Association of Divorce Planner - Business Valuation in Divorce - Expert Education at Annual Conference Sept 23-24

Business valuation during a divorce… Whichever spouse ultimately walks away with the business, there are complex issues to consider. That’s why I’m pleased to announce we have Kenneth J. Pia, Jr., CPA, ABV, ASA, MCBA, presenting at this year’s Annual Conference of the Association of Divorce Financial Planners, September 23-24.

Partner and Director of Valuation Services at Meyers, Harrison & Pia, LLC, Mr. Pia will focus on the financial implications of the privately-held business’s value and earnings, which in many cases is the single largest asset and income source to the marital partnership.

During his session, “Integration of the Value of a Privately-Held Business in the Divorce Process,” Mr. Pia will address this complex topic in great detail, and ADFP Conference attendees will gain valuable insights so they might better understand the key points of business valuation methodologies. They, in turn, will be better able to educate our clients and legal professionals so more equitable outcomes may be achieved.”

Attendees will also have numerous other opportunities to learn divorce finance best practices from leading practitioners in our industry.

Plus, attendees will have the option to participate in the September 22 Pre-Conference ADFP University, a one-day immersion in family law software, taxes, PR strategies, and more.

I look forward to seeing you there!

Sincerely,

ADFP President, Lili Vasileff, CFP, CDFA

For more information, contact me at HYPERLINK "mailto:Lvasileff@aol.com" Lvasileff@aol.com, or at 203-622-4911.

More About the Association of Divorce Financial Planners (ADFP)

(www.divorceandfinance.org)

The ADFP is an interdisciplinary association of professionals who research and analyze personal and business financial issues, as well as tax implications related to divorce. The association develops outreach programs, training opportunities, and continuing education to financial practitioners, allied divorce professionals, and the general public. The organization is a key role player in policy making regarding divorce financial issues and holds members to high standards in professional and ethical protocols in the U.S., Canada, and other countries.

About ADFP Conference Presenter, Kenneth J. Pia, Jr., CPA, ABV, ASA, MCBA

(www.mhpcpa.com/staff_Pia.htm)

Partner and Director of Valuation Services at Meyers, Harrison & Pia, LLC, Mr. Pia has conducted valuation studies of entire businesses and partial business interests. He has appraised companies in a broad range of industries for purposes of marital dissolution, and has served as an expert witness in many courts on business valuation and analysis, economic damages, tax, and divorce related issues. In addition, Mr. Pia has successfully mediated numerous litigated financial matters, both in the area of business appraisal and marital dissolution.

Association of Divorce Financial Planners National Conference - Sept 23-24 - Nationally recognized media expert Stacy Francis

Breaking news from the President of the Association of Divorce Financial Planners…

Exciting news for ADFP members! Nationally recognized media expert Stacy Francis, CFP®, CDFA™, will be presenting at the 9th Annual Conference of the Association of Divorce Financial Planners.

We’re expecting a record attendance at this year’s Annual Conference, coming to the Doral Arrowwood Resort, September 23-24. Stacy has graciously accepted the challenge to present a present a No Cost, Low Cost PR tactics overview at the optional Pre-Conference ADFP University on September 22.

Stacy is a dynamic speaker who has taught hundreds of classes and has shared the platform with some of the top speakers in the country, including Suze Orman and Jean Chatzky. She has helped thousands of clients nationwide create more fulfilling lives through financial freedom.

She appears regularly on CNBC, CNN, Nightly Business Report, NPR, Oprah and Friends and The Today Show and has been quoted in over 100 publications such as Business Week, CNN, Dow Jones, Entrepreneur, Forbes, Glamour, Investment News, Money Magazine, MSN, Newsweek, New York Times, and The Wall Street Journal.

Join your colleagues at this year’s Pre-Conference and Stacy will show you how to:

·        Pitch yourself and your firm in a way that impresses reporters

·        Take advantage of free online tools to increase media presence

·        Write your own press releases and get thousands of Internet search hits

·        Present yourself as an authority in your field

·        Book yourself for paid speaking engagements – without relying on an agent or speakers bureau

·        Cultivate valuable relationships with the press

Hope to see your there! Check back for more ADFP Conference announcements coming soon.

