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Getting a divorce can be a stressful and unsettling experience, but there are ways you can take control of the situation. Determining the accurate figures of your family finances can be a complicated undertaking, but it is important to have this information as it impacts your final divorce settlement agreement. The Courts will use your financial statements when deciding division of property, spousal maintenance, and child support, so it’s critical to have the accurate numbers. Here are key things to keep in mind as you plan for your divorce.

1. Get a copy of your credit report

Once you have decided that you are ready for the divorce process, you should immediately get copies of your credit report. This is especially important if you need to know the balance of your mortgage and home equity loan. Make sure to get the credit reports for all accounts, whether those are in joint names or individual names.

2. List all your assets

If you are anticipating a divorce, make copies of the statements for all of your bank accounts, retirement accounts and investment accounts. Just like the credit reports, it doesn’t matter if these accounts are in joint names or individual names. As long as assets were acquired during the marriage, these assets are subject to equitable distribution.

3. Know your incomes

Knowing exactly what your incomes are will help determine the interests and dividends you are entitled to when the divorce is finalized. As a general rule, you should make a copy of at least the last three years of income returns. If you or your spouse own a business, it is a good idea to make sure you have up-to-date company tax returns, income and loss statements, and all pertinent company financial documents. 

4. Keep track of monthly expenses

Divorce is not only an emotional ordeal, but also a financial one. To help prepare you for the wave of bills you will have to pay, you need to get a handle on your monthly budget. This will help you see where you are overspending and where you can cut back, so that your extra money can be put into savings.

Getting the exact figures for your income, expenses, assets and liabilities can feel overwhelming, but this preparation will give you the information you need to begin the process of divorce. Your attorney will need this information to be able to negotiate on your behalf and to finalize your case.

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In the recent decades, a growing number of adults ages 50 and older have gone through divorce. According to a study by researchers from the Bowling Green State University, the number of divorce cases between older adults has doubled between 1990 and 2010.

Susan Brown, the researcher who led the study, notes that reasons for the rise in divorce rates include more women in the workforce, longer lifespans, higher rates of remarriage and changing notions about marriage.

Divorce is a very painful and stressful process, and it can be especially so for people who are older. There are challenges to “gray divorce” that are different from couples who split before their 50s. If you find yourself contemplating divorce at an older age, here are some tips you can follow to make the process easier.

1. Hire a team of professionals as needed

When you are planning for divorce, the first thing you should do is get a team assembled to guide you through the process. This team includes an attorney, financial planner, accountant, mediator and therapist. Your attorney can help you by recommending professionals for your specific needs. Many times, some of these resources are already available to you and they can work directly with your attorney. In a gray divorce, the role of the financial expert is particularly crucial. Having been married for so long, you have acquired multiple assets together as a couple. In addition, retirement finances can be tricky. A solid team will help you make more objective decisions in the midst of an emotionally trying time.

2. Think about your health

Healthcare can be very expensive – especially so in retirement. So if you are planning for divorce, you have to think about health insurance post-split. After your divorce, you won’t be eligible for your ex spouse’s employer plan. You can consider long-term care insurance that would cover the expenses needed for a stay in an assisted-living facility, or at-home care.

3. Rewrite the important papers

When you get a gray divorce, you have to update all of the important legal paperwork that you’ve set up during your marriage. These papers include your wills, estate plans, bank accounts, deeds and beneficiary designations for retirement accounts. If you fail to update your legal agreements, most states will invalidate your will. So don’t neglect the details and talk to your team of professionals to help you rewrite all the paperwork.

4. Decide where you want to live

One big factor in a split between older couples is who gets to keep the family home. It’s particularly hard because a family house is associated with decades of memories. It makes sense if you want to fight for it, but you could also consider alternatives like selling the home. What is important is that you have to be open to compromise and be creative about your future plans. This will ultimately help you moving forward.

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If you are looking for reasons not to get married, then here’s one from the Internal Revenue Service (IRS). Thanks to a recent evaluation of an existing ruling, unmarried couples can now effectively deduct twice as much of their mortgage and home debt than married couples.

A Tax Break for Couple Who Haven’t Tied the Knot

A year ago, a lawsuit filed by domestic partners Bruce Voss and Charles Sophy in California challenged the IRS’s mortgage-deduction rules. Voss and Sophy owned two properties together, and were about $2.7 million in debt on their houses and were paying a combined interest of about $180,000 every year.

