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Gaining Financial Security After a Divorce
Dealing with the emotional stress a divorce brings is the #1 thing most splitting couples worry about, but a close second is money. If you’ve been through a divorce, you know how difficult it can be to try to sustain two households on the same income. If you’ve never been divorced, you’ve still heard the horror stories about wrecked finances. It’s enough to make you wonder if it’s even possible to get through a divorce without taking a big financial hit.

Here are some tips that can help you stay on good financial footing following a divorce:

Know where you stand.  

Before you even start a divorce action, be sure both of you know the exact state of your finances. This will help you make rational decisions as you negotiate your divorce. In most marriages, one spouse handles the finances more than the other. If it’s that way in your household, and you’re not the one who handles the money, it’s time for you to learn everything about your income, assets, debts, and the household budget. If you need help, seek out a financial consultant.

Focus on what you need

In the heat of a divorce, it can be difficult to keep your focus on your needs, not your wants. Emotionally, you may want to keep the house, but do you really need to? Some couples may decide to keep the house until the kids are out of school. But can you keep up with the mortgage payments and maintenance on just your income? Before you reach a decision, examine the cost of renting or buying a less expensive home in the same school district. Keeping the family home means you could be financially tied to your ex for as long as you co-own the property unless you are able to refinance and remove your ex from the mortgage.

You also need to consider health insurance if you’re under 65. If you’ve been on your ex’s insurance through work, you should be able to continue with that coverage for up to three years through COBRA benefits, but you will have to make the payments. 

Plan for retirement

While Social Security benefits are not subject to division in a divorce, there are some rules that will affect post-divorce income. For example, you cannot collect benefits on your ex-spouse’s record after a divorce unless the marriage lasted more than 10 years and you are over age 62. If your ex-spouse dies, you may be eligible for survivor benefits (100% of your ex’s benefits) provided the marriage lasted 10 years, you are at least 60, and you are not already entitled to benefits equal to or greater than your ex-spouse’s benefits. 

Splitting a qualified retirement plan like a pension or 401(k) plan requires the preparation of a QDRO (qualified domestic relations order). This order allows for the division of qualified plan assets in a tax-deferred manner for the receiving spouse, and provides that spouse with 60 days in which to roll it over into an IRA without penalty. If you want to take some money out for divorce expenses, you can make a one-time withdrawal before you do a rollover without incurring a 10% penalty, even if you are under age 59 1/2, but you will still have to pay income tax on that withdrawal.

Establish financial goals.

Establishing clear financial goals will keep you on the right track post-divorce. Even if you are starting over without a big financial cushion, you need to create an emergency fund for any unexpected expenses so you don’t have to go into debt.

Prioritize your retirement over saving for your children’s college. They can always get scholarships or loans and there are no loan options for retirement. Consult with a financial advisor, especially if your ex has always handled your joint finances.
“The best way to predict the future is to create it.” 

~ Abraham Lincoln
Team Update
We may need haircuts... but we are safe, we are healthy, and we are here for you.
Divorce and Co-Parenting During COVID-19: Answers to Five Common Questions Concerning Stimulus Checks and the CARES Act.
Co-parenting and divorce are difficult issues for families to navigate, and they haven’t become any easier during the current economic times and COVID-19 pandemic. On March 27th, 2020, Congress passed, and the President signed into law, the Coronavirus Aid, Relief and Economic Security (CARES) Act. It is an immense law (247 pages in length) that provides financial help for parents and families by authorizing “stimulus” payments from the IRS. For co-parents and divorcing spouses, a number of questions can arise regarding the implementation of stimulus checks. Here are answers to five of those frequently asked questions:

The Good, Bad and Ugly – Part 2: A COVID-19 Co-Parenting series
“I don’t want to go to Dad’s. I have all of my school stuff here and I don’t want to pack it up.” I knew it would come. Last week was “I can’t wait to go” and this week it was bemoaning the same fact. Co-parenting during COVID-19 continues.

This week in my lawyer role, we saw the good, bad, and the ugly in co-parenting surface. I used to say that divorce sometimes brings out the worst in parents. Now I know better. Divorcing during a pandemic beats that by a mile.

The Good

For the most part, parents continue to follow their parenting schedules without incident. Life for these families is going on as normal. Fundamentally, these co-parents are doing a great job of not upsetting their child’s normal parenting routine/schedules when all of their other schedules have fallen by the wayside. And if these parents are anything like me, they are probably relieved when transition time comes after homeschooling their kids for any amount of time.

Coach's Corner
with Susan Ann Koenig
April But Not Fooling
It was January 21 when I made my first joke about the Covid-19. A follower of global news, so I’d heard the news from overseas. My buddy Tom’s go-to drink is a bottle of Corona with lime. I texted him:

Reports of a deadly coronavirus from China.
Be careful out there.
I ended it with a beer emoji.

For years Tom and I shared a friendship with Mary, a friendship with Mary, a tiny woman in her 80s who lived alone. Tom was her surrogate son of sorts. It was vodka for Mary, cabernet for me, and Corona for Tom until the end of life vigil kept during Mary’s final days.

Who is Koenig|Dunne?
For over 35 years, the Koenig|Dunne team has been helping people pick up the pieces of their life to make a new start. Bringing a family business back from the brink of financial ruin. Sheltering a child from the conflict of a custody battle. We do this work because its work we know matters.

Whether an amicable collaboration or lengthy litigation lies ahead, we’re the team who will empower you on your path to a better future, from start to finish. That’s a promise. We promise you – we will see you, hear you, and stand by you. Learn More
Guidance when you want it. Strength because you need it.
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