expert online series

Kathleen Miller
on Fair Share Divorce for Women



Kathleen Miller, financial planner and author of Fair Share Divorce for Women discusses the bottom line before, during, and after divorce.


Current Time: Wed Jan 7 09:59:06 EST 1998

MsgId: jcafe(1)
Date: Tue Dec 16 11:58:51 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Welcome to Divorce Central's Expert Online show. Today's guest is Kathleen Miller, financial planner and author of "Fair Share Divorce for Women." Ms. Miller will discuss what women need to know before, during, and after divorce to assure that their financial situation is as favorable as possible. Thank you for joining us today, Ms. Miller.
MsgId: jcafe(2)
Date: Tue Dec 16 12:00:17 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

By the way, for those present today, at the half-hour mark of this show, please feel free to ask questions. Remember to press pause while typing, which will take you to the next screen, where there is a blank area for typing. Then press add it.
MsgId: jcafe(3)
Date: Tue Dec 16 12:02:45 EST 1997
From: kathleen_miller
At: 12.65.20.57

Good morning- I am ready to begin- I will begin with TRUST BUT VERIFY ALL INFORMATION.
MsgId: jcafe(4)
Date: Tue Dec 16 12:03:12 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Ms. Miller, your book, "Fair Share Divorce for Women," contains just about everything a woman who is going through divorce needs to know about the financial aspects of her divorce, and her life. I would like to focus on some of the most important issues today. First of all, you place great emphasis on the importance of taking the reigns and becoming informed about the financial aspects of dirce. You talk about hiring, when possible, a financial advisor, for example, in addition to a matrimonial attorney. Can you explain why this is so important?
MsgId: jcafe(5)
Date: Tue Dec 16 12:04:13 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Pardon my typo, "dirce"--I meant "divorce."
MsgId: jcafe(6)
Date: Tue Dec 16 12:07:17 EST 1997
From: kathleen_miller
At: 12.65.20.57

One of the major reasons couples are divorcing today is because of financial issues- these reasons have surpassed sexual incompatability. If you are dealing with the economic aspects of divorce- you will need a financial expert to work with you- such issues as the division of assets- determining what is fair and equitable, what about taking money from retirement accounts, how do you plan for a disparity of earnings, establishing historical spending,
sharing college expenses, etc.
MsgId: jcafe(7)
Date: Tue Dec 16 12:09:15 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

How does one go about finding such an expert. What about your own personal accountant?
MsgId: jcafe(8)
Date: Tue Dec 16 12:14:20 EST 1997
From: kathleen_miller
At: 12.65.20.57

Your accountant is an excellent choice as one of the team of experts- they can give you historical information and also input on the tax implications of your settlement, HOWEVER, the accountant is in a difficult position as far as giving advice for the future... typically, only one of the spouses will maintain a long term relationship with the accountant- usually the one with the income and assets. We use an accountant on our team to help structure the property settlement and use the couples accountant as a sounding board for the strategy- your new accountant will be working for you to create the win-win settlement. It is critical to understand the cash flow and income tax implications of your settlement- for example- never sign your documents until you have all of the cost basis information on all assets that you will receive in the settlement, understand what the implications are regarding your selling an asset you receive in the settlement out in the future. Taxes are very important and oftentimes valuable joint planning can be done between the couples to reduce the overall income tax liability for both parties.
MsgId: jcafe(9)
Date: Tue Dec 16 12:16:44 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Now, regarding the divorce process itself, which can be more expensive than anyone imagines, how can those costs be minimized?
MsgId: jcafe(10)
Date: Tue Dec 16 12:18:39 EST 1997
From: kathleen_miller
At: 12.65.20.57

I would like to add some additional information regarding the last question. The accountant deals with taxes- not financial and investment management questions, retirement, etc. You will still need a financial expert to tie all of the financial and tax aspects of your divorce together- including cash flow- paying the attorney, getting Section 212 expense deductions for fees, implementing retirment rollovers and transfers per QDRO's.

As to where to find the expert, check with your attorney, call the Bar association in your state, check the yellow pages, and by all means interview at least 2 people, contact the IBCFP to find a financial planner (cerfitied) in your area that specializing in this planning area- ask them how many cases have they worked on, have they show you samples of their work, get references, etc/. This is a very specialized area- have they ever given expert witness testimony to the courts, worked in mediation and participated in property settlement conferences?
MsgId: jcafe(11)
Date: Tue Dec 16 12:21:38 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Thank you. That's excellent advice. By the way, to make it clearer to me, could you please put three dots after a paragraph that will continue and /ga if you have completed your thought.
MsgId: jcafe(12)
Date: Tue Dec 16 12:22:14 EST 1997
From: kathleen_miller
At: 12.65.20.57

You can help reduce the costs of your divorce by understanding the process, being very organized, keeping a detailed notebook and becoming your own paralegal. There is a lot of the work that you can do- too many times people spend carelessly at the beginning of the divorce, and then scrimp at the end when the money is most needed to bring forth a settlement. If you read my book- Fair Share Divorce For Women- I give several money saving ideas for you to implement. No one is going to take your divorce as seriously as you- you need to understand what is going on- there are financial stages to the divorce process- if you follow these one step at a time- you will become your own expert. It is not too complicated- if so- get someone else to represent you- you need to understand.

