October 2007 Vol. 2 No. 10

 Keeping Your Financial Head During a Divorce  Debbie in The Boston Globe  October's Home Value Improver  About Us

 

Keeping Your Financial Head During a Divorce

If you and your spouse are considering a divorce, chances are you want the settlement to go as smoothly as possible. No one wants an endless back and forth about who gets what. As a result, I've seen people settle things in a manner they knew was unfair because they were weakened by the trauma of divorce and didn't have the fight in them to get what they deserved. It's a mistake. When you're splitting your assets is not the time to roll over for the sake of expediency.

Before you go ahead with divorce proceedings, ask yourself some important questions. Talk to a professional if you have to, just to learn about your own assets. If you are embarrassed that you don't know more about the finances, get past it. Again, this is not the time to worry about how you will be perceived by others.

Know your financial situation. Some people are wizards at managing the family's month budget, but do not bother dealing with investments, retirement, and other savings account type finances. There is no shame in that, but now is the time to learn. An attorney can help you learn:

  • How much is in your 401(k) accounts?
  • Is there a pension for you or your spouse? If so, how much is it?
  • Are there any investment accounts?
  • How is your credit rating? (You can order your credit report fairly simply on the Internet.)
  • What kind of insurance do you have?

To protect yourself, remember to learn these details not only about your finances, but also about your spouse's.

Get to know the details of your mortgage. If all you know is the amount of your mortgage payment, you have a new more things to learn. At the very least, understand the basics of mortgage: principle, interest, equity, down payment. Here are some other questions to ask.

  • What are the details of your home ownership?
  • Whose name(s) is(are) listed on the deed?
  • What bank holds your mortgage?
  • How much do you owe on the home? How much equity do you have?

What do you want to do with the family home? This is perhaps the most difficult question to answer when a family is divorcing. Consider the following:

  • Have the house assessed so you have a dollar amount attached to your biggest asset.
  • Remember: Your house will not pay your bills. If it seems too much of a financial stretch, perhaps it is.
  • If you have children, is it important for you and your spouse to keep the home so that their lives are impacted as little as possible?
  • Remember that mortgage companies are not bound by divorce decrees. If both of your names are on the deed and someone stops making payments, the mortgage company will hold you both responsible - whether you live in the house or not.

Whatever you and your spouse have decided upon for a settlement, make sure and get some professional advice. You may trust your lawyer, but only a financial planner can know the details of what is at stake and how it can be divided fairly. For example, you may get all the equity in the house while your spouse can keep the 401(k). An accountant can advise you on the full tax ramifications of your decision.

Turning one household into two households with the same income is bound to lower the quality of life for both you and your spouse. Perhaps this knowledge is the final push you need to give therapy one last try.



Debbie in The Boston Globe

I just had to respond to an Op-Ed piece I saw this month in The Boston Globe called Mortgage brokers' sleight of hand and was thrilled that The Globe chose to publish my Letter to the Editor.

Click here to read the letter!



October's Home Value Improver



Fix Up Your Family Room

Enjoy a more spacious and organized family room!
Do you long for a bigger, more attractive family room? You may have one already, it's just a little cluttered and tired since it has been used so much over the years.

You all remember the Fleetwood Mac song If you can't be with the one you love, love the one you're with. Think of this song while you're making some changes to update your family room and make it a better space to be. Love the family room you have!

1.     Declutter. Take everything out of the room that you don't need. Even if you love that old family picture, take it out for now and see what you think. You may prefer a clear table to one with a picture of you in that 80s hairstyle, anyway.

2.     Organize. Think about what you and your family like to do in the playroom. Do you listen to music a lot? Watch a lot of TV? Play games? Organize the family room around those activities. An entertainment center, or a group of built-in shelving can hold lots of different

3.     Add some splashes of color. If buying new furniture is out of your budget, try reupholstering the couch, or adding some new colorful pillows. Some new art for the wall will also spruce things up

4.     Improve from the ground up. You may have become so used to that old rug that you don't even realize it's bringing the whole room down. Get some fresh flooring, whether it's wall-to-wall carpet, throw rugs, hardwood or even tile.

5.     Remember when you're decorating that groupings of three are most pleasing to the eye. So when decorating, thing of putting things with three - for example, a picture, a table, and a candlestick.

6.     No family room? Create one! You may be able to create one with a garage bay. Cover up the walls with some wallboard and install a heating source, and you're on your way to a family room. Replace the big garage doors with French doors, and enjoy decorating!

 

Click here to share this newsletter with a friend

I was pleased to be asked recently to join the Women's Life Planning Network. It's a newly formed group of financial professionals who are committed to provide exceptional financial education and solutions to address every stage of a woman's life. One of the stages that many women go through, often unexpectedly, is divorce.

Men and women suffer during a divorce. But women are far more likely than men to suffer financially when their marriage ends. The National Marriage Project at Rutgers University revealed that a woman's standard of living will drop by as much as 27% -- compared to 10% for men -- after a divorce.

The family home is huge part of most divorce proceedings, and I am always happy to help couples figure out their options in what can be a very challenging situation. For more information, read this month's feature article.

Please feel free to call or email anytime with your mortgage question!

Best regards,
Debbie Siegel
President
Westchester Mortgage

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Click here to read my Mortgage Minute in ForeclosuresMass.com's monthly newsletter. This month's column: Changes in Interest Rate Affects Your Bottom Line.



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