago. “Culturally and educationally, Chicago better fit our values for raising a young child,” he said.
A living solution that was right for their family: Nesting: Two houses for three people
Despite their Divorce, they now are purchasing a home for their son who will stay in that home with one of them as they each take turns living in a separate residence that is also shared. This is referred to as nesting — providing the child of divorce one consistent, stable place to call home.
Feeling stigmatized by Divorce
Brendan feels that there’s a stigma associated with divorce, that their solution for keeping their family together isn’t understood by all. Vanessa wants people to understand that they are a family—though their living arrangement is a little unconventional.
As seasoned divorce lawyers, the economics of their Divorce were settled fairly, with the flexibility necessary to accommodate two parents living in an expensive city raising a child. Yet their incomes now must cover two households, not one. Their son is too young to understand divorce. “He knows there was a time when mom and dad didn’t live together, but he knows we are a family.” They always use the word “we”, as in “we are giving you this gift”. They made a conscious decision not to use the word “divorce” with him.
Life after Divorce: Their priority is raising their son
Having an equal partner helps when one of them travels or has other commitments. “We are clear the marriage is over, but I care about Brendan and what happens to him because he is my family,” she said. Both agree that their son is the best thing that happened to them and that they’ve grown up through the divorce process.
Is their new life better?
In some ways, yes. “I have a lot more freedom, and if I am honest with myself I found marriage restrictive.” She concurred: “I always felt I had to ask permission for everything, for having my own life apart from the family.” The move to Texas had to happen to prove that it wasn’t right for our family.
Don’t say anything to the kids until you have a plan.
There’s happy divorce and I’ll-never-see-you-again Divorce. Be creative and understand the range of options for divorce.
“If there are children, minimize their exposure to adult issues,” she said. “All a kid wants to know is that everything is going to be okay. Be a rock even if you don’t feel like one.”
California Document Preparers has helpedhundreds of families get divorced
Our dedicated team has helped hundreds of families get divorced. We’re responsive and available throughout the process. It starts with an office visit to review the Divorce process, responsibilities and costs. If you’re contemplating Divorce, schedule an appointment today to talk to one of our team. We’re helpful, compassionate and affordable.
Living Trusts are an important service for us, and creating a Trust often inspires people to get serious about life planning. Many of those who are retired or who are nearing retirement begin to make plans for what they hope will be the next twenty or more years. Health and economics influence every decision, but having a plan—and acting on it–provide peace of mind for many seniors and their families.
Aging in place is a concept that has gained popularity for some very good reasons
Many retirees move to where they can be close to their kids and grandchildren. Remaining in the home where you’ve raised your family and celebrated important milestones may be the most logical place to live out your life. But not every home is suitable for aging seniors. Isolated access, stairs, loose floorboards, porches, electronic gates and winding driveways can seem insignificant now, but what if you have a stroke? You’re suddenly completely isolated, unable to get into or out of your own home.
Ben and Sara have decided to age in place
Ben and Sara have been trying to sell their 40-acre property in the Napa Valley for the last five years. It’s accessible from a steep, winding road that finally ends at their driveway. Visitors hit the buzzer and an enormous, yawning wood and iron gate slowly swings open. Their lovely home is on a single level, but the property traverses the hillsides. Sara and Ben are in their late 70s, still busy and active. Over the years they have spent a lot of money remodeling their home. They have tried to sell, but have not found a buyer who will meet their price. They’ve decided to stay right where they are and age in place.
Really bad idea. This is not the kind of home in which to be aging in place
Ben and Sara are isolated in their home. When the power goes out, that huge gate won’t open and there is no other ingress/egress. When they’re no longer able to drive, they will be completely isolated. Their nearest neighbors live another half mile away, up more winding roads. Their three grown children all live on the east coast.
Maintenance on their 40 acres is becoming a burden
They have a gardener, but Ben does a lot of the work himself. He enjoys the physical effort, including fussing over his tomatoes, olives and grapes. He knows, however, that he is doing less and aching more. While Ben and Sara are financially secure, maintaining their property is a constant drain.
