There is a new designation out there to help divorcing couples when they have to sell the family home or one of them needs to buy a new house.
Certified Real Estate Divorce Specialists are trained in the legal and tax aspects of the divorce process as it relates to real estate. They learn obscure legal implications that even many divorce attorneys don't understand.
Divorcing couples are going through one of the most stressful times in their lives and they need all the help they can get. They are looking for a professional who not only empathizes with what they're going through, but who understands the tax and legal implications of dividing real estate in a divorce.
For more information, go to http://www.realestatedivorcespecialist.com/.
Friday, January 25, 2008
Monday, October 29, 2007
Why use a financial divorce professional?
Why should you use a financial divorce professional? There are many of them who have been trained in the specific financial and tax aspects of divorce. They can help save you money and help your attorney get you a more equitable settlement. The reports that a financial divorce professional provides gives you information about the financial result of any given settlement that you and your spouse may be discussing. This helps you make better decisions and the ultimate result is that you stay out of court. The two of you make the decision - not the judge who doesn't know you.
In the rare instance that you and your spouse cannot come to an agreement and you decide to go to court to have the judge make the final decision, the financial divorce professional has been trained to appear as an expert witness in this situation.
In the rare instance that you and your spouse cannot come to an agreement and you decide to go to court to have the judge make the final decision, the financial divorce professional has been trained to appear as an expert witness in this situation.
Divorce tax laws
Would you like to be an expert in divorce tax law? Find out how to learn the divorce tax secrets that even many divorce lawyers don't know! Go to www.FDAdivorce.com/tax.
Wednesday, September 12, 2007
Do-it-yourself divorce mistake #3
Chang and Tip Tum had come to America many years ago and had opened a restaurant which become hugely successful. After 24 years of marriage, they wished to divorce. Even though they were now worth millions, their thrifty habits influenced them to do the divorce themselves and not spend money on lawyers. In dividing their assets equally in value, Chang took the stock accounts and the retirement plans and Tip Tum took the real estate. Even though Chang earned ten times what Tip Tum earned, he offered her only 3 years of maintenance while he convinced her that her assets were enough for her to live on.
They drew up their agreement, filed it with the court and their divorce became final. Tip Tum's real estate took a bad turn and soon she didn't have enough to live on. She decided to get some professional advice. She learned that a property settlement is final and cannot be renegotiated. However, there was hope that the maintenance issue could be re-opened.
An interesting sidelight in this case is that it appeared that Chang had not revealed one of his large retirement plans. Because of that omission, it is possible that the property division may be re-opened! This case is still open so I cannot tell you the ending yet. But the important point is that even though you may think you are saving money by doing it yourself, the risks you take by not getting proper advice to start with can cost you much more money in the long run!
They drew up their agreement, filed it with the court and their divorce became final. Tip Tum's real estate took a bad turn and soon she didn't have enough to live on. She decided to get some professional advice. She learned that a property settlement is final and cannot be renegotiated. However, there was hope that the maintenance issue could be re-opened.
An interesting sidelight in this case is that it appeared that Chang had not revealed one of his large retirement plans. Because of that omission, it is possible that the property division may be re-opened! This case is still open so I cannot tell you the ending yet. But the important point is that even though you may think you are saving money by doing it yourself, the risks you take by not getting proper advice to start with can cost you much more money in the long run!
Monday, August 13, 2007
Do-it-yourself divorce mistake #2
Jim Suits, President, Summit Capital Advisors (jsuits@summitcapitaladvisors.net) had this story to tell after reading the last entry:
"Your last blog entry reminds me of a case we had where a tax client who came in to have his taxes done. He and his wife of 30+ years had gotten a divorce the year before. To save attorney fees, they downloaded the forms and "filled in the blanks" without help. The husband took them to an attorney and asked: will this work? The attorney looked at the papers and said: Yes.
"One item in the divorce stated that the wife was entitled to 50% of his 401k. So, after the divorce the husband withdrew her 50% from the account and wrote her a personal check. It was after that, that he came in to have his taxes done. Imagine his surprise when he was hit with early withdrawal penalties and income taxes totalling more than $100,000. Then came that famous question "Why didn't someone tell me?"
"(Because you wanted to save a nickel, that's why!)"
