Q: What is my first step in investing after divorce?
Be sure to understand the terms of the settlement agreement thoroughly. Take the time to read it through carefully before signing anything.
Q: What is commonly overlooked in a divorce settlement?
Quite often the spouse’s pension benefits, company stock options and social security benefits. Also, children’s college tuition plans are often left unclear.
Q: Should after-tax value be considered in a settlement agreement?
Absolutely. A home and a stock investment may have appreciated equally, but will they have the same value after taxes are paid? If the home was a primary residence for over two years, then a considerable percentage of the appreciation is likely to be tax-free.
Q: What are some possibilities to increase my monthly cash flow?
Consider asking for a raise or promotion, switching jobs or moonlighting. Consider renting a room to a college student or another single woman.
Q: Can I collect social security on my former spouse?
There is a possibility if you were married over 10 years. See www.ssa.gov.
Q: What is a QDRO?
A Qualified Domestic Relations Order (QDRO) is a court order describing how a retirement plan’s benefits are to be distributed in a divorce. A distribution pursuant to a QDRO may be rolled over into a tax deferred retirement account, thus delaying the tax burden.
Q: Does it make a difference if we sell the house before or after divorce?
If you are planning to sell the house anyway, there may be a greater tax benefit to selling the house prior to divorcing. Under current law, if the house was the primary residence for 2 or more years, a married couple can shelter $500,000 from capital gains tax, whereas a single person can shelter only $250,000.
Q: What about credit card debt?
Debts incurred during marriage are usually considered to be the obligation of both spouses equally. It may be a good idea to order a copy of you and your spouse’s credit report to review any outstanding credit card balances and agree to close any joint credit card accounts. Any loans or mortgages titled in both names should be retitled in the name of the person who is keeping the asset (examples: home mortgage, car loan, etc.)
Q: What are some “big picture” goals to keep in mind?
Beyond emotional and physical health and safety, consider monthly cash flow, college tuition costs, retirement income, long-term care and medical insurance.
TERRI MILLSON IS A CERTIFIED INVESTMENT MANAGEMENT CONSULTANT (CIMC), PRESIDENT AND FOUNDER OF TRISUMMIT FINANCIAL WWW.TRISUMMIT.COM BASED IN NEWPORT BEACH, CA. TERRI HAS BEEN INVOLVED IN THE FINANCIAL SERVICE INDUSTRY SINCE 1986 . “TO ACHIEVE, WE MUST FIRST PLAN” IS TERRI’S MOTTO IN HER QUEST TO MAKE THE FINANCIAL GOALS OF HER PRIVATE INVESTORS A REALITY. TERRI IS LICENSED TO TRANSACT SECURITIES BUSINESS IN THE FOLLOWING STATES: CA, CO, FL, IL, MD, MO, NJ, NV, OR, TX, UT. FOR A COMPLIMENTARY AND CONFIDENTIAL CONSULTATION, PLEASE E-MAIL TERRI@TRISUMMIT.COM OR CALL TERRI DIRECTLY AT 949.757.0941 OR TOLL-FREE 800.727.0941. SECURITES AND
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