Ben and Sara would be better off taking a financial loss, selling their estate and buying a smaller home or cottage in Napa where they can safely grow old within walking distance of the library, cafes and activities.
Choosing to stay in your own home can be an expensive proposition
Despite the costs, the United States Aging Survey shows that many Americans age 65 and older say they want to stay right where they are, in the homes where it’s comfortable and familiar. But to age in place successfully, it’s often necessary to remodel your home to make it safer.
How will you age?
Consider how you might age before remodeling your house to accommodate life after retirement. Although medical advances and improved diets are keeping seniors healthy and active longer, the years inevitably take their toll. Eyesight and hearing may worsen; it may be difficult to navigate stairs, step over a threshold or climb into a bathtub. It’s not unlikely that at some point you will require a walker or a wheelchair. If arthritis is in your gene pool, you could have difficulty grasping and turning doorknobs.
Falling is a concern as we become less steady on our feet
Seniors dread falling, as old bones heal slowly. Replacing a hip or knee requires a long recovery period. Removing potential hazards is critical to home safety for aging seniors.
What remodeling do you need to age in place?
In the same way that you baby-proof a home, you need to age-proof it for seniors. You might not need as big of a house as you think. If you live in a two-story home, you may want to move to a smaller home on a single level. You may think about remodeling that second floor to make room for a family member or friend to live with you as a caretaker.
Some common remodeling projects for those considering aging in place
Install non-slip flooring. Falls are a leading cause of death and injury for older Americans. Replace the floor with a nonslip surface or install nonslip rugs.
Walk-in tub or shower installations. Making a bathroom safer may require a walk-in tub or shower.
Wider doorways for wheelchairs. According to the ADA, doorways should be at least 32 inches to make room for a wheelchair or walker.
Installing a ramp. A ramp will make entering your home in a wheelchair more manageable.
Install stair lifts or handrails. A stair lift for someone who can no longer access upper levels of a house is an important consideration.
Change faucets to levers. A small thing, but a big difference maker to someone with crippling arthritis.
Bathroom remodeling. Remodeling a bathroom quickly gets expensive. Making room for a wheelchair can mean new plumbing and electrical.
Lower the kitchen countertops. Those in wheelchairs will need to have cabinets and counters lowered.
Creating a Living Trust is an important part of financial planning
California has passed legislation that could help hundreds of thousands of independent contractors become employees. It would provide the opportunity to earn a minimum wage, overtime pay and other benefits. Yet this legislation is highly controversial. Uber, for one, doesn’t think the law’s provisions apply to its drivers. They’re just one company that is contesting this law.
The emergence of contractors, or “alternative” workers
The recession of 2009 was a catalyst, producing hundreds of thousands of contractors. These are workers who were laid off during the recession and started their own consulting firms or other small businesses, not necessarily out of choice but necessity.
Many of these contractors are older workers, those in their 40s, 50s and 60s
As the economy began to improve, employers were reluctant to hire these workers back at a higher rate when they could employ younger staff at a lower cost. They might hire those older workers as temporary contractors, but they wouldn’t be paying for their healthcare, 401k plans or other benefits. One study shows that as many as one in three adults works a “nonstandard”, or temporary, job to get by. Some of these are retired people who need more money to supplement their incomes, or they may like the stimulation and structure of being in the workforce, even if on a part-time basis.
Here’s the gig economy formula: If the company directs their tasks and the work is part of the company’s main business, the business falls within the new law. Employees are covered by minimum-wage and overtime laws. Businesses must also contribute to unemployment insurance and workers’ compensation funds on their employees’ behalf.
An estimated 1M contractors are likely to be affected by the measure
Think of nail salons, janitors and construction workers, administrative help in a wide range of professional offices.
The tech industry and business in general outsource everything these days—writers, graphic designers, photographers and developers.
As workarounds, workers may find their schedules and job descriptions changing; others may be out of jobs as costs rise.
