Affordable Care Act, Small Business and Self Employed is an interesting article in which Barb Cashman, Esq interviews Shira McKinley, Esq on the pros and cons of the Affordable Care Act for small businesses and self employed people.

How to Save Money on your Divorce


Divorce can be very expensive.  I read recently that the average cost of divorceAlimony, Spousal Maintenance and Divorce in the United States is $15,000.  Most attorneys ask for a $5,000 – $7,500 retainer per client just to get started.  A business valuation can cost $12,000.  A one day settlement conference with attorneys and a mediator can cost $12,000, not including any preparation. A Parental Responsibility Evaluation can be $7,500.  If you consider that the median household income is around $50,000, the cost of divorce is a significant financial hit on families going through divorce.

Having worked as a divorce financial specialist and mediator for the past ten years, here are some things that I have found help families to save money on their divorce.


Win-Win v Win-Lose.  Many people, on being told that their spouse wants a divorce, feel hurt, betrayed and angry.  Some want to punish their spouse for wrong-doing.  By taking the attitude that the spouse will pay for wanting to end the marriage – going for the win-lose – will likely result in both of you losing and the attorneys and other professionals involved in your dispute getting paid rather well (with less money for you and your children in the future). By taking the approach of “how can we manage the dissolution of our marriage so that our children and each of us will be OK and have an agreement that we both think is fair”, will result in a less costly and less painful process.

Communicate well with your spouse.  Divorce is basically a life transition event.  With a little help, many couples can work out all the details of their divorce without resorting to litigation.  By taking the high road, and asking yourself “What action can I take that will least likely end in regret?” and “If I do or say this, how will it help me with my goal of a peaceful divorce?” you will save both emotional stress and money.

Avoid Litigation if you can. Understand that using the litigation process to punish your spouse is going to cost you both a lot of money, and the final result will be painful, both financially and emotionally.  You will be unlikely to co-parent effectively if you have been the subject of each other’s testimony in court. Sometimes you cannot avoid litigation because your spouse’s demands are unreasonable and you have to have a third party (ie the Court), make decisions for you, but if you can work together to reach an agreement, it will save you a lot of money and heartache.

Don’t be dishonest with money.  If your spouse suspects you of hiding money or spending money on the wrong things, it can cost a lot of money in legal and forensic accounting fees to track down hidden accounts or money spent for non-marital purposes (dissipation of marital assets).  And, this will contribute to increasing the conflict (and the cost) of your divorce.  It is best to be transparent and honest, and keep the money for yourselves and your kids.

Be willing to negotiate.  Understand your needs and those of your spouse and children.  Try to think through for any position you take, how it is good and bad for you, your spouse and your children.  Understand that the cost of fighting for something may be more than it is worth.

Take responsibility for your own actions.

Know what you can change and what you can’t.  You can only change your own behavior.  You cannot dictate what direction your spouse will take.

Talk to a therapist or divorce coach.

If you have trouble keeping your emotions (and words) in check, are triggered by things your spouse says, or are suffering from depression or anxiety, seek out a divorce coach or therapist who can help you through the divorce process.

Do your Homework.

Educate Yourself.   Read books on how to have a friendly divorce.  Avoid the material on how to “win” or “beat” your spouse in divorce.  These will only fuel the fire for more conflict.

Get your financial records together.   Find out what financial documentation your State requires you to provide to your spouse and get those documents together yourself. Order a projection of benefits if you have a pension plan.  Find/request records of pre-marital assets (such as IRAs or 401(k)s that you had before the marriage).  Organize your records by topic (real estate, taxes, income, bank accounts, investments, retirement, debts, etc), index them, and make copies (for your spouse and your attorney).

Get Advice Early. After you have your financial information together, consult with a Certified Divorce Financial Analyst to get a realistic picture of what you might expect financially from a settlement.  Consult with an attorney about the legal issues and processes that might work for your situation.  Make sure your expectations of process and outcomes are realistic.  You can spend a lot of legal dollars on chasing goals that have very little chance of being achieved.

Start planning your future.  If you have been a stay-at-home Mom/Dad and are the lower earning spouse, then start figuring out how you are going to become economically self-sufficient.  Will you need further education, specialized training, an internship?  What will this cost? Will this require day care for your children?  What will be your projected income once you start working?  Alimony/maintenance will not last forever, so you need to get focused early on what your needs will be.  This will also make the negotiations on alimony go much smoother (and less expensively) as it is much easier to work out a mutually acceptable alimony plan if the receiving spouse can articulate his/her realistic needs.

Try mediation or collaborative divorce.

Using a non-adversarial process is typically less expensive and results in less conflict and better decisions – because you make them yourselves — than litigation.