Sincerely,

ADFP President, Lili Vasileff, CFP, CDFA

For more information, contact me at Lvasileff@aol.com, or at 203-622-4911.

More about the Association of Divorce Financial Planners (ADFP)

The ADFP is an interdisciplinary association of professionals who research and analyze personal and business financial issues as well as tax implications related to divorce. The association develops outreach programs, training opportunities, and continuing education to financial practitioners, allied divorce professionals, and the general public. The organization is a key role player in policy making regarding divorce financial issues and holds members to high standards in professional and ethical protocols in the U.S., Canada, and other countries.

5 Divorce Tax Cautions

5 Divorce Tax Cautions  -  Be Informed Before You Sign

Listed below are some tax pitfalls of divorce.  Mistakes happen in divorce for lack of knowledge, and those mistakes can create additional costs to divorce that could have been avoided.

1.      Not knowing how to execute an institution to institution transfer of retirement funds and having to pay taxes on those funds. 

Financial institutions’ forms are often difficult to understand.  They can be formatted or have questions that if answered wrong, could create unintended consequences such as  taxes and penalties.

2.       Not knowing when you can withdraw retirement funds from a retirement account without paying a 10% penalty if you are younger than age 59 1/2.  

      In divorce there are exceptions to the 10% penalty for distribution of certain types of retirement money to the non-participant.

3.      Failing to realize that the person who receives alimony will be taxed.  

Taxes on alimony should be added to monthly budget expenses, and some recipients of alimony should send estimated tax payments quarterly to the  IRS and their state income tax agency. 

4.      Failing to have tax credits/refunds or capital gains/losses carried forward as divisible assets listed in the settlement agreement. 

      You may unintentionally give your ex-spouse a parting gift.  Paying attention to details is vital during divorce.

5.      Not deducting your attorney fees that are attributable to receiving alimony or retirement funds, if you qualify. 

     Do you know if you qualify?  This information can potentially save thousands of dollars.

The above is not tax advice.  The cautions are for consideration and should be discussed with  a tax advisor.

Each divorce has its own unique facts and circumstances.  Divorce Financial Planners provide financial information support and settlement analysis to clients who want to make informed decisions. 

Understanding Before Signing  -  Divorce Financial Planners Make a Difference.

Courtesy of Sandy Arons    http://www.getasmartdivorce.com



Adding a Divorce Financial Planner to Your Team at the Beginning

As a couple goes through the divorce process, they will be required to make many decisions that will impact their financial well-being for years to come. The best decisions come from an early understanding of settlement alternatives and consequences before making agreements.

It often happens that both parties make assumptions and decisions out of fear and anger. Early analysis and illustrations provided by Divorce Financial Planners open discussions, expanding the likelihood of finding workable solutions.

Divorce has layers of complexity such as what is the income available, what are the current living expenses, and what will they be in the future. That’s just a few of the income and support questions, not to mention taxes. What about the property division questions such as can we afford the house, how do we split the pension plans, and what about the debt.

With the multiple shifting components of divorce financial alternatives, its no wonder divorce can be very expensive and emotionally exhausting.

Divorce Financial Planners help clients with the simple and the complex financial settlement analysis necessary to make informed decisions.

Illustrations provided by Divorce Financial Planners are tools to give clients clarity and assist their negotiations.

Divorce Financial Planners work with individuals and couples from the beginning of the divorce through the end or as needed for a specific task such as pension division or net cash flow analysis.

Divorce Financial Planners work with clients who are self-representing, in mediation, in collaborative process, and in litigation. Divorce Financial Planners work with attorneys, mediators, and other professionals as part of a cooperative team to give clients the best outcome possible.

There is a smart way to divorce, a way to see choices and consequences before you sign your agreement by using the help of a divorce financial planner. The Association of Divorce Financial Planners can help you find a financial planner in your state.

Can I Make Changes to My Divorce Settlement?