Governor Newsom intends to sign the bill but has indicated that he would be open to negotiating changes or exemptions with businesses like Uber and Lyft if they were willing to make other concessions. That has added to the air of uncertainty about the law. Litigation is also likely to follow.
Uber’s drivers expected to retain their independent status
Uber remains confident that its drivers will retain their independent status when the measure goes into effect on Jan. 1. In order to classify drivers as contractors, Uber must prove that it doesn’t direct and control drivers, and that they typically operate an independent driving business outside their work for Uber. Drivers for Uber and Lyft are split on the bill.
The ruling could apply to many industries that predate the gig economy
Some religious congregations would struggle to pay for full-employment benefits for their leaders if they were converted from independent contractors to employees. “For small churches that operate on very small budgets, it could force them to lay off their rabbi or maybe only hire them part time,” said Nathan Diament, the public policy director for the Orthodox Union Advocacy Center.
The costs for app-based businesses could be significant
Construction companies have long complained that they face unfair competition from rivals that classify workers as contractors so they can avoid paying payroll taxes and lowball bids on projects. App-based companies are “starting to send carpenters, electricians, plumbers off their platform. These lower-wage employees are undercutting brick-and-mortar businesses who are doing the right thing — paying for workers’ compensation, being very efficient, working hard to make a profit.”
The new law has created anxiety and confusion for the wine industry
Small vineyard owners are concerned that they could be forced to employ the independent truckers who haul their harvests. They’d have to pay insurance and workers’ compensation. These truckers currently operate as contractors, with their own rigs and insurance, and serve several vineyards.
Creating a Living Trust is an important part of estate planning
The government is responding to statistics showing that current generations are not saving for retirement. Unlike their thrifty parents, many baby boomers are alarmingly ill-prepared for retirement. Many other employees are more focused on present financial needs than future ones. The implications of generations of people who are unable to work–but without resources to live–present a potentially overwhelming burden on the government. Finding ways to help people prepare for retirement is in everyone’s best interest.
The recession gave birth to entrepreneurs and consultants
Remember the recession? Those who couldn’t get jobs started their own businesses. They learned they couldn’t depend on someone else for a job. This was especially true for older workers. Companies were looking for a younger, cheaper workforce. There’s a good chance those companies are not providing retirement plans, that they’re outsourcing work rather than hiring employees and having to pay for benefits.
A study shows that only 51% of Americans are employed by companies withretirement plans.
Of those employees, only 40% actually participate.
In addition, experts say one in three Americans has less than $5,000 in retirement savings and 21% have none.
Financial planners recommend seniors save $1M before retiring
Because life expectancies are much longer than they were for previous generations, financial planners recommend that seniors save a minimum of $1 million before retirement. Clearly, many are falling short of that goal. In an effort to change this gloomy retirement forecast, the U.S. House of Representatives passed The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The bipartisan bill attempts to address the financial readiness of seniors for retirement.
The SECURE Act:
Encourages small businesses to offer employee retirement plans.The bill lets small businesses cut through administrative red tape and ignore certain legislative mandates to tailor retirement plansto their needs. It also permits multiple small employers to band together and create 401k plans. Under the bill, some part-time employees may also have access to employer retirement plans.
Permits retirees to accumulate more retirement savings over a longer period of time. The bill raises the required minimum distribution age for retirement plans from 70.5 to 72. In addition to permitting retirement plans to earn more over an extended period of time, the bill will also make retirement savings last longer. The year-and-a-half delay in distributions will result in a larger retirement account and prevent seniors from spending their savings sooner.
Removes the age limits on contributions to IRAs.Previously, no contributions were permitted after age 70.5. The bill removes that restriction.
Creates more payout options for annuities purchased through employer retirement plans.The SECURE Act would permit lifetime-income investments, such as annuities, to be paid out in monthly installments as well as in a one-time lump sum.
Changes payout options for beneficiaries of retirement plans. Currently, beneficiaries of retirement plans can stretch out distributions over their expected lifetimes, permitting the funds to continue to grow tax-free. The SECURE Act eliminates this stretch-out option, requiring that nondesignated beneficiaries, such as Trusts, receive all retirement benefits within five years of the retirement fund owner’s death.
