Are people happier after divorce?

February 8, 2012

So often, when people feel trapped in an unhappy marriage, they think that their only option is to either continue suffering in a miserable home life, or to take the drastic step to get a divorce. When divorce is chosen, the initiating party typically reasons that he or she will be happier after the divorce. But how true is that reasoning? Are people actually any happier after divorce?

According to at least one study, headed by University of Chicago sociologist Linda Waite, 66% of unhappily married spouses who chose to “stick it out” and stay married, reported that just five years later their marriages returned to happy.

To find out how these once unhappily married spouses were able to restore happiness within the confines of marriage, researchers formed a focus group. They interviewed 55 of the formerly unhappy, but now happy, husbands and wives and found their responses could be organized into the following three approaches:

  1. Marital Endurance;
  2. Marital Work; and
  3. Personal Happiness.

In the Marital Endurance group, when the couple (or at least one spouse) had reported being unhappy, they also were dealing with relatively situational types of problems. Examples include job loss, bankruptcy, parenting a troubled teenager, even infidelity, in some cases. With these couples, it was mostly the passage of time that allowed for much of the marital happiness, they had once known, to return.

In the Marital Work group, couples worked proactively together; they worked hard and took matters into their own hands. With the help of a couples’ counselor (e.g., a licensed clinical psychologist; licensed marriage and family therapist; or faith based counselor), or taking part in one or more marriage workshops, these couples successfully resuscitated their marriage’s happy side.

In the Personal Happiness group, the unhappy spouse worked with an individual therapist to get to the root of what was making him or her unhappy, assuming that it was not just the marital partnership that was causing his or her despondency. In these cases, improving one’s individual happiness, also improved the happiness of the marriage.

All this sounds like great news for anyone unhappily married, but not keen on the idea of divorce. And let’s face it, no one is actually keen on divorce! Essentially, even if you are unhappily married, sometimes simply “sticking it out” can make the bad times give way to much happier ones. And, when that isn’t enough, which it often isn’t, many couples still find great success at restoring their marital happiness through couples counseling, individual therapy, or some combination of both.

Posted by Margaret F. Rearden, Esq.

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Watch out for the new 1099′s and W-2′s

February 2, 2012

Watch out for the new 1099′s and W-2′s. Great article by Tax Girl at Forbes. http://ow.ly/8Q0f2

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What Factors Influence an Individual’s Willingness to Cheat?

January 26, 2012

There are four factors that seem to have the greatest influence over whether a spouse will cheat or not. These factors are pretty basic and probably won’t surprise many people. They are the same factors that probably influence caveman and women, too. Human nature just doesn’t seem to change!

Good Looks, Charisma & Wealth – Just like the peacock, men with beautiful plumes often get their choice of pea hen.  For women, those described as “sex-pots” and “hottie’s” are often sought after by men – ring or no ring.   No new information here. That’s why people tell you that, if your middle-aged hubbie is suddenly sporting a new look, you might want to start asking some questions; and same guess for a middle-aged women. Better to marry dowdy and shrek-like than dapper and gorgeous, charming, and rich no explaination needed here.

Opportunity and Free Time – Couples that lead fairly separate lives – social lives, careers, travel – are more likely to cheat than couples that spend most of their time together.  Of course, couples that spend every minute together can get awful sick of one another and may never grow as people.  Somewhere in between suffocation and total freedom is probably best.

Risk Taking Personalities – People who like a thrill tend to get themselves involved in extramarital affairs more than homebodies and cautious people. If you’re married to one of those adventurous types, better look into couple’s sky diving or bungee jumping… or you might be in for a sad surprise.

High Sex Drive – Obviously, if you don’t like sex, you will be less likely to seek it out!  People who love sex, and those that have an “addiction” to the excitement, thrill and titilation of “the kill” are at great risk of cheating.  No matter how wonderful the sex life of a married couple, it can be hard to compete with the “new” (for some people!)

Feeling Neglected, Unappreciated – Of course, unless the cheater feels somehow entitled to a harem or stable of studs, most individuals engaged in extramarital sex are truly unhappy in their marriage.  They often feel neglected, both physically and emotionally.  They talk of being unappreciated, misunderstood and unloved. This is open door for extramarital affairs. Love the one you’re with!

