Wednesday, June 27, 2007

Divorce money saving tip

Here's a tip that most people don't know about. More and more people are now buying long term care insurance. The lower earning spouse in a divorce may be especially concerned about how to pay the bills if they have to go to assisted living or a nursing home later in their life.

Michelle and Kyle were getting divorced. Michelle was very worried about growing old by herself and what would happen to her if she became ill. She found out that if she and Kyle applied for long term care insurance before they divorced, they would get a "couple's" discount of up to 30-40%. And after the divorce was final, the premium would not go up - the discount still applied so they both saved money.

But what if Michelle wanted the long term care insurance and Kyle didn't? Michelle could still get a couple's discount but it would be lower - perhaps only 15-20%.

Every little bit helps and over years of paying premiums, this discount can really make a difference!

Wednesday, June 20, 2007

Modification of Child Support

Kate and Alec had two children, ages 5 and 7, when they divorced. No matter what Kate said, Alec refused to include in their divorce agreement a clause which would increase child support each year by inflation. As the children grew up, they became more expensive and Kate was having trouble making ends meet. She contacted Alec to tell him about her situation and how much the children's expenses had increased. Alec said, "So sue me." So she did.

After being served with a court date, Alec reluctantly agreed to increase child support to the amount according to the child support guidelines, using his current income and the children's current expenses, not the income and expenses at the time of the divorce.

Every parent knows first hand, the expense that goes into raising a child in this day and age. This becomes an even more daunting expense when two incomes suddenly become one. Children often become pawns in the midst of divorce proceedings, whether intentional or not.

Remember---child support is ALWAYS modifiable.

Wednesday, June 13, 2007

Research the value of retirement assets

Janet and Kevin are in the midst of a divorce. Kevin has a defined benefit pension which will pay him $2,300 per month when he retires. Janet decides that a few thousand dollars is not worth fighting over - besides she would rather get the $12,000 baby-grand piano they recently purchased for their den.

Wrong decision. Janet has made a costly mistake. Why? Because the present value of Kevin's pension is more than $250,000! Instead of taking the piano, she could have exchanged her half of Kevin's pension upfront for $125,000 worth of another asset, leaving Kevin with is pension. Or she could have chosen to wait until Kevin retires to get her part of the marital portion of his benefit. What seemed to have only been a few thousand dollars on the surface, proved to be a costly mistake in the end.

To get a FREE report "Top 10 Money Mistakes in Divorce," go to www.carolannwilson.com.