Divorce Articles Section

A Divorce Plan Case Study

Divorce isn't easy. But it can be financially fair.

Most divorcing couples really do try to arrive at a settlement that works for both partners. Unfortunately, what may look fair right now often doesn't remain equitable over time.

Divorcing couples need financial expertise.

37% of all married couples say money is the number one problem in their marriage.
In a typical marriage, the wife earns less than her husband. The family's lifestyle is quite naturally geared to the higher salary. Both partners invest in the more lucrative career.

So, when they divorce, the woman's earning and retirement prospects are often lower than her spouse's. She also loses all of her investment in her husband's career. In a few years, she may use up her entire property settlement, just to make up for the shortfall in her new life.

Meanwhile, her husband feels that he is giving away half his property and may also be paying maintenance and child support. Statistics show he generally has the ability to recover quickly. His earning potential is his greatest asset.

The power of seeing the end result.

What's missing in most divorce processes is financial expertise which can accurately forecast the long-term effects of the final settlement. Divorce planning software graphically reveals the economic consequences of divorce settlements and court orders.

This can lead to settlements between parties instead of lengthy, expensive court trials; less anger and bitterness as each party takes part in the decision-making process and less upset for the children.

Divorce planning software includes input of net income, expenses, assets, retirement pay, social security, investments, child support, and maintenance. It automatically applies formulas for salary increases, inflation, return on investment, taxes on maintenance, and recent tax law changes.

Output includes financial status, cash flow, net worth of each individual spouse, an infinite variety of settlement scenarios over a life span, and columnar and graphic formats.

Let's look at a case study

This Case Study will show you the power of divorce planning software:

Paul and Karen are 40 years old and have two children. They own a home worth $365,000 with net equity of $177,500. Their IRAs and 401(k) retirement plan total $422,500 in value. Paul earns $90,000 a year. Karen earns $18,900 a year.

Paul proposes that Karen and the children will get the house, which will be deeded to her. She will also receive $122,500 of the retirement moneys and Paul $300,000, thus dividing the assets equally. Paul will pay Karen alimony of $1,600 per month for 5 years and child support of $500 per month. He will also pay for college which will start in 4 years.

Paul's expenses include his normal living expenses, child support, alimony and college costs. Karen's expenses include support of the children and are reduced when each child leaves home.

This appears to be a reasonably fair settlement. However, an analysis creates the financial future illustrated in the following graph.

Graph I
So although the original property division may have been scrupulously equal, (as seen in Graph I) it wasn't equitable. The graph also shows that within 10 years Karen's assets are gone (including the house) while Paul's net worth has increased. (Studies show that one year after the divorce the standard of living of the woman and minor children has dropped by 27%. The man's by contrast, has risen 10%.)

Using divorce planning software, a financial divorce professional will show you the financial result of any given proposal.

Graph II
Graph II shows how more alimony for a longer period of time helps Karen while Paul is still able to increase his net worth. So it's clear that tangible assets don't last. And yet divorce courts traditionally overlook intangible assets like salaries, benefits and potential earning power.

The sample case illustrates the value of financial planning as a means of more equitable divorce settlements. If the court's intent is to treat both parties in divorce as equitably as possible, it is essential to analyze the marriage as a financial contract, with tangible investment into it by both parties.

Now Everyone Can Win

What's missing in most divorce processes is financial expertise.

That's why Carol Ann Wilson developed specialized, sophisticated computer software, so that she can project various scenarios for the divorcing couple, each based firmly on all the assets of the marriage - including career assets.

In this way, both partners have a clearer view of their financial futures. Only then can they approach a settlement that fully addresses the financial needs and capabilities of each.

Collaborative Divorce

Collaborative Divorce is divorce with resolution and dignity. You and your spouse agree with your lawyers that you will settle the case and not go to court. This is usually less costly and takes less time. It produces "win-win" settlements and allows you and your family to get through the process with less stress.

The easiest solution is also the best.

When you're ready for Carol Ann to start on your case, simply contact our office at 303-774-1225 to set an appointment. We will send you a confirmation letter with a list of items needed for your first visit. Any information you send will, of course, be treated as strictly confidential.

By using her specialized software, Carol Ann will develop alternative financial scenarios for you and your spouse. These will be detailed in narrative, graph and chart form. This detail will help you fully understand the information and put it to the best possible use.

Because the software is fully computerized, the process is quick and surprisingly inexpensive. Once Carol Ann has compiled your personalized reports, a meeting will be scheduled with you and your attorney to discuss them.

Carol Ann's considerable experience, both in and out of court, often proves helpful to attorneys engaged in negotiations. Should your settlement proposal reach the divorce courts, she can support you as an expert witness.

Now your attorney and Carol Ann Wilson, a financial divorce professional, can work as a team to achieve the best results for you.

The rest of your life begins today.

Divorce can be devasting, and emotional pain is something money can never heal. But there are ways to lessen the stress of starting out anew. With Carol Ann's expertise you can avoid burdening your new life with presentable financial pressures.

After all, the marriage may be over. But the rest of your life is still ahead of you. And with the fairest, most intelligent divorce settlement possible, you're that much closer to a better tomorrow.


Avoid burdening your new life with financial pressures.

Contact Carol Ann to speak to her about her divorce services.

 

 

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Carol Ann Wilson, LLC
Certified Financial Divorce Specialist
906 Cranberry Court, Longmont, CO 80503
Phone: 720-600-5134
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