5 Divorce Minefields ...Role Of The Certified Divorce Financial Planner

Over 50% of married couples re-join the ranks of the un-married. Love, and relationship building, may be fickle stuff. But, it's pale soup compared to the dark complexities of asset carve-outs and divorce settlements when matters of money, tax and law intersect. Possibility for mistakes? Absolutely, unless couples hire an expert form the emerging class of certified divorce financial analysts. Getting married is like a stroll in the rose garden.

Getting a divorce is an open "minefield" of dangers to know about.

Divorce Minefield #1 - The Family Home. "You take the home...I'll take the bank accounts, the 401.K and the kids...50-50 split, OK?" Hold on. What looks like a ledger balance may contain some lurking tax issues which a divorce specialist financial advisor needs to identify. A divorce decree may be the "end of the road" position, but couples may wait for much of a year before a judge rules. Meanwhile, older appraisals of the family home may be completely out-of-line with either rises or declines in the local property market values.

* What The Certified Divorce Financial Planner Advises. Fluid values, like the housing and stock markets, mean that you and your financial investment management advisor need to consider (a). whether to sell the house while you're still married in order to fully shield you from capital gains taxes or...

(b). re-title the house in your name...but introduce restrictive covenants or terms and conditions within the divorce decree to shield a future home sale from capital gains tax liability.

Divorce Minefield #2 - Market Investments, 401.K Retirement Accounts. Getting into the numbers, and knowing what to look for, is the meat-and-gravy diet of certified divorce financial analysts.

* Stock Portfolios. A stock portfolio, in real time, is a composition in value. Dividing a stock portfolio, as a divorce investment management analyst will point out, requires stopping trading activity and then doing a trade-by-trade analysis for losses and/or capital gains tax liabilities in order to determine a true, fair and current portfolio value. And what about valuing hedge funds and their portfolios of private equity companies, mutual funds and the slippery-slope of stock-options? Any and all financial assets have to be wrung-out of their market activity focus and examined for net present value.

401.K Employer Funded Retirement Accounts. Determining future values of the tax-deferred 401.K plans...and then comparing those values with real property assets may lead to unsuspected imbalances. So, what do couples need to know? The handy certified divorce financial planner will advise that couples need a Qualified Domestic Relations order...ordered by a court of competent jurisdiction and approved by the named employer. And what does this QDRO court order do? This court order creates the rules for making transfers to an IRA account...or making early withdrawals under age 59 ½ without the customary 10% penalty tax, albeit with ordinary income tax imposed on the withdrawal. Advice? Get the QDRO court document ASAP and prior to the divorce in order to lock-in benefits. Your divorced financial advisor will point out that this detail, the QDRO, only applies to 401.K portfolio accounts...transfers between IRA account occur without penalty tax.

Divorce Minefield #3 - Who Gets The Kids...And The Tax Breaks? A simple question. But, huge drama and emotional complexity when parceling out kids and future lives, designated spousal visitation rights and so on. Yet, the rules for expense deductions are clear: only one (1) parent, the legal guardian, can take deductions for the kids as "dependents" on the annual tax returns.

Divorce Minefield #4 - Alimony Payments. The flip-flop nature of the tax code reveals itself, as the certified divorce financial analyst will point out. The party "paying" alimony can deduct the payments. However, the party "receiving" alimony payments must report the incoming payments as ordinary income, and pay tax. "Fair is fair" coming from an emotional roller coaster divorce action is not a defensible argument when it comes to facing the tax man.

* Hot Tip For Keeping The Alimony Payments Flowing. Your divorce financial advisor will recommend that the "alimony receiving" spouse take out a simple term life insurance policy on her ex...creating a back-up that future payments will be delivered, even if the paying spouse dies.

Divorce Minefield #5 - Wills And Trusts. Nothing fouls the divorce works better than out-dated wills and trust documents. Advice? Correct and refresh all family estate documents, by having your certified divorce financial analyst meet with local competent estate and divorce lawyers.

Bottom line: Discover "divorce made easier...and smarter" via the new breed of certified divorce financial planners. Please go to the following links for up-to-date information.

Divorce Attorney: http://www.wise4living.com/ldivatt/

State Divorce Law: http://www.wise4living.com/ldivstate/

Author Robin Derry is publisher for http://www.wise4living.com/ a specialty knowledge site that gives insights and solutions on certified financial divorce analysts, spendthrift trusts and family law legal needs, digital hearing aids, plasma and LCD TV stand design trends, wall mount and TV ceiling mount systems, cat fencing, underground dog fence solutions, wireless and radio dog fence technologies, dog runs and deer fence pet containment fences, outdoor deck planter box designs, deck lighting solutions, outdoor deck railing ideas, advice on building deck stairs, home and gardening projects such as decks and deer fencing, HDTV and home entertainment systems, specialty academic camps, auto tire and wheels technology trends, medical spas, technology trends, unique gift designs, technology gifts, tips for families committed to youth summer camps, body health, household, sport, travel, footwear, education, and much more.