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Using Divorce Clients Emotions for Positive Settlements in Mediation

January 25, 2012

Divorces are emotional.  Therefore, taking the emotions out of a family mediation and treating it just like a business transaction rarely works.  The key to a successful divorce settlement mediation is to tap into the emotions that best serve the clients’ realistic goals and their children’s’ best interests. Emotional upset does not usually contribute to positive outcomes (e.g., inability to focus, too quick to settle, too angry to negotiate), but redirection of emotions is often very helpful (e.g. passionate negative response to the break-up of a family –> passionate desire to raise happy, well-adjusted children)

Positive Emotions: Anticipation, Empathy, Joy, Acceptance, Trust

  • Helping clients stay positive, focused on the future and assisting them in seeing opportunities in their situations is very important when people are going through a divorce.
  • Family mediators should encourage empathy, especially where clients are coming to mediation after having had the empathy “knocked out of them” by the court system.
  • Keeping the mood light in mediation, smiling and even freeing up the mood for a little laughter, always helps, but cannot be pushed.
  • In a divorce mediation, there is often one party who is fully ready for the divorce, while the other is still in a bit of shock.  Acceptance may not come for a long time and often requires therapy, but good mediators can help get the “shocked person” started down the path.
  • Intense lack of trust due to adulterous affairs can threaten to blow a mediation.  There is often the question: How can I trust him/her to be forthright with the financial information when I cannot even trust him/her to be faithful?  This is a question that often needs to be sent back to the parties.The “non-trusting” spouse needs to make the ultimate decision him/herself.  There are a lot of people who, though untruthful in body, are truthful in money!

Negative Emotions: Fear, Anger, Despair, Disgust, Frustration, Surprise

  • Negative emotions need to be balanced with positive emotions (“flipped on their head”, e.g. fear of the unknown –> excitement about the opportunity to form new life dreams).
  • Negative emotions often lead to black & white thinking (not generally very creative).
  • The emotion of “surprise” is usually uncomfortable in a divorce mediatin situation.  I have seen clients make offers in mediation that they never came close to making outside of mediation (e.g., willingness to help with transportation of children, spousal support, etc.)  No matter how seemingly good the “surprise” is, the other party is often angry just because she/he has been surprised.   This is always a good time to focus on the goal (e.g., You wanted spousal support, now it looks like you are going to get it.  It doesn’t matter that it was “no, no, no” up until now!”)
  • Obviously it is best if negative emotions can be kept to a minimum.  They are often counterproductive and solicit negative feedback from other party. Balance is key.           

 Neutral Emotions: Sadness

  • Although most people would consider sadness a “negative emotion”, I put it into the “neutral” category because it is almost always present in a divorce mediation in one way or another.  It’s nice if your mediator is empathetic to your sadness, but doesn’t get too drawn in. Mediators with positive outlooks and a cheerful disposition can often be a comfort to clients and joyful people sometimes can help sad people feel a little better, though this is not always the case.

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Is My Spouse Really Hiding Money . . . or Does It Just Feel That Way?

January 22, 2012

Unfortunately, it happens.  Spouses do conceal assets.  Some even spend the entire marital estate on untoward activities and ridiculous whims and weird mid-life crisis expenditures. Some spouses even run up huge debts without telling their husband or wife – especially if these debts are from gambling, drugs, girlfriend-related expenses, etc. It happens, but you should not assume, in every case, that this is what is going on.

Divorce attorneys and forensic accountants are the masters at figuring this out.  Husbands and wives who feel that they are being hoodwinked, when it comes to the family finances, need an attorney who has subpoena powers and the ability to take the equivocator (pretty much means “the liar”!) to court if he/she fails to produce the financial documents as requested.  A litigator’s toolbox and skills are also needed if a spouse repeatedly and inadequately explains why money is “missing”, why debts have mysteriously piled up, why the suggested values of the parties’ businesses and property are so much lower than expected and/or why there are suddenly expensive assets that both appear and disappear. Be careful, however, as this is an area of litigation where the fees can add up fast and, if the money is truly gone, it is just that: “Gone!” There may be other assets to offset the missing money, etc., but if there is not, you may be spending and awful lot of time and money just to prove it. Talk with your attorney, have a goal and consider capping your attorney fees at a certain dollar amount.

Be careful, however, when aligning oneself to the notion that your spouse is being shady with the family estate.  In today’s volatile economy, what may appear to be financial shenanigans may very well just be the manifestation of the sad truth that a spouse’s business is going downhill.  Also, the values of property and business are remarkably difficult to assess these days.  Not only that, but the old adage that “the value of a business or piece of real estate is only what a person would pay for it” has never been truer than in today’s market.