Choose your attorney carefully.

Usually it is best to work with an attorney who focuses on family law rather than other areas of the law.  Get recommendations from friends and family.  Have a list of questions to ask at the initial meeting.  Get a written fee agreement.  Ask if you can hire an attorney in a consulting role (sometimes known as unbundled legal services) to get their advice, but not represent you to your spouse or the court.  If necessary, you can “upgrade” to full representation if your attempts at getting an agreement with your spouse fail and you need more intensive legal help.

Don’t fight over the children.

Unless there is a good reason why the other parent should have no, or restricted, parenting time, the Court is likely to award something close to 50/50 parenting except for very young children.  Thinking through what is in the best interests of your children, which normally means being parented by both parents, and how their best interests link into what works for both parent’s schedules, will result in a better parenting plan than one that is imposed by the Court.

Don’t fight over household belongings.

Take an inventory (with pictures) of everything and try to work out a fair division of your household goods.  If you need to put values on your belongings, use garage sale prices.  You are both likely to need to set up a new household, so thinking about how that might best happen cooperatively will result in a better outcome.

Money issues.

Retirement Funds. Don’t take money out of your retirement plans before you are divorced.  Doing so can cost you an extra 10% tax penalty, and may mean that you are paying tax at a higher rate on the withdrawal than you would after the divorce.

Business Owner?  If you have a business, your accountant can get together much of the documents that will be needed for a valuation.

Equitable does not necessarily mean 50/50.  It may make sense for one of you to receive more than 50% of the marital pie, due to earning power or short term needs.

Be your own investigator.  If you think there is money missing, review bank statements to see if there have been transfers to unknown accounts or payments to unknown sources.  Are there forgotten retirement plans from previous employers? Find those retirement plan statements from before your marriage.

Monitor the post-separation spending.  Keep your own under control and monitor your spouse’s spending.  If your spouse’s is getting out of control, then it may be best to divide your accounts as soon as possible to protect assets.

A dollar is not always a dollar.  Understand that there are assets that depreciate, and assets that grow.  A car worth $20,000 is different than a mutual fund account valued at $20,000.  An investment account with a face value of $100,000 may have a taxable base which means that when the assets are turned into cash, you will have to pay tax on the gains.  Most retirement accounts consist of pre-tax money, which means when you cash them out, you will have to pay income tax on them.  They are valued differently than post-tax accounts, like Roth IRAs.   Some annuity accounts have riders which make them more valuable than their cash value.  Similarly, pension plans are normally worth more than the “cash value” on the statement.

Keep the House?  It is easy to insist on keeping the marital home.  But, you need to remember that owning a home has a lot of costs in addition to the mortgage and utilities, such as regular upkeep and major repairs.  If you decide to keep the house and then find out that you have to sell it a year later, you will have to bear the costs of sale on your own, whereas if the house had been sold jointly, you would have shared those costs.

No regrets.

Sometimes people just want the divorce to be over, and will make hasty decisions before they have a full understanding of the options and implications.  While this approach might save some emotional energy and professional fees in the short run, you will likely regret over the longer term those decisions you made in haste.  It is much better to take the extra time during the divorce process to make sure you have an optimal agreement that works for you both and your children.


Having the right attitude and approach to divorce can save you tens of thousands of dollars.  I know many cases that have been completed for less than $5,000 which could have cost $50,000 or more.  Battling it out in court rarely results in a decision that is better than a negotiated settlement when all the financial and emotional costs are taken into account.  However, you need to do your homework, get good advice, and not let your emotions take control of your logical self.

Ways to work with a Certified Divorce Financial Analyst

The Certified Divorce Financial Analyst qualification and role were created to help people going through divorce make better financial decisions.  Many people going through divorce were having difficulty understanding the impact that their decisions were going to have on their future financial situation.
These financials decisions are made whether one is negotiating their own divorce, working with an attorney in a mediated settlement, or unable to agree and having to have the Court make their decisions for them.

There are a number of ways to work with a Certified Divorce Financial Analyst.

1.  Bringing Clarity to Chaos A key way to use a Certified Divorce Financial Analyst is to go alone or with your spouse to just get a clear picture of the financial situation and what the effect of a divorce will have on each of you.  We take all the financial information and look at possible divisions of the marital estate, as well as future spending plans and after-tax cash flow analysis for both parties.  The goal is to see what your financial situations would really look like after the divorce and to help you come up with an agreement, or proposal, that will work for you both given your goals.

