According to John Schindler of the Schindler Group at UBS Financial Services, the job market is improving and the economy is strengthening, but unfortunately this doesn't bring good news for everyone-law offices and financial planning firms are seeing an uptick in post-recession divorce rates.
Couples, young and old, who could not afford to divorce during the recession-whether because they were unemployed or underwater on a mortgage or otherwise strained-now can and are splitting up.
John Schindler, Sr. VP of Wealth Management of The Schindler Group at UBS Financial Services provides the following information:
WHEN GOING THROUGH A DIVORCE:
· Make a list-It is critical to be organized and write down all of your assets and note whether they are owned separately or jointly. What do you want to keep, and what are you willing to part with?
· Create a budget and stick with it-one to live by until the divorce is final, and another for after the divorce when your assets have been divided and settled.
· Assess your credit-get a copy of your credit report and see if there are any problems that need to be dealt with immediately.
IMPORTANT CONSIDERATIONS THAT TEND TO FLY UNDER THE RADAR DURING THIS PROCESS
· Long-term care plans. These are financial plans that determine how you will cover medical and living costs in the event that you or your ex-spouse fall ill or become incapacitated in some way.
· You can plan to pay for it out of pocket, with long-term care insurance, with Medicare or Medicaid, even VA benefits. There are a wide variety of options, and your choice will depend on your financial situation and collection of assets.
· What's important is that you work with a financial advisor to set a plan, because you don't want to be financially blindsided down the line if something happens.
EMPLOYEE BENEFITS AND PENSIONS
· Depending on how long you have been married and what your collection of assets and benefits looks like, your spouse is most likely entitled to a portion of your retirement benefits, and vice versa.
· Many folks have a QDRO, a qualified domestic relations order, built into the divorce settlement. The QDRO creates or recognizes the ex-spouse's right to receive all or a portion of the benefits paid to a participant under a retirement plan.
· The existence of the QDRO guarantees that your ex-spouse will receive a portion of your retirement benefits, or that you will receive a portion of his or hers, depending on both of your income situations.
· Last year, Ford and GM made history by offering their current employees and retirees the option to take a lump sum pension buyout, instead of a monthly pension. Most companies offer this to employees who no longer work with the company, or have been retired for a long time.
· There are thousands of divorced employees and retirees in metro Detroit and nationally who opted for the lump sum last summer, but are still waiting to receive their money because Ford is still deciding what portion of the lump sum will be paid to the ex-spouses. They haven't published that figure yet.