Sometimes, small suspicions of asset concealment and/or debts that seem to have accumulated out of no where, are often simply a manifestation of miscommunications, misunderstandings and a lack of knowledge about the family’s money situation by one of the spouses.  A good mediator can help clients to determine the difference between a case of “hiding the goods” and a case where there is simply a very uneven base of knowledge about the family assets and debts. The former is usually a cause for a referral to the court-based system; the latter is a situation where mediation is often the perfect forum to help both parties get a grip on their financial situation as part of the settlement of their divorce disputes.

The following list includes some common ways in which a spouse may hide, undervalue or disguise marital assets[1].

Disguising Marital Assets as Method of Hiding Assets

  • Antiques, artwork, hobby equipment, gun collections, and tools that are overlooked or undervalued. Look for antique furnishings, original paintings, or collector-level carpets in your spouse’s office.
  • Cash kept in the form of cash/travelers’ checks. You may be able to find these by tracing bank account deposits and withdrawals.
  • A custodial account set up in the name of a child, using the child’s Social Security number.
  • Investment in certificate “bearer” municipal bonds or Series EE Savings Bonds. These do not appear on account statements because they are not registered with the IRS. (The government is phasing out these bonds.)

Not Reporting Receipt of Money on Tax Returns, Delaying Receipt of Marital Money

  • Income that is unreported on tax returns and financial statements.
  • Collusion with an employer to delay bonuses, stock options, or raises until a time when the asset or income would be considered separate property (upon separation in Virginia; upon divorce in Maryland and Virginia)
  • Debt repayment to a friend for a phony debt.

Misappropriation of Marital Money

  • Expenses paid for a girlfriend or boyfriend, such as gifts, travel, rent, or tuition for college or classes.
  • Retirement accounts that your spouse never tells you about.

In addition, business owners may try to hide assets in the following ways:

  • Skimming cash from the business;
  • Salary payments to a nonexistent employee, with checks that will be voided after the divorce;
  • Money paid from the business to someone close — such as a father, mother, girlfriend, or boyfriend — for services that were never actually rendered (the money is given back to your spouse after the divorce is final); or
  • A delay in signing long-term business contracts until after the divorce.

If you are planning on filing for divorce, it would be a good idea to begin getting yourself educated as to the family finances.  If you do not think that there are a lot of games being played with the money, and if you are able to sit down with your spouse, you will want to start informing each other of:

  • the location and values of all assets;
  • your family’s spending patterns;
  • the costs of health insurance for family members;
  • job potentials for each of you (if necessary, post divorce);
  • impending big expenses; and,
  • your family’s debt situation . . .

. . . more power to you. Get to it!

But, if you need the help of a third party to get things moving along, this is a great use of a mediator’s expertise.  Mediators are trained in both helping divorcing couples communicate (without screaming!) and in helping them sort through the family finances and begin planning for their futures as they become financially independent from one another.

Remember, the family CPA, banker, money manager/broker and estate planning attorney has a fiduciary duty (duty of trust) to both of you.  You should feel free to ask that person questions about your taxes, investments, etc.  If you do not want to put up a red flag for strategic reasons (i.e., you do not want your spouse to know that you are preparing for a divorce because he/she might then close down all the accounts and disappear!), get an attorney, first, before you call your financial people.  But always remember this: Sometimes your accountant is just as good a “friend” during your divorce as is your lawyer.

For a free 30 minute consultation in Fairfax, Virginia, call Robin Graine at Graine Mediation: 571-220-1998 or email robin@grainemediation.com.  If you need an attorney or CPA referral, I can help you there, too.

[1] Source: http://www.nolo.com/legal-encyclopedia/searching-hidden-assets-divorce

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BEWARE: DIVORCE IS HAZARDOUS TO SINGLE MOMS’ CREDIT-WORTHINESS

January 19, 2012

PNC bank has a new policy, I have been told by a trusty loan officer in the higher ranks of that enterprise, that child support no longer counts as income for the purpose of obtaining a home equity line of credit or small business loan.  This is true even for very large amounts of child supports. I was told, straight-up, that married female applicants whose husband’s who have jobs, earning the same amount of money as an ex-wife’s child support allotment, are much more credit-worthy than single moms who are receiving regular, provable, court-ordered child support.  Is this prejudiced against single moms?