If you have been divorced for a while, you may now realize that your divorce settlement agreement is no longer working in the way you had expected it to given unanticipated changes in your life post divorce.   This happens for a variety of reasons, especially for those who were in a hurry to get their divorce settled without involving the financial expertise of a divorce financial planner.  In other cases, things happen such as the loss of a job or there were new child related expenses that might have been anticipated but now call for modification or renegotiation of your judgment.

If you and your ex-spouse agree to change the settlement, modifying it should be relatively hassle-free.  However, if you do not agree to make the changes, you may be in for a painful second round of your divorce.  

There are specific means tests and legal statutes that afford you the opportunity to go to court to modify or cease your spousal support or child support obligations.  However, it is nearly impossible to make changes to your property settlement once the settlement is final.  Generally, property division is a one shot deal.  The only circumstances that exist for you to reargue, reopen or change property division is in rare circumstances such as duress, fraud, or legal error.  The circumstances that allow changes to the property agreement usually are identified within a very short window of opportunity – typically 30 days after the divorce is finalized.

Is it possible to make changes to the property agreement after your divorce?  The short answer is, “Probably not.”  Property division means you need to make educated and strategic decisions.  Do it right the first time with the help of a divorce financial planner who can also help set new financial goals for your future.  Things that seem “fair” during divorce negotiations sometimes really aren’t when you look 5, 10, 30 years into the future.  There really is no way for someone without the training and expertise to understand all of the long-term financial consequences of the decisions you will be required to make.  So be sure to find a qualified divorce financial planner in your state.

How To Avoid The High Cost Of Divorce

There’s an old saying…”Love is grand. Divorce is a hundred grand.”

If that saying shocks you, you are not alone.  Most people tend to underestimate the cost of a divorce.  While there are no national statistics for the cost of divorce, professionals agree that the average cost for a litigated divorce today is high.  According to divorce360.com the cost of divorce for a couple with an average income of $60,000 per year with a home worth $185,000 is about $53,000. For couples making $150,000 per year with a home valued at $535,000 the cost would be about $188,000.

Traditional divorce on average takes approximately two years to complete.  This is because of the number of legal motions and court appearances incurred typically in the course of offers and counter-offers passed between attorneys to resolve differences.  The longer it takes, the more expensive it is going to be.  Plus, that is two years of being fearful, angry, and anxious.  

One way to reduce the time and cost of the divorce would be to consult with a divorce financial planner.   A divorce financial planner can help you to better understand the reality of your financial circumstances: to quantify your financial needs and your spouse’s ability to pay for support obligations, as well as analyze an equitable division of marital property.

By working with a divorce financial analyst first, you can work through the financial details with someone trained to help you understand all of the financial consequences of the decisions you need to make.  Attorneys focus on legal issues while a divorce financial planner will provide more in depth analysis of-the complex tax and financial issues that you will be facing and present recommendations for achieving -a divorce settlement that is best for you.

Another benefit of working with a divorce financial planner is that you -can plan for what your financial life will look like after your divorce.  A divorce financial planner will help you transition into your post-divorce life by helping you create  a clearer picture of your long-term financial goals and produce budgets for you so that you’ll have a realistic picture. 

Once you know what your life will look like after your divorce, you will become much less fearful which will mean that you can face your divorce with confidence. And, chances are you will be able to develop a divorce settlement much faster.   Less time reviewing offers and counter-offers and less time in a court room will mean that you have more time to transition to the next phase of your life.

Getting a divorce? Consider Making a Visit to a Divorce Financial Planner Your First Step

There is no standard model for divorce, but traditionally when a couple decides to start the process they both consult, and then hire, their respective family law attorneys.  The reason that most people start with a lawyer is that they feel they need to immediately protect their interests.  But there are alternatives to this model.

One such alternative would be to make the first step in the process a meeting with a divorce financial planner. 

 

Dealing with the family’s finances is often the most difficult part of the divorce process.  What if you started there and worked through the inventory of financial items to discuss different options until you came up with a settlement that worked well for both of you?  Then you hire an attorney incorporate your ideas for financial settlement, as well as, work through the remaining issues to finalize the divorce.  This approach would mean that you have an opportunity to resolve - financial issues outside of  court which would allow for a much less stressful, less expensive, divorce process.

