How to save money in divorce

Divorce can be very expensive.  Not only are you separating households, now working with the same funds but supporting two homes (and two rents/mortgages, two sets of utilities, expenses of duplicate furniture, etc…), but you may be taking time off work (unpaid, of course) for court hearings, spending money on filing fees, and – of course – hiring a lawyer.  And lawyers?  Can be very expensive.

I do what I can to keep the costs down for my divorcing clients, from offering flexible options for payment (no, not monthly payments but I generally try to “break down” the case into more financially-manageable pieces for the client), family law coaching, and divorce mediation, but the cost is not entirely under my control.  What my clients do – or don’t do – essentially drives the path and cost of the divorce.  So, regardless of whether you have an attorney or not, here are some ways to keep the costs of your divorce down:

1. Manage your emotions.  Divorce is incredibly difficult even in the best of circumstances.  It is likely that you have some strong emotions around it.  But the court and legal process generally will not be concerned about these emotions, and the more  you bring them into your divorce, the more you will likely pay.  Whether it’s spending excessive time with your attorney discussing the emotional issues or pursuing a losing issue because of an emotional attachment, emotions can bankrupt you when they take center stage in your divorce.
2. Get professional help. As a part of managing your emotions, get the support you need for them by finding qualified mental health professionals to help you through it.  Your lawyer, your family, and your friends will be a great support during this time, but do not mistake any of them as qualified advice helping you through the roller coaster of emotions in divorce.  Find a therapist if you need one.
3. Get – and get rid of – qualified professional help when appropriate.  Hire professionals who are going to work with you, for you, and who are on the same page as you.  If you feel like your lawyer doesn’t care, or is gouging you, or won’t pay attention to you or return your calls, then get rid of him/her.  Your divorce is yours, and you should have legal counsel that you feel comfortable with, who understands what is important to you, and who is reasonable and professional about fees.  Same with your therapist.
4. Play fair.  The court and legal process in California has no patience for bids for revenge.  Mud-slinging and nasty declarations for the purpose of hurting the other party can not only rebound and hurt you, but can cost you unbelievable amounts of money.  They also drag on the process, increase the hostility between you and your spouse, and ultimately hurt your children.

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Divorce in the new economy: Legal separation pros and cons

Divorce is an expensive business, not just with lawyers, but without them, too.  Filing fees are high (most California counties charge up to $400 to file – and that’s for each party!), plus hearings take time – and time off work.  Child care expenses may increase, and living apart means separate rent or mortgage payments, utilities, and other household expenses.

So, with that in mind, is a separation financially preferable to a divorce?  In some cases, yes, as this article explains.

Would you, or have you, and your spouse separate without filing for divorce?  Do you have a separation agreement (hint: you should!)?

Need more help?  Click here for our FREE Divorce e-Course.

Suze Orman’s divorce and finance advice

Say or think what you like about Suze Orman, she speaks her advice.  She recently weighed in on divorce and finances, and for the most part she has sound advice.

One thing I think needs to be clarified is that, in today’s economy, it can become impossible for one spouse to refinance the house mortgage in their own name alone.  In a perfect world, yes you need to ensure you get your name off the debt so you’re not responsible, but if you both want to keep the house for your own reasons (for the children’s stability, for example, or to try to wait until the market recovers somewhat), then you can include a clause in your divorce decree that makes it clear that you are not responsible for the loan.  If you can, refinance, but if you can’t, it’s not the end of the world.

Need more help?  Click here for our FREE Divorce e-Course.

Gender & divorce in California: Common themes for men

Here is the second part of our series on Gender & Divorce in California.  These are common issues that come up for men in divorce.

Gender & divorce in California: Common themes for women

There are unique issues in California divorce that generally come up for women much more commonly then for men.  Here are some common themes we see in divorce for women.  Next time we’ll talk about divorce and men.

Secrets of California divorce and finances

Divorce in California is broken down into three basic issues: children, money and property.  Here are some tips about the financial aspect of divorce.

Secrets of a divorce attorney: Why a free consultation isn’t worth the money

I came across an article recently that purported to give advice on how to select a divorce attorney.  One of the bits of advice was that most “reputable” attorneys will offer a free consultation.  I was stunned to hear this, as I think the precise opposite!  The free consultation from the divorce attorney is a loss leader, which means that it’s free because the attorney is looking for the potential client to pay the big bucks at the end of the consultation. In addition, the attorney doesn’t offer anything of value to the potential client during the free consultation.

Remember, you get what you pay for!