In my line of work, I see lots of mother’s whose husbands leave the marriage — without warning.  Of course, those husbands take their jobs with them!  As a mediator, though, most of my clients are decent people that pay their child support obligations. Nevertheless, even women who have upstanding child-support paying ex’s, and are seeking a loan, can no longer count that cash-flow as part of their income.  This is absurd considering the same woman could have counted that same amount of family income as cash flow, for purposes of obtaining a loan, if she were still married to her children’s father – even if he spent that money foolishly and contributed nothing to the family.

I was also told, by my PNC informer, that no amount of money in the bank is worthy of consideration when it comes to approving a loan – unless that money is in PNC’s own coffers and can be used as direct collateral.  That means that people who are responsible and work hard to save their money and put it in the trusty hands of a good broker, are considered, at least by PNC Bank, to be a greater credit risk than people who spend every penny they have with no thought for the future. Essentially, PNC prefers loan applicants with a low-paying job, with no hope of putting anything away for the future, over a person who has a pile of dough at the ready.

This doesn’t make sense.  People are losing their jobs right and left.  There is no security in an individual’s employment.  However, if a person defaults on a loan, the bank can get a judgment against that person and garnish their bank or brokerage account.  When is the last time, though, you ever heard of a bank forcing an employer to keep a person on the payroll so that that person could pay off a loan?

And, finally, we all know that the equity in your home is worth nothing to the bank.  They don’t want your home if you default.  They have enough homes to keep them busy for a long time.  They have so many homes, that they cannot even afford to heat and cool them properly and residences across the nation are molding and rotting as a result.

So, if you want to start or grow a business with a home equity line of credit or a small business loan from your local bank – as was the norm for many, many years – forget about it, unless you have a regular paycheck, with at least a three year record of earnings– even if you have a hefty court-monitored source of cash flow, a flush bank account and tons of equity in your home.

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The Three Golden Rules for Visitation After Divorce

January 16, 2012

Spending uninterrupted time with your child or children after a divorce can be the only thing that feels right in the aftermath of  a divorce.  Though divorce is not recommended, it often wakes parents up to the idea that time with their children is precious and that their children’s youth is fleeting.  That’s a good thing. If you are divorcing and want to help your children become well-adjusted and able to handle to trials of their life ahead of them, it is important that you remember that children tend to learn from what they see, not what they are told.  They mimic what you do, not what you tell them they should do.  Therefore, in order to maximize good modeling for your children — assuming both parents are good role models — the children will need to spend time with both their mom and their dad.

There are Three Golden Rules, a far as I am concerned, as to why there should be liberal time spent with both parents post divorce:

First, time with your children will, hopefully, provide joy and pleasure for your children.  This is especially true if the non-custodial parent had been, before the divorce, sort of a “hands off” parent.  You can begin to “make-up” time not well spent in the past (at least as far as the children are concerned). Most children will just love the attention and they are very forgiving of an awkward parent learning how to cook, keep track of tiny clothes and navigate through a craft store for a last-minute school project.  Kids like to see grown-ups learning new things.  Keep your cool.  It’s fun to learn how to take care of the little things in your children’s lives and they appreciate it . . . eventually!  Beware of bigger kids, however, as they might find pleasure and joy only in things that do not involve either parent.  Be patient.  Maybe back off a little but always let your child or teenager know how much you love and admire them just as they are.

The second sound reason for  custodial care time with your child or children is to promote a parent-child relationship — a bond – that cannot ever be made up for if the opportunity is lost. Sometimes parent-child bonds do not take well.  That is a sad story.  However, if there is no opportunity presented for a bond to develop, that is beyond sad.  It is a tragedy.  The child is then without the support of one of his or her parents and that child is left to wonder why he or she has been so neglected.  Kids need both parents, if at all possible, for their developing sense of self.  Self-esteem, in other words, is very much wrapped-up in the child’s relationships with his or her parents.

Third is the ability to influence your children.  If you are a good person, this is good.  If you are bad, uh oh.  Still and yet, it is your natural right as a parent — and one of the primary reasons that people have kids in the first place: to raise them and influence their worldview, attitudes, tastes and values.    It is natural to want to have children grow up and have sensibilities that are similar to ours. Children learn by watching you navigate through your life. You are their most important teacher.