The current tax code allows taxpayers to receive a reduction in mortgage debt for up to $1 million, and up to $100,000 in home equity financing. But when Voss and Sophy each tried to deduct their debt, the IRS said the $1.1 million limit had to be applied on a per-residence basis.

Voss and Sophy sued, but the tax court decided to side with the IRS. The couple appealed to U.S. Court of Appeals for the Ninth Circuit, and the Court of Appeals overturned the ruling, claiming that a closer reading of the tax code entitled the men to separate deductions. In other words, the unmarried Voss and Sophy were each entitled to receive a $1.1 million deduction limit.

Bigger Tax Deductions for Unmarried Couples

The ruling no longer applies to just Voss, Sophy, and other taxpayers under Ninth Circuit jurisdiction. This month, the IRS made the ruling applicable to all taxpayers nationwide.

This ruling could potentially pose a dilemma to couples who are planning to be married, because getting married enforces the implementation of the $1.1 million limit to deductions in mortgage and home debt. But if you decide not to marry your partner, you can deduct up to $2.2 million in mortgage and home debt.

The ruling also applies if you want to purchase property with a friend or family member. It is worth noting, however, that purchasing a home with a friend, loved one, or unmarried partner is risky if you eventually break up or fight.

“When you’re an unmarried couple, you don’t have protections,” said lawyer and Marcum partner Janis Cowhey. “As far as the law is concerned, you’re legal strangers.”

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According to a new research from University of Washington sociologists, March and August are the two months in a year when divorce filings peak. This research analyzed data from the past 15 years in the state of Washington and found a pattern of marriage breakups that suggests that family rituals around winter and summer holidays largely affect decisions of divorce.

Why Divorce Spikes in August and March

Associate sociology professor Julie Brines, PhD and doctoral candidate Brian Serafini did not set out to discover the seasonality in divorce rates. The two researchers intended to study the effects of the 2012 recession on marital stability, but when they looked at divorce filings from 2001 to 2015, they discovered a consistent pattern of breakups happening right after the winter and summer holidays.

Brines and Serafini presented their working paper at the annual meeting of the American Sociological Association in Seattle, and suggested that divorce is governed by a “domestic ritual” calendar where holidays are viewed as sacred to families.

“Family life is governed by a ‘social clock,’” they write, “that mandates the observation of birthdays, holidays, or other special transitions involving family members over the course of a year.”

This means that couples may see the holidays as “one last shot” to fix their relationships and start over. “People tend to face the holidays with rising expectations, despite what disappointments they might have had in years past,” Brines said. “They represent periods in the year when there’s the anticipation or the opportunity for a new beginning, a new start, something different, a transition into a new period of life.”

Unfortunately, the holidays often don’t live up to those expectations and couples find that their differences are irreconcilable after a big trip.

Brines and Serafini suspect that couples need some time to hire lawyers and get their finances in order, that is why there is a gap between the New Year’s and the spikes in March. The same logic can be applied for the spikes in August, which happen a month or two after summer vacation.

Further Studies on Divorce Patterns

Brines and Serafini hope to extend their research to other states to see if their research hypotheses will hold for a larger sample size. So far, the two researchers have looked into Florida, Ohio, Minnesota, and Arizona. Despite the differences in demographics and economic factors, Brines and Serafini find that couples from these states share the seasonal divorce pattern.

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Getting a divorce not only takes a toll on your emotions, but it also impacts your retirement savings. Thankfully, if you are divorced but your marriage with your ex-spouse lasted at least a decade, you are entitled to receive social security benefits on your former spouse’s record even if he or she has already remarried.

How Retirement is affected after Divorce

A previous marriage that lasted 10 years or longer entitles you to one-half of your ex-spouse’s full retirement amount (or disability benefit) if:

  • You are 62-years-old or older.
  • You are unmarried.
  • The social security benefits you are entitled to receive based on your own work are less than the benefits you would receive based on your former spouse’s work.

If you remarried and that marriage has ended – whether by divorce, annulment, or death – you may still collect on your former spouse’s record. If, however, you are still married, you generally cannot collect benefits on your ex’s record.

Note that the amount of benefits you get will does not change the amount of benefits your former spouse – or his or her current spouse – may receive.

Collecting Social Security Benefits after Divorce

According to the Social Security Administration (SSA), you may start receiving benefits on your ex-spouse’s record if you have been divorced for at least two years, even if he or she has not applied for retirement benefits yet.