Many attorneys offer a free or reduced-cost consultation and the appointment goes like this: the potential client arrives and fills out some paperwork, finishing after about 10-15 minutes.  Then s/he waits another 5-10 minutes, so the actual appointment starts at least 15 minutes into the alloted “hour.”  The attorney, naturally, want to know what’s going on, so the potential client spends at least 20-30 minutes – often this is closer to 45 minutes – telling their “story” to the attorney.  So, at this point, it’s been 45 minutes to an hour, and the attorney has yet to *do* anything but sit and listen.  At the end of the consultation, the attorney says, well, yes. I can help you with that.  And the retainer will be $10,000.  Or $5,000.  Or $20,000.  So the potential client has paid nothing to get nothing but a very high retainer quote, and the client has (unless s/he has the money) wasted an hour or so of time.

Is that worth it?  Are these the practices of a “reputable” attorney?

A paid consultation can be more worthwhile, as they tend to be a little longer and involve more attorney advice and counsel.  Often, the intake sheet is sent in advance, and the “hour” spent is really an hour.

Another option is a Family Law Coach, who takes your story ahead of time (!) in the form of documents, email, faxes, a letter, etc., has the intake form completed in advance, and spends most of the full hour giving YOU real advice that you can use now.  Yes, the consultation costs, but you get what you pay for.

Which would you choose?

New Rules are in the Cards

Today’s repeat guest blogger is Sarah Tolson, a Certified Financial Planner with her office in Danville.  Her bio and contact information are below.

In 2010, the federal government issued a dizzying array of rules and reforms affecting the plastic you carry in your wallet. In case you had trouble keeping track, here are some of the important developments.

Credit cards: Under the Credit Card Accountability, Responsibility and Disclosure Act of 2009, consumers must be given a 45-day notice before any significant changes affecting their account terms can take effect. Such changes include higher interest rates, fees, and finance charges. Consumers who exceed their credit limits cannot be charged an overlimit fee without their consent. Card issuers must send statements a minimum of 21 days before the due date, which must be the same date every month.¹

Debit cards: Banks are required to have a debit-card user’s permission before they can charge overdraft fees on point-of-sale purchases and ATM withdrawals (overdrafts via paper checks and automatic payments are exempt; banks can continue to cover them for a fee without the account holder’s permission). Card holders who agree to the fees will have their purchases authorized when their accounts don’t have sufficient funds. Card holders who don’t accept the fees will likely see their over-limit purchases declined.²

Gift cards (and certificates): Issuers cannot charge inactivity fees on cards sold on or after August 22, 2010, unless the card or certificate has been inactive for at least one year. After one year, the issuer may levy inactivity fees, but no more than once per month. The money stored in a gift card must be usable for at least five years from the date the card was issued. If a consumer adds money to the card, the amount added must also retain its value for at least five years.³

1) Bankrate.com, 2010
2) National Foundation for Credit Counseling, 2010
3) Federal Reserve, 2010

Sarah Tolson, Certified Financial Planner™ recipient, is passionate about building the next generation of her family’s legacy of personalized financial planning; and she is committed to helping professionals create wealth-building plans tailored to  their age, goals, and life circumstances. Sarah joined her family’s wealth-building business to help the children of her family’s clients begin to start building their own wealth, with someone who understood their values and who would not be judgmental or lecture them like a parent. Sarah has a Bachelor of Science in Business from the Kelley School of Business at Indiana University. She joined her family’s firm in 2006 after several years in a successful retail merchandising career with Target Corporation and Abercrombie & Fitch. As an active member of the Junior League of the Oakland-East Bay and the Pleasanton North Rotary Club, Sarah participates in philanthropic work regularly. Sarah is on the Board of Directors for the Financial Women’s Association of San Francisco and helps to organize events especially for members who live in the East Bay. She is also the Vice President for the Founder’s of Success chapter of Business Network International (BNI) and a member of e-Women Network. In addition to financial consulting, Sarah is an entertaining and captivating public speaker; and she is currently writing a book about financial planning for women with young families. In her spare time, Sarah enjoys playing tennis, cooking, and traveling. 4115 Blackhawk Plaza Circle, Suite 100, Danville, CA 94506 phone:                         (925) 736-3024             / fax: (925) 736-3026 www.GirlsJustGottaHaveFunds.com   The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

Sarah Tolson is a registered representative of and offers securities, investment advisory, and financial planning services through MML Investors Services, Inc. Member SIPC. (2121 N. California Blvd. #395, Walnut Creek, CA 94596 (925) 979-2300). CA Insurance License #OF43069.