"I'll Be Back" ~ Arnold Schwarzenegger

well, maybe not according to Maria Schriver.  Four kids and 25 years later they are calling it quits.  Seems like more and more people are getting divorced later in their married careers.  Yes, "careers", after-all, marriage is a lot of work.  Most recent stats show that 37.7% of all marriages won't make their 30th anniversary. ....like Arnie and Maria.  More and more people over 40 are getting divorced. Because of this, typically, there are children involved so the family dynamic is changing.  It's not so weird to have step-sisters and half brothers and even more than a couple of parents.

Along with the changing family dynamic, one might experience different needs for couples and many of them are financially based.  Amongst the considerations is the kids from previous relationships, age differentials and staggering retirement considerations, current expenses and who's kid is going to be supported through their education and to what extent?  With a potential 'brady bunch' financial commitment, retirement plans may seem to be....well....non-plans.

So what's the message here?  Planning, planning, planning.  I think it's important that the whole family unit is on the same page.  It's also helpful if "Mom" and "Dad" tell the kids their plans...and why!  The conversation could go a little like, "Son, I can't pay for all of your education but I can contribute.  If I pay for all of it then I can't afford to retire until I'm 75 or I'll have to live in  your basement in my old age."  I think then, the kids 'get it' and the parents have set the boundaries and expectations. Withe the potential of a large family dynamic and many needs to consider.........the conversation should be key.

How much is HR bound by governance?

Today's blog is more of a question, rather than financial advice.

Our corporations are bound by governance, meaning that they cannot offer a product, like a pension plan for example, without explaining it to their employees.  My questions is ~ how much should corporations get involved with their employees?  Where is the line?

If a staff member is going through a divorce and is not preforming well at work due to emotional stresses ~ should the company pay for counselling?  Again, in a divorce situation, should a corporation hire a financial specialist to help the employee with understanding how his/her soon to be split pension is going to affect the employees retirement?  Or, is the employee left to find this out for themselves potentially placing themselves outside of a retirement solution during their lifetime?

Negotiations for the Right Reasons in Divorce

Sometimes divorcing people seek to covenant certain assets for the wrong reasons, typically fueled by anger.  "She cheated on me so I want her favourite......"(fill in the blank) is common.  When looking at the financial aspects of divorce, however, emotions should be negated in favour of logic.  Easy to say and hard to do, I realize.  I know my example is stereo-typical but all too often this is the scenario.  Wife wants to keep the house.  Why?  One reason is the way that women perceive money.  Studies have shown that women equate money with security.  A house has bricks and mortar and it provides shelter, after all.  Another reason may be that she does not want the children to experience too much change, all at once.  Dad is no longer at home and changing schools and the pressure of creating new friendships may prevail.  Although this reasoning may have a lot of validity, is it reasonable.  Maybe the house means a lot to him and she is angry but can she afford to keep the house?  Will she deplete all her assets held outside of the home to try to keep the house, finding out a few years later that she is house rich and in debt?

Maybe more logical choices are available keeping in mind the reasons stated for wanting to keep the house.  Perhaps less costly housing alternatives are available in the same neighbourhood so that that kids can go to the same school and have the same friends.  Maybe the newer housing alternative may be a benefit from other points of view like, no memories of married life and less upkeep.  Perhaps less expensive housing alternatives can also give her the opportunity to save for retirement, as well.

 In my example, I talked about the wife wanting to keep the house but men have other challenges in their financial decisions, especially if they are paying child and/or spousal support.  A little less often but becoming more common place that in past years is the issue of the wife paying support to her husband, especially since women have been advancing in their business careers and the same types of issues need to be considered in this scenario.  

The power of the financial neutral in a divorce situation is to draw out these conclusions before the financial errors are set in motion.  Often clients do not want to pay an additional professional (other than their lawyer) to help with the divorcing process but my argument is, "How can you afford not to?"

Divorce? Remarriage?

Remarriage? Who wants to think about the legalities of anything past signing the new marriage certificate when you are getting married again?  For most, remarriage is a significant turning point of a renewed beginning with all the hopes and dreams that most of us lost during divorce or widowhood, hopefully, with the lessoned learnt from the first experience.

Who wants to think about legals issues and considerations of the impact on others when we want to be selfish and focus on our 'special day'?   Before walking down this isle or, if you prefer, standing on a beach or overlooking a volcano to say your wedding vows you may want to consider the complications that might arise which may cloud your bright, shinny future.  Ben Franklin said, "An ounce of prevention is worth a pound of cure".  In this case having your remarriage legal issues well in place before you promise the rest of your life to another may add to the relief allowing you to actually enjoy your 'special day' and save you a lot of money should the unthinkable come to fruition.

Here's the link to my story......it may save you a fortune and your family many headaches to ensure you have everything well plannned out beforehand and that your estate is actually handled in the way you had intended it to be handled.

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100712_093205_4840

The Collaborative Movement in the GTA

Collaborative divorce sounds like a juxtaposition of terms but this divorce process can save lives!  OK, that may sound a little dramatic but, in reality, it is the quality of life going forward, especially for children.  There are many different divorce processes which I have explained in an early blog so I won't g through the detailed description of each but rather focus or highlight what the collaborative process is all about.

Each couple must sign the collaborative agreement or a participation agreement. In the agreement each spouse promises to be upfront, honest, respectful and most importantly not go to court.  Both spouses must retain a collaboratively trained lawyer and, initially meet with their newly retained legal council.  The first 4-way meeting which consists of both spouses and their lawyers discusses the process, how it works and the rules of conduct.

At the second meeting the issues are brought forward.  Every divorce is different and some couples may agree, for example, on the financial issues and custody issues but not on access issues (access to the children).  Wherever there is disagreement that is where the couple and their lawyers work to some form of resolve.  The reason the lawyers are there is to ensure that the spouses are being fair to one another from a family law perspective.  Sometimes people feel they will give away everything to make the divorce issues go away but later live to regret the decision.  Lawyers help to ensure the fairness prevails and also correct any misconceptions.  Collaborative divorce embraces the interdisciplinary model which simply means that other professionals may be invited to join the group.  Often family professionals are necessary when access issues are at the forefront.  They can work out parenting plans with the couple.  Often times financial professionals can be brought into the group to help with budgeting issues and also to ensure that the assets you want to keep are the assets you can afford.  Sometimes spouses will give away retirement funds, for example, to keep the house but they can't afford to keep the house and they have to work all their lives as they cannot afford to retire.  Often there are solutions available at the beginning of the divorce that would negate these future issues.

What is really important in the collaborative process is that despite the bad feelings each spouse has for one another during this time because they have treated each other respectfully they can continue to co- parent after the divorce is over.  There are studies that show that affectively co-parented children grow up to be just as stable and 'normal' as children of couples who remain together.  High conflict divorces always create problems for children.  Sometimes they are manipulated by one parent or the other and grow up to resent the parent who did so when they are old enough to understand.  These children often end up with issues that they grapple with well into adulthood.  So, therefore, my statement that collaborative divorce can save lives.

If you are going through a divorce or thinking about it here are some links to the GTA lawyers, family professionals and financial professionals who are collaboratively trained in this area.

www.peelcollaborative.com

www.collaborativepracticetoronto.com

If you are out of the Toronto area there is an international association that provides names of professionals as well as links to local groups.

www.collaborativepractice.com

These website also have a large amount of information available about the collaborative process.