A divorce financial planner can work with either party individually or work with both parties as a financial mediator.  If you and your spouse decide to proceed together, the divorce financial planner would work with you to craft financial decisions that are structured so that you both are in the best financial situation possible.  This is quite a bit different than the traditional divorce litigation model where the divorce financial planner advocates only the best interests of one party and it may seem that each party tries to get the most possible out of the other. 

The first step of the process is coming up with a clear and comprehensive picture of the family’s finances.  Once this discovery is complete, each party’s financial needs are assessed and recommendations are made based on dividing marital property and determining support (child support/spousal maintenance).  In most cases, different scenarios can be presented so that the couple can determine the best possible outcome for the family.

One of the biggest benefits of working with a divorce financial planner is that they provide financial expertise to evaluate the pros and cons of any settlement scenario within any legal context.  When they  act as a neutral advisor during the process, this ensures that the financial recommendations can be completely objective.

Many couples find that by working with a divorce financial analyst from the beginning of the divorce process, they are able to complete the divorce with less stress and turmoil, and at a lower cost than associated with traditional divorce. 

When It Comes To Divorce 50/50 May Not Mean Equal

Some people mistakenly believe that if their marriage ends in divorce that assets will automatically be split 50/50.  However, this is not the case.  Laws regarding how to split marital property vary from state to state, but there are two general systems for dividing property in divorce.

Community Property – In community property states, any assets accumulated during the marriage are split equally.  Property owned before the marriage or income produced from that property is separate.  Additionally, inheritances and money awarded as a result of a personal injury case would be separate.

Equitable distribution – In an equitable distribution states, property division should be “fair and equitable”, but not necessarily equal.  There is no set measure for what is “fair and equitable” but certain factors such as length of the marriage and needs of the spouses are considered when determining “fairness.”

Given the property laws of your state, deciding how to split assets is more than just dividing the values on paper.  People need to pay attention to the decisions they make about dividing property since they have only one shot at doing so.  Some are tempted to rush through this process simply to end the stress.  People sometimes mistakenly believe that dividing everything in half is the simplest and fairest way of handling things.  This is not necessarily true. 

First, you must understand that assets differ in a number of ways.  Here are a few questions to consider:

Are they liquid?
Are they tax deferred?
Are they tangible?
Are they risky? 

Not all decisions should be made on dollars and cents.  Sometimes people have an emotional connection to a particular asset that is worth more than the value: antiques, a house, collectibles.  These assets need to be considered in the settlement as well.

Assets also differ from paper values because of tax implications: cash is different than the after tax value of a stock, for example.  Cash is pure, but to sell a stock, you may have capital gains taxes to pay that reduce the paper value of the stock.  Similarly, assets may have costs to consider.  Let’s assume that a couple has a savings account with $300,000 in it and a house that they own out-right worth $300,000.  The assumption is that if one spouse takes the house and the other takes the cash that it would be even.  However, that is an extremely short-sighted view.  The party accepting the house should have also considered other costs such as property taxes and upkeep and maintenance.  So, while $300,000 savings account will be earning interest and making one spouse additional money, the other spouse will have extra expenses that they may not have considered.

Assets are not the only part of marital estate, so are debts.  Unlike assets, however that may be transferred easily by title without any immediate taxable consequence, debts cannot be transferred easily.  Federal law, not state divorce laws, governs most debts.  Allocating debts in divorce may mean paying them off, refinancing, or applying for new debt.  Hoping one spouse makes payments on debt in the name of their ex is at best hopeful, and at worst, risky.  Different types of debt carry different fees, charge, penalties and terms.  If debts are to be settled in divorce, it is important to do it before the divorce is final if possible.  Just because you have $10,000 left on your car loan and $10,000 credit card debt doesn’t mean that the car loan should go one spouse while the credit card debt goes to the other.  It’s just not that simple.

Even in the best of circumstances, divorce settlements are often agreed upon with limited insight into the long-term consequences.  As a result, settlements that seem to be fair and workable initially do not necessarily stand the test of time.  Therefore, it is highly recommended that a divorce financial planner be brought into the process so that you can see how decisions you make today will affect the rest of your life.