2.  Supporting you and your attorney in settlement conference or Court. A Certified Financial Analyst can take all of the financial information in your situation and come up with options and scenarios to help everyone see what possible options are that will lead to a settlement.  I have attended settlement conferences and mediations and using the financial modeling software run proposals and different settlement options so that everyone could see the implications of these options.  This has normally led to a settlement which both parties are satisfied with.   When we have not been able to reach settlement, this work can be powerful evidence as testimony at trial to influence the Judge’s decision on asset distribution and maintenance.  This can be useful whether you are the main bread-winner or the lower-earning spouse.

3. As a Mediator. My practice is focused on working with both parties as a mediator, helping them through all the issues of their divorce, but primarily on the financial issues.  (If there are difficult parenting issues, then I team up with parenting specialist-mediators to help with those issues.)  Using financial modeling tools designed specifically for divorce I can help parties to really understand, in practical terms,  the financial issues in their situation so that they can together make better decisions that they both think are fair and equitable. Many times parties (and their attorneys) who have held a particular position on maintenance, for example, realize that the position is unrealistic given all the circumstances and modify their position and come to an agreement with the other party. The expertise that I bring to the mediation allows me to offer ideas and suggestions to the parties to help them see possibilities for settlement that they may not previously have been aware.

Divorce and Health Insurance

Divorce and Health Insurance

I was talking with a colleague the other day who told me an interesting story.  When she got divorced, her former husband agreed to provide health insurance coverage for their son, which he did.  When my (self employed) colleague remarried, her new husband wanted to cover her and her son on the policy through his employer as the additional cost was not that much and was really good coverage.  It seemed like a bit of an extravagance at the time, but they did it nonetheless.

Some years later, their now adult son (in his early 20s) got a serious disease and the hospital bill was around $500,000.  No problem:  his father’s health insurance should cover it. Unfortunately, his father had had some serious health issues himself and had maxed out on his benefits.  So, step-father’s insurance coverage was very much needed and paid for all the treatment and long hospital stay.

The moral of the story is that if the children have health issues, or if the parents have a history of health issues, it may be wise to double up on insurance for the children, especially if it is being subsidized by employers.  Many people face bankruptcy in this country because they have to deal with extremely large medical bills because they are, or become, uninsured for some reason.  Sometimes it is better to be safe than sorry.


Saving Money During the Divorce Process

There are ways you can save money in the divorce process.  However, you must be careful that if you save too much money in the short term (by not getting good advice), it may cost you dearly in the long term.
1.  Use your brain.  Don’t let your hurt and disappointment drive you to take rash decisions in retaliation.
2.  When advised to do things that will upset or damage your spouse at the beginning or during the divorce process, ask, “how will this affect my ability to achieve my desired outcomes?” and “what will it cost, both in financial and emotional terms, for me to do this?”  For example, does it really make sense to file a temporary injunction against your spouse if there are no real grounds to do so?  Do you really need to take $10,000 from the joint bank account and put it into your own account without getting agreement.
3.  As one attorney told me, if someone tells you something about the law that does not make sense, then it is probably not true.  For example, if you move out of the house where your spouse and children are, but are still keeping contact with your children, you will not be charged with abandonment.
4.  If you can settle your case without retaining attorneys to represent you, you will save a lot of money in professional fees.  You should at least consult with an attorney (sometimes called unbundled legal services) so that you know what your rights and obligations are.
5.  If you get advice from a family law attorney or a Certified Divorce Financial Analyst so that you understand the short and long term financial implications of your potential agreement, then you should be able to make better, more informed decisions and not have nasty surprises one, two or more years down the road.
6.  Get all of the documentation together early  that you are required to provide by the court and have it organized.  If you believe you have a claim for non marital, separate property, then get the evidence you need to support your claim, unless you spouse agrees with your claim without the documentation.
7.  Don’t try to hide assets, or “forget about them”.  It will cost you a lot of money in “discovery” for the attorneys to uncover them.  If it is not found during the course of the divorce, but is suspected later, your spouse can reopen the case – more attorney fees!
8.  You have learned during the course of your marriage how to “push the buttons” of your spouse.  This is not the time to do it.  Think before you speak.   The kinder that you are to each other during the process, the less money you will spend on professional fees and the more likely you will come out with an agreement that you both think is fair. Before you speak, ask yourself these questions.  If the answer is No to any of them, STOP.    Is it truth?  Is it necessary?  Is it kind?
9.  If you need cash, you can often get money from your retirement funds after the divorce without paying the 10% penalty in addition to the normal income tax on the early withdrawal.
10.  Alimony is normally tax deductible to the payor and taxable to the recipient. Child Support is tax neutral.  By increasing alimony you can sometimes save taxes overall and reduce child support.  Both of you could be better off.  Because Child Support is always modifiable by the Court, when alimony ends or reduces, then child support may go up.