"Your last blog entry reminds me of a case we had where a tax client who came in to have his taxes done. He and his wife of 30+ years had gotten a divorce the year before. To save attorney fees, they downloaded the forms and "filled in the blanks" without help. The husband took them to an attorney and asked: will this work? The attorney looked at the papers and said: Yes.
"One item in the divorce stated that the wife was entitled to 50% of his 401k. So, after the divorce the husband withdrew her 50% from the account and wrote her a personal check. It was after that, that he came in to have his taxes done. Imagine his surprise when he was hit with early withdrawal penalties and income taxes totalling more than $100,000. Then came that famous question "Why didn't someone tell me?"
"(Because you wanted to save a nickel, that's why!)"
Friday, August 3, 2007
Do-it-yourself divorce mistake
When Michelle and Scott got divorced, they didn't want to spend money on an attorney so they got the forms and did it themselves. They had no children so the only issue was dividing the property. They decided to split all of their assets 50/50 and their final agreement stated that "they would divide each asset equally." Their assets included a $24,000 savings account and a $104,000 mutual fund, both in joint names.
After the divorce was final, they each had pressing business issues and kept putting off the paperwork needed to divide the two accounts. After a year had passed, Scott finally found time to get the savings account and the mutual fund divided. Imagine their surprise when they were hit with gift taxes!
The Tax Reform Act of 1984 says that transfer of property is incident to divorce if it occurs within one year of the divorce OR the transfer is stated in the divorce decree and occurs not more than six years after the divorce.
They could have avoided the tax problem they found themselves in if they had consulted with an attorney and (1) stated in their final agreement the specific assets that were to be divided, or (2) realized the importance of dividing the assets within the first year after divorce.
After the divorce was final, they each had pressing business issues and kept putting off the paperwork needed to divide the two accounts. After a year had passed, Scott finally found time to get the savings account and the mutual fund divided. Imagine their surprise when they were hit with gift taxes!
The Tax Reform Act of 1984 says that transfer of property is incident to divorce if it occurs within one year of the divorce OR the transfer is stated in the divorce decree and occurs not more than six years after the divorce.
They could have avoided the tax problem they found themselves in if they had consulted with an attorney and (1) stated in their final agreement the specific assets that were to be divided, or (2) realized the importance of dividing the assets within the first year after divorce.
Tuesday, July 17, 2007
Is there additional income?
Janine was getting divorced from Mark, a highly paid executive who worked on Wall Street in New York City. They couldn't reach a settlement and in February of this year, we were ready to go to court to have the judge decide. Mark showed on his financial disclosure that he earned $500,000 per year.
I was the Financial Divorce Expert on this case and after we reached the courtroom, I was given a copy of Mark's W-2 for his 2006 wages. After looking at it, I was able to get on the stand and testify that Mark's yearly income was actually $600,000!
If you will look at a W-2 form, you will notice several boxes. Box 1 shows "Wages, tips, other comp." Box 2 shows "Social Security Wages." Box 3 shows "Medicare wages and tips." On Mark's W-2, Box 1 showed $500,000, which is what he was reporting. But Box 3 showed $600,000. Why the difference? It is because Mark was contributing $100,000 per year to his retirement plan which was deductible so that Box 1 showed only his taxable wages.
Because I could testify that Mark still owned that $100,000 - it was just in a different account (his retirement account) - he had that much more money to use toward paying alimony.
The Judge ordered sizable alimony for Janine, her attorney was surprised, and everyone was happy (except Mark!).
I was the Financial Divorce Expert on this case and after we reached the courtroom, I was given a copy of Mark's W-2 for his 2006 wages. After looking at it, I was able to get on the stand and testify that Mark's yearly income was actually $600,000!
If you will look at a W-2 form, you will notice several boxes. Box 1 shows "Wages, tips, other comp." Box 2 shows "Social Security Wages." Box 3 shows "Medicare wages and tips." On Mark's W-2, Box 1 showed $500,000, which is what he was reporting. But Box 3 showed $600,000. Why the difference? It is because Mark was contributing $100,000 per year to his retirement plan which was deductible so that Box 1 showed only his taxable wages.
Because I could testify that Mark still owned that $100,000 - it was just in a different account (his retirement account) - he had that much more money to use toward paying alimony.
The Judge ordered sizable alimony for Janine, her attorney was surprised, and everyone was happy (except Mark!).
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