Some of your expenses can be expensed as itemized deductions on your personal tax return- Section 212 expenses.
MsgId: jcafe(13)
Date: Tue Dec 16 12:22:22 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

We will return to the issues of taxes and pension later, but for now, how do you cut your divorce costs?
MsgId: jcafe(14)
Date: Tue Dec 16 12:23:30 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Precisely what can be deducted from taxes?
MsgId: jcafe(15)
Date: Tue Dec 16 12:26:23 EST 1997
From: kathleen_miller
At: 12.65.20.57

Other cost cutting devices included_ you photocopy all of the records that will be needed by your experts- attorney, accountant, financial adviser, business valuator. Keep a log of who has gotten what paperwork and the dates- keep one or several notebooks. anything that deals with a specific asset- put in a folder. If you are organized, you will not be paying your experts to organize and re organize the data.

Get a fax machine, computer and cell phone so you can keep in touch with your process.
MsgId: jcafe(16)
Date: Tue Dec 16 12:29:44 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

What can be deducted from taxes?
MsgId: jcafe(17)
Date: Tue Dec 16 12:30:02 EST 1997
From: kathleen_miller
At: 12.65.20.57

You can deduct the costs that relate to the financial aspects of your divorce- for example, the valuation of the business, income tax analysis, cost basis... These are deemed to be ordinary and necessary expenses incurred in connection with the production or collection of income and as they relate to federal income taxation- read the description in a tax book- get your attorney to send you a letter stating what part of their bill meets these requirements. Your CPA, financial advisor, mediator, etc. may have expenses that are deductible.
MsgId: jcafe(18)
Date: Tue Dec 16 12:34:00 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

One of the most important aspects of the divorce settlement is dividing the property. Let's start with the beginning--the emotionally loaded division of household items. How can this be handled fairly?
MsgId: jcafe(19)
Date: Tue Dec 16 12:34:29 EST 1997
From: kathleen_miller
At: 12.65.20.57

A couple of comments regarding taxes- remember that maintenance/alimony is taxable to the person receiving it and deductible by theperson paying it...
There are IRS codes that allow someone to take a distribution from a qualified retirement plan- incident to divorce- without paying a pre 59 1/2 penalty. However, there are specific rules on how to do this without penalty.


MsgId: jcafe(20)
Date: Tue Dec 16 12:38:49 EST 1997
From: kathleen_miller
At: 12.65.20.57

Dividing household property can be a volatile issue- start by making a list of all the major items in your house- note if they were given to you by a family member- a gift shoudl remain a gift and not be subject to division, a family heirloom will typically go with the family line that is comes from...
If you cannot agree- then take turns choosing one item after another. If you have valuables, get them appraised- then each make choices or have either party take this value on their side of the ledger. If one person sees a high value for these personal belongings- sell them to this person and you go buy new- the high price valuation can backfire. Beware. Be aware of these divisions, however, don't let them consume you and therefore have you lose focus on the overall division of assets and the sharing of income. This should be saved for the last- whenever you get your attoneys involved in this- the costs go up.
MsgId: jcafe(21)
Date: Tue Dec 16 12:39:25 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Taxes is an important issue. Perhaps we should discuss taxes a little more before going into property distribution.
MsgId: jcafe(22)
Date: Tue Dec 16 12:41:42 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

We seem to be crossing over with our messages. It would be helpful if you let me know when you have completed a thought. Let's continue with property division, then and return to taxes later.
MsgId: jcafe(23)
Date: Tue Dec 16 12:45:40 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

What other property can be divided and how?
MsgId: jcafe(24)
Date: Tue Dec 16 12:47:08 EST 1997
From: kathleen_miller
At: 12.65.20.57

The post divorce phase is critical. You are now trying to enforce the implementation of your property settlement- it can be similar to only seeing the tip of the icebeg. Make sure that your property settlement is very detailed and explicit- judges and attorneys are sometimes too casual in this area- thus leaving you with significant legal expenses getting your post divorce plan implemented. If you are dealing with someone where there is an adversarial relationship it is particularly critical that you have a detailed plan. Areas that I see clients having problems include- the sharing of cost basis information, the transfer of assets between IRA's, the implementation and interpretation of QDRO's with qualified plans and pensions, shared record keeping used in child support payments - e.g. medical expenses, college funds.
MsgId: jcafe(25)
Date: Tue Dec 16 12:50:13 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Unfortunately, we are running out of time. I would like to at least briefly cover some other important topics. For instance, spousal support? What can a spouse who has reared the children but not worked outside the home hope to get?
MsgId: jcafe(26)
Date: Tue Dec 16 12:53:18 EST 1997
From: kathleen_miller
At: 12.65.20.57

Real and intangible property can be divided in a divorce- real estate, stocks, investments, retirement plans, future pensions, stock options, insurance cash value, personal belongings, art work, antiques, etc.

