Top 3 Things You Should Know About Divorce

Friday, May 11th

Nobody plans for this day. You don't walk down the isle thinking how will we split our finances when we get a divorce. But, if the day does come when you and your partner feel like it's better to end the relationship what should you know?

We cash in with expert BJ Mann Divorce Mediator and author of the book "A Better not Bitter Divorce: The fair and affordable way to end your marriage"

Reach out to BJ Mann: http://bjmediationservices.com/

Thanks to our friends at Family First Credit Union for supporting the $even Figure$ podcast!  
When it comes to financial education, earning and learning go hand-and-hand, and Family First is here to help you and the Greater Rochester community with both! 

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00:16:17

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

Thank you for joining as it is seven figures mean I didn't see any writer is the most important things that the three most important things you should know about divorce. Now it's such an ugly word it's a tough pill to swallow back to square and you find yourself. In the midst of at all and there's no way of repairing your relationship. You have got to harm yourself put as much knowledge as you can. To protect yourself especially financially. So we're gonna try to give view is much information as we had today. Before we cashed in with our expert I wanna say thank you to our sponsors family first credit union from personal banking and business services and home loans their number one. Priority is finding a solution that works for you locally. OK can we bring in our guest today especially their axe frisky days and it's a divorce mediator you've been practicing divorce mediation or. Decades. And most recently now the author of a better not bitter divorce thank you so much for being with fancier welcomed there is so much information in this but it is such a good go to guide if you are unfortunately. Going down that path where you think your relationship is growing apart but. Today I think we should focus I and that's the wreath things that you should be aware of financially. So you can have a better not bitter divorce if we can narrow it Dowd is Eddie impossible dream ticket they know there's so much it will there is. A lot of our financial information it is that the nuts and bolts of the economics of ending your marriage of course. That is balanced with the emotional part of ending your marriage. Which has to do with of course kids. But the underlying fear in people when they're living. Independently for the first time is financial security. They feel if they can be financially security can emotionally help their children as well or he'll personally as well. So. The issues of how much money people are finishing her between the two of them is a real. Hard and fearful conversation which divorce mediation tries to make more gentle. And don't recognizing the practical and the financial. The one of the largest issues that you hear about his child support yes and judge child support. Is so by and large amiss around what it's supposed to before I met the first clarification. I frequently have to make in my office is that it's not intended for the direct relief is expenses of your children. So people lit up they haircuts and the extra curriculars. And be school supplies and school photos. And the school lunches and they say what that costs about three or 4000 dollars a year so why the heck is child support so much more. Well that guidelines. Look act. 17%. Or 25%. Or 29%. A year combined to gross income with a little bit of adjustment you on. And that numbers generally much larger for one child to could be 171000 dollars a year or two children. 25000. Dollars a year and the pay your is saying what the heck is this money going to jail and in fact child support is intended for. Household budget items so we if you have one child. You're considered a cost center so 17%. Is the New York State percentage guidelines for one child. 17% of your mortgage heavier utilities of your food. Of your cell phone. Of your car payment of your repairs on your house are allocated to the fact that you have one child 17%. And if you have to its 25. In if you have three it's 29. So you can see incrementally. More children don't cost more money because the moneys intended to help. Offset household expenses. So even if it's split fifty fast track and a lot of people ask that question so let's imagine you have. A 5050 parenting plan which is wonderfully eat more and more the norm. You have a week with mom in a week with dad. Will dad makes and forgive me I'm just gonna too little gender thing here but it's it's not intentional let's say dad makes. A 100000 dollars and mom makes 35000. Dollars well why would dad raised. His children 50% of the time on a 100000 imam race. The children on 35. So clearly there has to be some sharing. So when there's a 5050 parenting plans typically. The high income parent in this case dad is considered. Each child support K York. And that makes sense so. Mom and dad might end up raising the children and about 50000 dollars each. However it works out between the two if you. Now with both parents made precisely the same amount of money maybe they wouldn't exchange child support at all. At least still and this is very important. Have to figure out how they're going to share to direct related expenses who's gonna buy to close the school lunch is the birthday party guests for other kids. The haircut. It's better at because of only one parent is doing knack and that parent is digging deeper into their pocket than the other parent. So you do discuss those little nitty gritty deet tails in mediation absolutely we talk about direct related expenses. We talk about extracurricular expenses. Milestone expenses which for me are things that aren't high school you know the yearbook photos and drivers dead. I SAT ten healthy thousands Billy come up with. Every single one of these expand where you come up with the concept and that concept is typically will share them 50% each when they come up. Often they have to be mutually planned and budgeted so somebody's that's signing up but child for scuba diving or. Very expensive horseback riding for instance without the other person's consent. But there's a concept that we create. But there's a difference between ordinary expenses which child support we typically cover closed school supplies. You know school lunch is birthday party gives for other kids verses extra ordinary expenses that are usually. Sports or those senior high school expenses that don't come up all the time. But car insurance for instance. Is also another big one will we by Eric kids that car. Is that they went so these things as a contractor in the agreement. Like child support in the traditional way is intended to offset household. Expense that I. So that's the difference so even 5050 parenting plans have an exchange of child support when it's appropriate. Now in New York State you are there are laws where. One parent isn't payment child support. That they're supposed to at what point can you fight for their wages to be garnished and NN and others might be a whole other discussion. I can't really there's the enforcement of child support is. Pretty classic. And if child support is ordered in the divorce decree it is enforceable. And