Expands the use of 529 account funds.The House Ways and Means Committee removed a provision that would permit beneficiaries of 529 college saving plans to use such plans to pay for homeschooling, special needs students, and private education. However, the new bill does authorize penalty-free withdrawals of not more than $10,000 to pay for certain student loans and apprenticeships.
The U.S. Senate is considering its own financial retirement measure—The Retirement Enhancement and Savings Act (RESA similar to SECURE). The differences lie in proposed changes to the stretch-out rules. There is bipartisan support for the SECURE Act; it passed by 417 to 3 votes in the House and has the greatest chance of being enacted. The act must pass a vote in the Senate to become law.
Creating a Living Trust is an important part of financial planning
I dodged a scam this week from a company that called to renew my subscription to McAfee, my antivirus software. They directed me to a website and told me I had to pay $420 for a two-year subscription. This felt a little hinky, but then, I’ve had a computer virus and it’s frightening how quickly it infects your entire hard drive and destroys files.
I hedged a bit, suggesting that I only wanted a one-year subscription
Apparently this wasn’t an option. Now I was getting really suspicious. I asked this guy to call me back in an hour, and I quickly contacted my computer guy. Subject line: “Is this for real or a scam?” He responded within 15 minutes. “SCAM. These guys don’t make calls.” He just saved me $420 and likely more. Once these guys find an easy mark, they’re eager to make another score.
This incident alerted me to potential holiday scams
Holiday scams target online shoppers. Stats show that a whopping 60% of us are buying our gifts online this year. ZeroFOX warns that scammers’ most successful efforts snare shoppers by impersonating major brands with phony websites and social media campaigns. Those most at risk—sites and campaigns related to fashion, tech and sporting goods—all the stuff we want!
These phony sites and fake posts entice you to spend money for products you’ll never receive. Many are designed to harvest credit-card numbers and other personal data to commit identity theft or sell on the dark web. Scammers may distribute malware-loaded links or attachments via supposed coupon offers or “order confirmation” emails asking you to verify an order you never placed. Gift-card frauds also shift into high gear during the holidays.
Be alert; watch for signs of a potential fraud when there are:
Ridiculously deep discounts on hot items–especially if they’re on unfamiliar websites.
Spelling errors or shoddy grammar on a shopping website or in an email.
Branding errors. If a phony website is masquerading as a well-known brand, there’s a good chance that the branding is poorly executed.
Shopping or travel sites that don’t list a phone number or street address and offer only an email address. These are often offshore and have no contact information or accountability.
Sites that don’t have privacy policies.
A few tips for secure online shopping this season:
Mouse over links in emails and social media ads. This will display the destination URL, and you can click through only if you’re certain it’s a legitimate site.
Be an informed consumer. Doing some quick online research could save you some heartache. Google unfamiliar sites. Search for their names along with keyword terms like “scam,” “complaints” or “reviews”.
Before purchasing, make sure return and refund policies are clear.
Don’t buy anything from a site unless the URL begins with “https://” or there’s a padlock or unbroken key icon in the address bar or at the bottom of the browser window. These indicate a secure connection.
Don’t buy anything online while using a public wifi network, as it may not be secure.
Don’t make a purchase or donation if a website or caller seeks payment by wire transfer, gift card or prepaid card.
Forget about really great deals and free gifts
Finally, if an unsolicited email asks you to click on a link or download an app to receive or be eligible for a really great deal or to arrange delivery for a free gift, ignore it. This is the one where you’ll know as soon as you click that it’s too late. You could be infecting your computer with a virus as well as setting yourself up for fraud.
The holidays: A very good time to talk to your family about creating a Living Trust
Many of our clients have told us that the holidays are the perfect time to talk to reluctant parents about creating a Living Trust. For many families, it sets the stage for a discussion about appointing a Power of Attorney and an Agent for their Advance Healthcare Directive. A Trust is really about families, and it’s one of the most thoughtful thing you can do for those you love.