If you are entitled to your former spouse’s benefits and your own retirement benefits, the SSA will pay the retirement benefit first. If your ex’s record is higher, you will receive an additional amount so that the combination of the two benefits equals the higher amount.

Note that if you are at full retirement age and were born before January 2, 1954, you have the option to receive only your former spouse’s benefit and delay your own retirement benefit for a later date. If, however, you were born January 2, 1954 or later, this option does not apply. Once you file for one benefit, you automatically file for all retirement and spousal benefits.

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A recent study by a professor based at Harvard University has found that a husband’s employment in an opposite-sex marriage is a major factor in divorce. In marriages before the mid 1970s, the most prominent factor in the risk for divorce was a husband’s share of housework. After the 1970s, however, there has been a shift from the share of housework to employment status. It is worth noting that the study did not cover same sex marriage, nor did it address men who choose to stay at home with the children.

Employment Status as a Divorce Risk Factor

Using data from the 1968 to 2013 waves of the Panel Study of Income Dynamics, Harvard sociology Professor Alexandra Killewald set out to examine and predict divorce risks in opposite-sex marriages. In doing her study, Professor Killewald sought “how the roles and responsibilities in marriage changed over time and influenced the chance of divorce”. Her study found differences in marriages prior to 1975 and in marriages after 1975.

Professor Killewald looked at the various aspects of a couple’s working life, such as employment status, willingness to do housework, and differences in finances. She also used a large set of census data to predict wives’ economic dependence on their marriages and how much they would lose if they go through with divorce.

Professor Killewald examined 46 years of data on more than 6,300 married opposite-sex couples in the United States. She found that couples married before 1975 were likelier to get a divorce if husbands and wives shared housework equally, because husbands saw equal domestic work as a threat to their traditional breadwinning role in the household. After 1975, the sociology professor found that housework hasn’t been much of a factor in divorce, instead, the husband’s job has.

Professor Killewald found that since the mid 1970s, husbands who have full-time employment have a 2.5 percent chance of getting a divorce. This percentage is lower than the 3.3 percent rate for husbands without full-time employment. In other words, husbands without full-time employment are one-third more likely to split up with their wives than those with full-time jobs.

Economic Independence of Women: Not a Risk for Divorce

The Harvard professor also found no strong evidence that the economic independence of women can increase divorce rates in opposite-sex couples.

“That’s surprising,” said New York University sociology professor Paula England, but she also stated that she found Killewald’s methodology very sound and its conclusions convincing.

England added, “I’m sure that financial strain hurts people’s well-being, but it doesn’t seem to be causing marriage breakup.”

Professor Killewald’s study on the factors affecting divorce in opposite-sex couples was published in the American Sociological Review.

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Thanks to the Supreme Court’s ruling on Obergefell v. Hodges, same sex marriage is now recognized in all of the U.S. states. This means that same-sex couples now have the right to all the benefits that opposite-sex couples have always received.

So what does that mean for all same-sex couples out there? It means that you should apply right away for the benefits that are now within your reach. Here are some of the most important financial items you should know about in light of the changes following Obergefell v. Hodges.

Social Security Just Got Bigger

Social Security’s spousal benefit gives all married partners flexibility in planning for retirement. For example, higher-earning spouses can enable their lower-earning spouses to collect benefits.

If a primary wage-earner becomes disabled, Social Security provides assistance through spousal disability benefit.

You may also be allowed to receive survivor benefits if your spouse passes away. You may receive it at age 60, or at age 50 if you are disabled, or at any age if you are looking after your deceased spouse’s child.

Speaking of children, kids of same-sex couples have been profoundly affected by the ruling, which overturned the Defense of Marriage Act. Now, children of same-sex couples also have access to programs that are designed to keep them away from poverty through economic support if parents are no longer able to provide for them.

Update Your Employer-Sponsored Retirement Plan Beneficiaries

As an employee, you should update the beneficiaries of the retirement plan sponsored by your private employer. Retirement plans should provide all couples mandated spousal benefits and consents. This means that all same-sex spouses are now eligible to receive retirement and medical assistance.

Keep the Whole Family Healthy with Improved Health Insurance

While you are updating your retirement plan, you should also review your health insurance plans. Now that sex-sex marriage is legal in all states, no health insurance company can deny coverage to same-sex spouses.

Get to Know Your Taxes Better

Same-sex couples are now required to file federal income tax returns under the status “married”, whether or not these are filed jointly or separately. Under the “married” status, you can transfer properties to your spouse without paying for estate taxes, saving you thousands of dollars.