 

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Keys to Greatness

January 13, 2012

Many people choose, when they get divorced, to reassess their views on life, their personal priorities and their ways of relating to other people. There is no shortgage of self-help books to guide you in that undertaking.  But, I have often found  that the best way to learn new skills and habits is to first see how great people (e.g. leaders, thinkers, artists, writers, philosophers that you admire)  have lived their lives. 

Jacob Abbott, in his classic autobiography of Alexander the Great, made a wonderful list of Alexander’s personality traits that allowed such a young man (Alexander was only 20 when he assumed the throne of Macedononia and a mere 32 years old when he died after having conquered much of the known world at that time) to rise, so quickly, to greatness.

These Keys to Greatness — or personality traits, habits, mannerisms and relationship skills, are:

  • Being full of ardour (feelings of great warmth, intensity) and enthusiasm for all you do
  • Being calm, collected and considerate in emergencies requiring caution
  • Being thoughtful and farseeing regarding consequences of your actions
  • Being able to form strong personal attachments
  • Being finely formed in physical attributes
  • Being prepossessing (to make a positive impression on someone beforehand) in manners
  • Being athletic and active
  • Being grateful for all kindnesses shown you
  • Being considerate of other people’s feelings
  • Being faithful to friends
  • Being generous toward foes

I guess nice guys don’t always finish last. :-)

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Why You Should Not Expect Your Bank to Voluntarily Rewrite Your Loan

January 4, 2012

Many divorce clients are looking for ways to restructure their finances so that they can move on with their lives with a clean financial slate.  In this economy, that is tough going.  From what I have seen, loan modification applications get “lost” more than is statistically appropriate and there is little chance of  being forgiven or renegotiating  just about anything when it comes to banks.  In other words, “Bank Wins” is the norm.  I could not have expressed what is going on in the world of bank loan remodifications better than the following article.  See the link below for a great article to read in case you are thinking about a divorce which is based, in part, on some type of refinance/loan modification on your upside-down residence:

http://www.bankruptcylawnetwork.com/why-you-should-not-expect-your-bank-to-voluntarily-rewrite-your-loan/ via

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In a Bind? A Few Ways to Get Money from an IRA Penalty-Free

December 12, 2011

Lost your job?  Unexpected HIGH expense?  Unless you have a good nest egg put away for a rainy day, you might be scrambling for funds to cover unexpected expenses, and your IRA might be a place to look for that needed cash.

Are you aware that funds withdrawn from an IRA are taxable, and if you are under 59-1/2, you will pay a federal penalty of 10% and possibly a state penalty too?

Withdrawing funds early from your IRA will affect your standard of living when you retire.  We hope that you never have to do that, but if you do, here are a few ways to beat the early-withdrawal penalty.  (Of course, you still need to deal with the IRS and income taxes – no way to get around that)

·       Annuitize: Under IRC Sec. 72(t) you can avoid penalties by taking a series of substantially equal periodic payments until you are 59-1/2 (but not less than five years). To estimate how much you can withdraw each year, use the 72(t) calculator at Bankrate.com (See:: http://www.bankrate.com/calculators/retirement/72-t-distribution-calculator.aspx

·      Buy a Home:  If you have been renting, had alternative living arrangements, and have not owned a home for at least two years, you can withdraw up to $10,000 to buy a house in your name or in the name of a spouse, child or grandchild.

·      Pay for Education: You can go back to school, or withdraw funds for college tuition and related expenses (books, materials, fees) for your spouse, children or grandchildren.  Be aware that certain income limits apply.

·      Cover Medical Expenses: If your medical expenses (for you, your spouse or dependant) exceeds 75% of your income, you can withdraw from your IRA penalty-free.

·      Pay Medical Insurance Premiums: If you have been unemployed for at least twelve (12) weeks, and receive unemployment compensation, you are eligible to withdraw funds to pay for your medical insurance premiums.

·      Pay Back Taxes to the IRS:  If the IRS has placed a levy against your IRA, you can withdraw funds to pay the back taxes.

·      Disability: If you are “totally and permanently disabled” by IRS definition, you can take distributions from your IRA without penalty.

·      Death: Did you know that when you die, your beneficiaries must begin taking distributions from your IRA, and there will be no penalty to them.

This blog is written based on my observations and experience.  I am and not a CPA, tax planner or tax attorney.  I am a mediator and former family law attorney. All data and information provided on this site is for informational purposes only. wpthemesplugin.com makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.


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