narrow lots of ways to do that. We just can be garnished. And the state steps in to really held a collect those dollars. One hopes that never constant that yeah I'm one of the reasons it doesn't come in parents should be aware of this. You can build notifications. Language into child support so one of low worries is that well over saying this is my incoming now. But what if child support could be going on for fifteen years things changed so we in the mediated agreement we built in a recipe. For what would trigger a change in child support we did you lose your job did you become disabled. Did you get a degree he's. What frequency do you want to just look at each other's income and put the marble through the marble shoot again in terms of Greek calculating child support. So good agreement in. Includes a lot of modification language that brings comfort to both people. That you know the overtimes not gonna be there anymore or. All sorts of things that influence in com. So the language is already put in place initially so that. Five years from now you don't have to. Really create a real you don't have you built in some good solid language that everybody understands what the recipe is for changing child support. On a mediated agreement is not a static document it's got a lot of growth claim which and it OK next thing man next big financial thing that you should consider. If you guys are thinking about it divorces why well of the other part of financial sharing is packing quilts spousal meat means you know a lot of people refer to that is alimony I'll use that term but New York State refers to is spousal maintenance. So above and beyond child support or if there are no children. On and there is a large disparity of income. And to there is so reasonable length. Of marriage. Most people get to walk away with some income security for a period of time. And that's calculated in New York State now since 2016. I calculation. And that's new in New York State. So dearest you put both parties incoming mayor and you'll see if there's so they're candidate for alimony. So you may be divorcing but you may still need to. Pay your husband in this case. I 88000 dollars a year. For a period of time and duration of that time is also set I tried blind. But typically it's a third of I'll delaying. Of years you've been married so if you've been married ten years there might be about three years where one spouse may pay the other spouse. Some additional money beyond child support or if there are no children to get the other person to be ramp up. Now disparity of income is not the only criteria. There are fifteen other factors that influence Whittier candidate. For alimony. But disparity of income is what goes into the calculator. So that's the first gate to see if you're eligible okay. And now into any team there's new tax law yes it's really impacts people write dear day in new tax laws that were created in December of 2017. Our. Have big implications for parents. The notion of who is going to be head of household. On your taxes in the future. As the real tax benefit. In the past. You were able to have. One person the head of household. And the other Percy get the dependency allowances which was that you know approximately 4000 dollars and dependent. And somehow that's sort of evens out. But Euro are no more dependency allowances. As of 2018. This tax season that were in the right now. When you go to filing your taxes next year for 2018. There's no dependency allowances. What happened is they rolled up the dependency allowances and a lot of other deductions. Into a large standard deduction. So the difference between a head of household. Standard deduction which is 181000 dollars purses in individual filing as a divorced single person is 121000 dollars. That's a big deal. There's one thing that's so often that it's cool to child tax credit. And that went up from 1000 dollars to 2000 dollars. And the person who's head of household. Doesn't have to be the person who's taking the child care credit. So there's ways of softening taxes but the tax implications. Are very different in eighteen and they were in the past so he needs some good input. Maybe speak to your tax accountant. I also listen to what ever your professional mediator or attorney is saying about this and saying oh you were saying it health care. Is huge as well then yes health care is a very large. A factor and lot of people come in thinking even though we're getting into forests my husband her weight can stay on my health insurance right. And of course that's not accurate at all that would be like needy got mad husband or wife's health insurance she can't have. People who are not your spouse is on health insurance so a lot of people choose. To process here and does marriage is illegal separation. Rather than eighteen force so that one's spouse can stay on their health insurance. Sound until they're able to find their own health insurance not every single employer. Allows fat pedals. And CD. Employment does so loud that continuation. There is however the marketplace. And the marketplace is still very viable. Option for people to go get their own health insurance. And but health insurance is scary. Uninsured medical expenses and health insurance for children. Are shared between the parents. And one parent or the other can't always keep your children nine until their eligibility and if so there's no way that the children are gonna be. I'm in short it's the spouse. That isn't earned health insurance anymore that's the worry. This must be a really rough time for you right now appear very interested in this specific podcast episode. You know all the emotions all the advent the thoughts going through your mind but as you say it all the time you will be able to thrive after. Right I really think that there's a three legged stool around to force it brings out honesty. It brings out courage. And it brings that resiliency. And you can live. Though and thrive after two force because you're living in earnest and courageous life. How many couples do you have that after mediation they decide we want to do this anymore thank you BJ you brought us closer together. Well it happy and fan and I'm always feeling very wonderful when it does but more to the point when people come for Conn felt in my office. And I see a little embers still. Glowing yeah I absolutely. Press the pause button and encouraged them to go to C a marriage counselor and I really to support the notion of running the entire marathon and that just getting we needed at the nineteenth. I don't and will they give so much you're welcome thanks. Much better now I'm bitter divorce and a fair and affordable way to and your marriage that's and you can always reach out to be and Fiji remediation services that. It's now we leave you with one of the final financial neck yet wise words from my dad. Father Knows Best my dad's too sad to have a great weekend dominate your finances. My recommendation is. Gained financial knowledge don't put all your trust and financial advisor. You don't have to know everything and everyone should have a basic understanding. And best in yourself by listening to financial podcasts. Read books. Three financial articles. Instead of building the level of understanding. Yeah we'll hope to make better financial decisions in the future. So.
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