By Guest Blogger, Angelique Ayala
Everyone plans to retire. Most would like to retire sooner rather than later but, unfortunately, that doesn’t always happen - especially when divorce comes into the picture. We all have a picture of retirement in our heads.
Having a preschool aged child is a lot of work. Getting divorced when you have a preschooler presents even more challenges. This article will help parents make compassionate choices when dealing with their preschooler’s pre-divorce angst and when making child custody determinations.
For many individuals, getting divorced forces them to dive deep into the world of personal finance . . . sometimes kicking and screaming. It is a necessary part of everyday life, though, and everyone needs to have a decent understanding of money. As a divorce mediator with specialized credentials – I am Certified as a Divorce Financial Analyst® -- I spend a lot of time making sure that both parties to a divorce have the requisite financial knowledge to move forward with their lives as independents (not married).
Children, too, often get an unanticipated education in family finance when their parents get divorced.
When you are working on your child custody plans, it is important to know that virtually all experts agree that children do best when:
(a) their parents get along well; and
(b) the children feel that they are being parented together by both mom and dad, as a team.
When valuing a small or family-owned business in a Virginia divorce, parties need to be aware of the concept of “goodwill.” Goodwill is divided into two main types: personal goodwill and professional goodwill. Though sometimes hard to tease apart, once a judge determines how much of each type of goodwill is contributing to the value of a divorcing-spouse’s business, that ruling can be monumental to the financial well-being of the husband and wife.
Settling a divorce case in Virginia, where one of the parties owns a business, can be extremely challenging. Businesses are considered “property” and, just like a house or a retirement fund, are divisible upon divorce. Therefore, in a mediated divorce settlement, the value of a family business must usually be quantified in order for both parties to make informed decisions with regard to which party retains which asset/liability post-divorce.
6 Tips for Financial Success After Divorce
Experienced Certified Divorce Financial Analyst® (CDFA) Provides Advice
Divorce is difficult for all involved parties – the divorcing couple, their loved ones, their children – but it is also an opportunity to improve your life.
For purposes of calculating Child Support in a Virginia divorce, gross income is what is used (not net, not AGI, nor anything else). The term “gross income” is very broadly interpreted. It includes, but is not limited to:
Salaries
Wages
Commissions
Royalties
Bonuses
Dividends
Severance Pay
Pensions
Interest
Trust Income
Annuities
Capital Gains
Social Security Benefits (can be complicated)
Workers Compensation Benefits
Unemployment Insurance Benefits
Disability Insurance Benefits (can be complicated)
Veterans Benefits
Spousal Support received
Rental Income
Gifts
Prizes
Awards
Gross income does NOT include:
Benefits from most Public Assistance programs
SSI benefits
Child Support received
Income received by payor for secondary employment where that income is being obtained specifically to discharge a child support arrearage established by a court or administrative order and the payor is actually paying that arrearage.
The Internal Revenue Code has changed as of December 22, 2017. For up-to-date information about child related tax benefits, see this video.
As part of your tax planning, you need to consider an expected change in your filing status for this year or next. The frequently overlooked strategy is that the advancement or postponement of the date of a marriage or a divorce by a single day at year’s end can make a sizable difference in the amount of your tax tab for both years.