Same-sex spouses are also now able to give gifts to one another, without needing to pay for state gift taxes.

Get Your Legal Documents Up-to-Date

Lastly, you should update all your legal documents such as wills, trusts, and other estate planning documents to ensure that your spouse is duly recognized by the law and can claim the benefits that go along with it.

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Contrary to popular belief, it’s not at all that easy to pin down the exact divorce rate in the United States. Although many people would have you believe that as much as 50 percent of marriages end in separation, the actual percentage is much lower. In fact, the results of a study published in the New York Times in 2014 show that the number of divorces peaked in 70s and 80s, and has been in decline ever since.

However, this isn’t exactly true for all age groups. Although the overall divorce rate has been in decline, it’s actually on the rise among the Boomer generation, or couples over 50-years-old. These divorces are so common that the phenomenon has been referred to as “gray divorce.”

But how is this divorce trend different from other types of separations?

Gray Divorces are More Expensive

Younger couples have more time and leeway to recover from the financial damage of a divorce. After 50, it’s much harder to recover from the financial impact of a legal separation. As a result, couples who divorce later in life are at a financial disadvantage and at a higher risk of falling into poverty.

Women are Especially Vulnerable to Financial Difficulty After a Gray Divorce

Statistically, women over 50 are more likely to have taken time off from work, or work as stay-at-home-moms, compared to men who are more likely to be employed. This places men in a better position to weather the instability during and after the divorce proceedings.

One study reports that more than 27 percent of gray divorced women face poverty, compared to 11 percent of men in the same age bracket.

How Women Can Protect Themselves in These Cases

If you’re an older adult facing this problem, there are a number of things you can do to protect yourself during and after a gray divorce.

  1. Maintain a separate savings account and credit line Women are especially advised to set aside money their partners can’t access, a savings account for example;
  1. Diversify your insurance policies – Many people understand the need for health insurance, but in your 50s, it would be wise to diversify your policies and include life, property, disability, and long-term insurance;
  1. Check where you are with your retirement fund – Although women have longer retirement periods and cost more than men’s, women on average have lower retirement funds. Pay attention to your financial security and make the appropriate corrections when you see red flags;
  1. Know your Social Security rights – Women who have been married for 10 years or more and are currently divorced can claim Social Security Benefits. However, the amount depends on their ex-spouse’s earning records;
  1. Be ready to make a lifestyle change – One factor that causes women to fall into poverty after a divorce in their 50s is the inability to make a lifestyle change. If your income was severely affected after a divorce, you need to learn to live within your means, pay off any outstanding debt, and maximize your savings.

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People get married because they love each other and get married to show the commitment they have for each other. But, what happens when things don’t work out? No marriage bond is absolutely break-proof. Divorce can happen to anyone at any time. We take precautions for everything else. We buy insurance for our cars, jewelry, electronics, why not our marriage too?

Too often we hear that preparing a prenuptial agreement or even considering one is like “planning for failure in your marriage” or “if you have to plan your divorce before you get married, don’t get married.” But, why does it have to be this way? It doesn’t.

Prenups are good for everyone – they don’t discriminate!

Prenuptial agreements (prenups) aren’t meant to “doom” your marriage. Prenups can cover a wide array of items that are important to you, such as your property, retirement, and financial accounts. They can essentially fix financial issues that could arise in your marriage before they actually do. A prenup can help protect your assets that you’ve worked so hard for. Or maybe you are both just starting out in your careers but estimate to acquire a significant amount of assets throughout the course of your lifetime. A prenup can detail how business(es), investments, and any bank accounts and assets, if acquired, will be managed

Moreover, prenups are not exclusively for the “wealthy” either. Prenups can help to protect not only your assets but to also ensure that should you pass before time, your assets/estate goes to the person or people you intended. This is especially important for people who are entering into a second marriage and have kids from a previous marriage as well. Who do you want to benefit from your estate? Equally or unequally? A prenup can outline this simple issue.

Prenups can also help to protect you against debt. Once married debt acquired is marital debt. It means it becomes your debt, we are after all, in Texas, a community property state.

What if it turns out that your spouse has a gambling addiction which s/he forgets to tell you about until it’s too late?  It’s better to prepare rather than spend the rest of your life trying to pay that debt off. The cost of the prenup will definitely be less expensive than hundreds of thousands spent without the protection of a prenuptial agreement.