A fair and equitable settlement may not mean a 50-50 split. I have a list of some of the things taken into account to determine an equitable distribution in my book- you can call for a copy of the list. Remember the Wendt case that was just settled. He started by offering 10% after a 30+year marriage- he saw this as equitable- she thought she was a corporate partner- only to find that he viewed her as a very junior partner when it came time to divorce...
If you are the person who has a much lower earning capacity- it willbe up to you to show what is fair and equitable- this means a detailed budget that encompasses these three parts- historical spending, temporary maintenance needs during separation, and your post divorce budget...
We recommend that you enter all of your financial info- credit cards, bank statements, etc. for at least 2 years prior to separation so that you have a clear, detailed descitipion of expenses for everyone in your household...
You also might be surprised to see what you find- In working in over 3000 divorce cases in the last 15 years- I always suggest that you follow the money- one person is always planning the divorce- you have the emotional and financial baggage of the leavor and leftee...
MsgId: jcafe(27)
Date: Tue Dec 16 12:53:52 EST 1997
From: kathleen_miller
At: 12.65.20.57

Real and intangible property can be divided in a divorce- real estate, stocks, investments, retirement plans, future pensions, stock options, insurance cash value, personal belongings, art work, antiques, etc.

A fair and equitable settlement may not mean a 50-50 split. I have a list of some of the things taken into account to determine an equitable distribution in my book- you can call for a copy of the list. Remember the Wendt case that was just settled. He started by offering 10% after a 30+year marriage- he saw this as equitable- she thought she was a corporate partner- only to find that he viewed her as a very junior partner when it came time to divorce...
If you are the person who has a much lower earning capacity- it willbe up to you to show what is fair and equitable- this means a detailed budget that encompasses these three parts- historical spending, temporary maintenance needs during separation, and your post divorce budget...
We recommend that you enter all of your financial info- credit cards, bank statements, etc. for at least 2 years prior to separation so that you have a clear, detailed descitipion of expenses for everyone in your household...
You also might be surprised to see what you find- In working in over 3000 divorce cases in the last 15 years- I always suggest that you follow the money- one person is always planning the divorce- you have the emotional and financial baggage of the leavor and leftee...
MsgId: jcafe(28)
Date: Tue Dec 16 13:00:35 EST 1997
From: kathleen_miller
At: 12.65.20.57

If you are the spouse that has stayed home to raise the children- you have an uphill battle to receive long term spousal support. Start by hiring a career expert to help you determine what your current job skills are- any education that you will need to re enter the job market, etc....
You will need to create a career and financial plan that can be presented in your settlement negotiations- money will need to be given to you so that you can re enter the job market=-make sure that your career plan outlines costs as well as expected income- this is the foundation for your support request- the amount and duration. I have a sample vocational report in my book that is tied to a financial plan... Disparity of earnings is a major problem in divorces today- there is only so much money to go around- too many times the wife is competing with her own children for college funding and career opportunities... Order a copy of your personal earnings record from social security for yourself and husband. It provides an excellent historical summary of earnings for both of you and can be used in the overall settlement analysis-remember you are dividing assets and future income- you can receive a disproportiante share of each if the circumstance merit such a division- you need a detailed plan if you intend to be successul in getting such a distribution in your property settlement...
Attend a class at your local community college regarding re-entering the job market-many have a displaced homemaker program- get to some Divorce Lifeline meetings, ask your attorney for a recommendation. Go to thelibrary- doyour homework and don't sit back waiting for a fair settlement- take the offensive as did Mrs. Wendt.

MsgId: jcafe(29)
Date: Tue Dec 16 13:00:53 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Unfortunately, we are running out of time. I would like to at least briefly cover some other important topics. For
instance, spousal support? What can a spouse who has reared the children but not worked outside the home hope
to get?
MsgId: jcafe(30)
Date: Tue Dec 16 13:03:17 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Thank you so much for joining us today, Kathleen Miller. The information you presented is invaluable.
MsgId: jcafe(31)
Date: Tue Dec 16 13:04:34 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

For more detailed information on this subject, "Fair Share Divorce for Women" can be purchased through the Divorce Central Bookstore. Also, Ms. Miller, how can you be contacted? What is your web address, email, phone and fax numbers?
MsgId: jcafe(32)
Date: Tue Dec 16 13:54:22 EST 1997
From: Kathleen_Miller
At: 168.100.205.178

Thank you for having me. My web address is http://www.kathleenmiller.com/
MsgId: jcafe(33)
Date: Tue Dec 16 13:56:13 EST 1997
From: Divorce_Central_Moderator
At: 168.100.205.178

Thank you everyone for joining us today. Expert Online will be taking a break for the holidays and will return on January 6th at 12:00 noon, when attorney Elizabeth Baldwin will be discussing Breastfeeding and Visitation. Please join us then. Happy Holidays!


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