Divorce Planning - Frequently Asked Questions

As a neutral financial professional, AJW works with couples to collaboratively problem-solve financial issues. Each party’s interests are taken into consideration, with the ultimate goal being a mutually acceptable settlement.

AJW’s services can be retained to work with one party in the divorce. In this role, AJW works as a problem solver, as well as helping to educate clients on the impact of various settlement options.

AJW has worked on over 300 collaborative divorce cases. AJW has a depth of experience in working with families to reframe their finances as they work through their collaborative divorce.

AJW has worked on many mediation cases as a neutral financial professional along with the mediator, to help families restructure their finances. They have also teamed up with the client and their attorney as they move through the mediation process to help evaluate options that are generated during mediation.

A neutral financial professional helps families and individuals work through the financial elements of divorce. Financial neutrals are often financial advisors and CPA’s who have specialized financial knowledge. Often a neutral financial professional may have some mediation training but it is not a requirement. Mediators are required to complete a five-day training in order to receive mediator status. Mediators are trained in helping couples overcome impasse in the divorce process.

AJW can provide expert testimony in court, although AJW prefers to work in collaborative and mediation cases where both parties are focused on arriving at a mutually acceptable settlement.

In a directive approach, your financial information is laid out and then AJW provides an opinion in regards to the manner in which to structure the financial settlement.  In a facilitative approach, AJW guides the husband and wife through a process where all the data is collected, identifies the issues, generates options, and then numbers are run to help the parties evaluate the options. In a facilitative approach, the parties make a final decisions on how to structure their finances going forward post divorce.

The first step is to contact AJW at 952-405-2000.  One of the AJW divorce professionals will take your phone call and help schedule an appointment for both you and your spouse. You can either set up an initial phone call or an in-person meeting to learn more about working with AJW in a neutral financial professional role.

AJW will work with you and your attorney to help educate you on investment and tax issues so that you better understand your settlement options.  AJW will also work with you and your attorney to put together different settlement options to consider. We will run the numbers to help you understand the impact of a settlement offer and whether or not it will meet your needs long-term.

There are three main financial areas to consider as you work through your divorce. First is the property division. As you work through the property division, you will want to consider the growth potential, tax consequence and liquidity of each asset. Second is budgeting. It is important to understand what your monthly expenses will be for you and your children post divorce. Third are taxes. You will need to understand how your taxes will change and how they will impact your settlement (e.g. what should your filing status be? What is the best way to structure your child exemptions? How will family support effect your tax situation?).

Typically, when working with a neutral financial professional, it is best protocol for the financial professional not to meet one-on-one with only one spouse. This is to help ensure transparency of the process and that both parties have access to the same information. However, in certain situations, it may be helpful to have a separate meeting with a neutral financial professional to help move the divorce forward. This can be done as long as the other spouse and their attorney are in agreement. In these situations, the notes and reports from the meeting are shared with all team members.

When working with a neutral financial professional, transparency is key. When you communicate with a neutral financial professional, make sure that your spouse is aware of the communication. For example, if you e-mail information to AJW, or ask questions related to your financial situation, it is important to copy your spouse so that the financial professional can reply "all" to ensure that you are both in the loop with the response.

One of the most important things that AJW does during the divorce process is to make sure both spouses are educated on their investment options. AJW is able to explain things in a straight forward manner, which helps less knowledgeable spouses understand the impact to their investments and the tax consequences resulting from different settlement options.

AJW has the experience, skill set and technology needed to evaluate settlement options and provide feedback regarding the impact of the option(s).

AJW has the experience, skill set and software to take a settlement offer and put it into a long-term projection to help illustrate what it will look like if you accept a settlement today and what it will look like years into the future. This may be important information for you to have before you make your final divorce decisions.

The best way to approach whether or not you can afford to keep the house is to have a good understanding of your monthly expenses going forward. It’s important to make sure that you can meet all of your needs, including your housing needs. AJW can help you put together a budget, explore various housing options and run tax projections to explore the tax savings obtained by owning a home.

Often it is helpful to understand historical spending to help project expenses post-divorce. Historical spending may not always drive expenses going forward, but it is useful information to have. Putting together accurate monthly expenses is the foundation of a solid financial plan post-divorce. It’s important to make sure that you put together a workable solution, so having historical numbers is a good starting point to help make sure projected expenses are realistic.

Every situation is unique and there are many variables that drive how the divorce process may play out. To receive a general quote, or for more information, please call AJW at 952-405-2000.

Often when you work with a neutral financial professional, you save attorney costs because we complete the financial work that attorneys would otherwise do. You have one professional doing the work that two attorneys might do. You can also save divorce costs by compiling your information in an organized format and providing it to AJW ahead of your meeting. Providing the data well in advance of a working session allows AJW to block off case prep time to more efficiently work through your divorce case.

There are many different divorce processes, all with different associated costs. One typical process is litigation. Divorce cases that go to court will be the most expensive and can possibly reach six figures for each spouse. Even litigious cases that never reach the court room can be as expensive.

Another process is collaborative divorce and complex mediation cases. These processes are characterized by the fact that most of the decision making is put into the hands of the parties involved. The process will be less expensive if the couple is good at communication and able to make decisions together. Complications usually arise when dealing with difficult issues, but a collaborative case will generally be expected to be significantly less expensive than a litigated case. Costs are directly related to the quality of communication and follow through of the couple.

You do not necessarily need legal representation when going through a divorce, although we recommend that you always work with an attorney. At AJW, we believe that everyone should consult an attorney to ensure you understand your legal rights and obligations.

Spousal maintenance, also referred to as spousal support, is a series of payments from one spouse to the other, for a specified time-frame after a divorce. The purpose of maintenance is to help balance the earning abilities of each spouse so that they maintain a similar standard of living post-divorce.

It depends on whether you are making or receiving the payment. Spousal support is tax deductible if you are making the payment, as long as it is within IRS guidelines. If you are receiving the payment, it is taxable.

An upfront lump-sum cash payment or awarding more marital assets could offset spousal support. This eliminates the risk of relying on the ex-spouse to pay in a timely manner.

AJW can assist you with understanding the financial and tax impact of diverse settlement proposals covering asset distribution, debt assignment and spousal/child support.

All assets are different, some continue to grow and gain value while other assets require money for upkeep. Businesses and retirement accounts will continue to grow, but homes and automobiles necessitate upkeep. Costs must be considered when contemplating a settlement. Certified Divorce Financial Analysts are experts in assessing these situations, and we will help you navigate the complications of asset distribution.

Often the custodial parent will want to keep the house. We help analyze the associated costs, factoring in mortgage payments, taxes, inflation and maintenance. Once determined, we assist you in making the best possible decision for your specific situation.

A Qualified Domestic Relations Order (QDRO) is a required legal document, in addition to your divorce decree, that divides up qualified pensions and/or retirement accounts.

If you have been married 10 or more years, you are entitled to either half of your working spouse’s Social Security or your own benefit, whichever is greater. Your spouse still receives 100% of their benefit.

The answer is yes and no. When AJW works with you in a non-neutral role during your divorce process, you can continue to work with AJW as a financial client. However if AJW works as a neutral in your divorce process, we cannot work with you post-divorce, unless the other spouse signs a waiver of consent. This ensures fairness to both parties during the divorce process.