The elements of a prenup…

In order for your prenup to serve its purpose:

  1. Both parties have to agree to give “full disclosure” of each one’s liabilities, income, and assets. You have to do the best to avoid a claim of fraud, duress, and or misrepresentation.
  1. Each contracting party must hire their own attorney to. Your attorney will draft your prenup and your spouse’s attorney will review the terms of the agreement to help avoid any misunderstanding(s).
  1. The agreement must be in writing, signed by both parties and their respective attorneys, and the agreement must be notarized.

Don’t procrastinate!

If you find yourself considering having a prenup drafted, don’t wait until the week before your wedding. Sure, there are much more fun things to think about when wedding planning such as the bachelor/ette party, cake tasting and venue searching, but find some time to talk to your attorney about a prenup as well. Considering each party will need to find an attorney to review the prenup you’ll need to have it ready way ahead of your wedding day to review it as many times as necessary without the stress. Remember you do not want to pressure your new spouse or be pressured into signing anything without the time to review.  Drafting a fair and enforceable prenup agreement takes time. The longer you wait, the higher the risk that one of you will be unhappy with the agreement and not be able to resolve it in time. The levels of stress will increase. Why put that damper on your wedding if it’s unnecessary? Continue reading →

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In a divorce proceeding, a separating couple sharing a real property—usually referred to as the “marital residence” may agree to divide and sell the property and split the proceeds and all of their shared assets, or sometimes the parties agree or one party is awarded the marital residence, and all debt associated with it.

When one party is awarded the marital residence or the parties agree that one party will keep the marital residence or any real property, the party keeping the property maintains the responsibility for the note (mortgage) on that property. And while these terms may seem clear-cut, it’s not unusual for problems to come up.

Preventing Liability

An example of a problem that turns up before it’s too late involves liability issues over the property, specifically, how to keep the other spouse from still being liable for the mortgage and other liens on the former marital residence.

Because of a volatile economy and a recovering real estate finance industry, several mortgage companies will outright refuse to release someone from mortgage liability based on divorce, even if the divorce decree clearly states that person is no longer liable for any loans on the property.

Furthermore, Texas law indicates the courts don’t have the power to force banks to allow such a release of liability. As such, it’s common for divorced spouses to still be liable on the mortgage of a house they technically no longer own.

Enter the Special Warranty Deed and Deed of Trust to Secure Assumption

This is where the Special Warranty Deed, combined with a Deed of Trust to Secure Assumption, comes in.

Special Warranty Deed Explained

The spouse giving up the title of the property, also known as the Grantor, uses the Special Warranty Deed to transfer all legal title on the house to the other spouse awarded with the property, known as the Grantee.

The Grantor affixes his signature on the Special Warranty Deed in front of a notary, effectively granting to the Grantee all interest in the property the Grantor had. Simply put, the Grantor gives up all ownership and legal interest on the house.

Provided the Grantee will commit to making all payments on the mortgage in the future, doing so on time, every time, the Special Warranty Deed should be enough. But even if you can trust your ex-spouse’s promise to take care of all future payments on the loan, you still shouldn’t risk putting your financial in someone else’s hands. You can never be sure the Grantee will make all payments, not necessarily out of malice, but possibly due to financial instability.

To prevent any further issues, the Grantor can execute a Deed of Trust to Secure Assumption as a means of protection against any future liability on any loans against the house.

One flaw of the Special Warranty Deed is how it doesn’t affect your liability on a mortgage from a third party company—you’re still liable for missed payments if your name is on the note.

Deed of Trust to Secure Assumption Explained

The Grantor can execute a Deed of Trust to Secure Assumption, a document signed by the Grantee to confirm the Grantor as a Beneficiary.

The Deed of Trust outlines the terms agreed upon by both parties as enforcement should the Grantee default on the mortgage. If the Grantee fails to repay the Grantor or the mortgage lender, the Grantor can choose to foreclose on the house like any other lender. The Deed of Trust puts responsibility on the shoulders of the Grantee to assume all liability for any debt against the property, but allows the Grantor to return and take over payments on the debt to protect his interests.

In cases like this, should the Grantor pay the lender for any of the debt assumed by the Grantee, the Grantee must repay Grantor for all expenses, including lawyer’s fees and other additional costs incurred by the Grantor.


The combined use of the Special Warranty Deed and the Deed of Trust to Secure Assumption is one of the best solutions to circumvent the issue of one spouse being held liable on mortgage payments after dissolution of their marriage.

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