You can find Heather here:
Balasa Dinverno Foltz, LLC (BDF)
BDF Important Disclosure Information
Show Notes:
[03:30] Heather is an owner at a private wealth management firm that manages about 4 billion in assets. She leads the Divorce Practice Group and helps people through all aspects of divorce.
[03:52] They often start by helping people hire the right team and professionals that they need. They also help give clarity on when someone should settle.
[04:15] They also help people understand the agreement and audit the agreement on a yearly basis. Then they help people create the next chapter of their lives on their own terms.
[04:32] Heather went through a divorce 8 years ago. After getting divorced, Heather realized that there was so much more they could do to help divorcing men and women.
[05:52] They help people make decisions and also help people know when they don’t have to make a decision.
[06:17] After the divorce is done, they are a key partner for financial decisions going forward.
[07:15] The first thing people should do post-divorce is remain kind to themselves and have grace.
[08:02] After a divorce, there is time for all of the emotions that you couldn’t deal with during the process to come up. The ripple effect is often overwhelming and unexpected. The first thing you should do is pause and understand that this is normal.
[08:59] The marital settlement agreement is the key document on the financial perspective. This will detail property settlement, income, and obligations. It’s a good idea to go through this document one more time with your attorney.
[09:28] It’s important to have a road map and an ongoing audit.
[11:02] If a couple works with a good team during the marriage, it’s possible that they can keep that team. Sometimes both spouses will need a higher level of expertise.
[13:46] With assets and investments you really need to understand how things are titled. You also need to be aware of the tax ramifications before transferring assets.
[14:25] Set up a taxable account in your name or in your trust. Then you will probably need an IRA and all paperwork so your advisor knows how to transfer things properly.
[15:34] It’s critical that people understand what is still in their name and keep getting credit reports and following up after a divorce.
[16:50] Make sure joint accounts are closed, so you are not liable to a credit card company. Don’t just look for a zero balance you want it to say account closed.
[20:56] It’s also important to work with a mortgage professional who is experienced with divorce.
[22:38] A qualified domestic relations order or QDRO is a government provision that allows retirement accounts to be split without tax ramifications.
[23:58] You will need a specialist, because there are plan specific rules.
[32:06] Strategies for estate planning. Hire a professional. Power of attorney is for healthcare and finances. Most people don’t change wills and trusts during a divorce process. After your divorce, update your power of attorney and wills and trusts.
[37:22] It’s also important to have a provision for life insurance in case of disability or death. Sometimes insurance is required by the settlement agreement.
[40:33] According to COBRA laws, a divorced spouse can continue their insurance coverage for 36 months. Even if the employee’s spouse leaves.
[42:05] Most states also have spousal continuation.
[46:15] Splitting assets is an adjustment. Heather encourages couples to have healthy conversations with their children about money. They need to know how things might change and what the budget looks like.
[48:18] Once you get through the divorce, you need to understand what cash you have available. You should have at least six to twelve months of living expenses as an emergency fund.
[49:16] A financial affidavit is also a really important document for your financial advisor to see.
[50:07] There are a lot of potential tax ramifications with divorce. Make sure your tax attorney gets a copy of your MSA.
[51:29] With new tax laws, it’s more important than ever for CPA’s to understand the MSA.
[52:11] Capital gains is owning an asset for more than a year and getting a lower tax rate which is typically 15%. Ordinary income is taxed at your marginal rate or highest rate from your tax bracket. It’s important to hold assets if you can.
[53:23] If you are receiving taxable spousal support, you qualify to make an IRA contribution. This empowers a divorced spouse and lets them know that their contributions are important.
[54:49] With the new tax laws, this contribution won’t be possible.
[55:31] Make smart decisions one-step-at-a-time to create the next chapter in your life.
Do you have any topics that you would like me to cover in future shows? Let me know in the comments below. Don’t forget to subscribe to the show, and if you are enjoying what you hear please leave a review on iTunes.
Links and Resources:
Balasa Dinverno Foltz, LLC (BDF)
BDF Important Disclosure Information
Divorce Planning: Splitting Assets in a Divorce by Heather Locus
Post Divorce Financial Checklist
Webinars:
When I Do Becomes I Don’t: Five Strategies for a Financially Responsible Divorce – best for families at beginning or middle of divorce ~ 25 minutes.
The Financially Responsible Woman: Five Strategies for a Full Life – perfect for women who have just finalized a divorce or any woman who wants to take control of her finances ~ 12 minutes.
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