MONEY Love and Money

11 Financial Clues That Your Spouse Wants a Divorce

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Certain changes in financial behavior and conversations about money are sure-fire signs that your spouse is preparing to split up.

Over 25 years, I’ve worked on the financial aspects of more than 1,300 cases of divorce. Rarely are both spouses in sync when it comes to filing; one spouse is usually laying the groundwork before the other.

In hindsight, most people on the receiving end of the filing have their “aha!” moment. One homemaker told me that her husband began plying her with gifts and vacations; he also launched all kinds of projects to fix up their house so they could sell it and move to a smaller place. It was all totally unsolicited, much appreciated, and done with loving attention.

Six months into all this thoughtful behavior — as the the couple closed on their new vacation timeshare, downsized to a beautiful condo, and planned for their next vacation — he popped the zinger one Saturday morning: “I want a divorce.”

For another client, the signs were a little more obvious: The bank called her husband to let him know that his mortgage was approved — the mortgage he was co-signing with his girlfriend.

Divorce is an emotional, legal, and financial combat zone. There are actually websites devoted to secretly planning for divorce, in order to “win” the best one possible. Divorces can have win-lose, win-win, or lose-lose outcomes. Preparation helps your case. And the earlier you recognize that divorce is imminent, the better you’ll be able to prepare.

Over the years, I have come up with a list of sure-fire financial indicators that your spouse is heading toward divorce. Changes in behavior about money — some subtle, some not — can be tell-tale signs of a split in the offing.

Most of the time, changes in financial behavior accompany classic non-money signs of marital trouble: lack of communication, stress, physical separation, arguments, and isolation. But it helps to be on the lookout for financial signs on their own. And here’s a good list:

Your spouse…

  1. Argues about money.
  2. Seems to be hiding money.
  3. Has no explanation for why money is missing.
  4. Has stopped direct deposits to your joint bank account.
  5. Puts you on a budget and demands an accounting of all of your spending.
  6. Makes large cash withdrawals.
  7. Pays for his/her own credit card bills — or better yet, has his/her mail sent to the office.
  8. Goes on more business trips than usual and has greater travel and entertainment expenses.
  9. Blindsides you with gifts and trips.
  10. Reduces contributions to savings or retirement. Excess cash is now spent or socked away somewhere else.
  11. Takes out loans because it is a “smart” financial decision during times of low interest rates.

Along with these changed behaviors, there’s a whole other set of red flags to look out for: a noticeable turn for the worse in how your spouse talks about his or her earnings, workplace achievements, or business prospects. He or she starts complaining a lot about money — how business is bad, how jobs are at risk, how this year’s bonus is in doubt.

If your spouse is suddenly and remarkably gloomy about his or her ability to make money, this might be premeditated strategy to lower your financial expectations in a divorce. Attorneys even have a name for it: RAIDS, for “recently acquired income deficiency syndrome.”

On the bright side, if you are familiar with your spouse’s business, customers, and performance reviews, it will be hard for your spouse to paint a credible picture of unexpected gloom. So keep your eyes set on financial reality and do your homework if your spouse complains in detail about the following:

  1. His/her earnings potential is at its peak and is at risk.
  2. Bonuses are reduced or nonexistent.
  3. Company layoffs are imminent or overdue.
  4. The employer has declining revenues and sales.
  5. Clients are deserting the company.
  6. His/her sales territory has been cut despite solid job performance.
  7. It’s the economy, stupid!
  8. His/her age is a negative factor in the business, and he/she is at risk of being fired for being too old.
  9. Our family spending is rampant and unsustainable with probable loss of income or job.

If you start hearing these complaints, it’s time to organize your financial wits and get a handle on your financial lifestyle. If you’re surprised to have a spouse who seems to be premeditating divorce, empower yourself and hire a divorce financial planner. A divorce financial planner will cut through your emotional tangles to track your financial issues and provide a foundation for you to advocate your needs, when and if you should hire an attorney.

———-

Vasileff received the Association of Divorce Financial Planners’ 2013 Pioneering Award for her public advocacy and outstanding leadership in the field of divorce financial planning. Vasileff is president emeritus of the ADFP and is a member of NAPFA, FPA, and IACP. She is president and founder of Divorce and Money Matters, serving clients nationwide from Greenwich, Conn. Her website is http://www.divorcematters.com.

 

TIME Innovation

Five Best Ideas of the Day: March 17

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Is it time for the Jews to leave Europe?

By Jeffrey Goldberg in the Atlantic

2. The divorce rate is falling. Here’s why that’s bad news for some Americans.

By Sharadha Bain in the Washington Post

3. Across the planet, cost and class determine who lives and who dies.

By Paul Farmer in the London Review of Books

4. The U.S. should consider joining — rather than containing — the Chinese-led Asian Infrastructure Investment Bank.

By Elizabeth C. Economy in Asia Unbound

5. Trade unions in Cleveland will launch a “pre-apprentice” program to prepare high school kids for construction jobs.

By Patrick O’Donnell in the Cleveland Plain Dealer

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

MONEY Financial Planning

Why Won’t People Guard Their Wealth?

As you build wealth, you need to protect it using LLCs, trusts, and other entities. Here's what gets in the way.

Divorce, bankruptcy, lawsuits: These are the most common threats to a person’s assets. As we financial planners help clients build wealth, we also need to help them protect it. Unfortunately, sometimes they won’t let us.

A basic strategy for asset protection — an often-overlooked aspect of comprehensive financial planning — is to put property beyond the reach of legal judgments.

Yet when I suggest asset protection strategies to clients — for example, owning assets in limited liability companies — they often respond with ambivalence or reluctance. I now realize these reactions may be tied to the beliefs clients hold about money and wealth. It isn’t enough for us planners to understand asset protection; we also need the skills to help clients reframe the beliefs that may keep them from protecting themselves.

I’ve encountered several different common beliefs, or money scripts, that clients have pertaining to asset protection. Here are some of them, along with my responses:

  • “Liability insurance is all you need.” While liability insurance is a good start, it protects you only if (1) the claim doesn’t exceed your insurance coverage; (2) your policy is in force; (3) your insurer doesn’t deny the claim; and (4) your insurance company doesn’t go bankrupt in the middle of a lawsuit. Well, three of those four exceptions have happened to me.
  • “If you are ‘lucky’ enough to have a lot, it’s petty and selfish to want to protect it.” Asset protection isn’t just about the owner of the asset. It also safeguards others, such as employees, tenants, or family members.
  • “Asset protection is only for the very rich.” A client may have a small investment portfolio, some rental property, or a small business. That may not represent great wealth, but whatever they have is all they have. For that very reason, asset protection may be especially important for those without a lot of wealth.
  • “Asset protection is shady and unethical.” Many people associate asset protection with hiding assets illegally. This is not what any reputable professional will advise clients to do. Planners need to be prepared to discuss the ethics as well as the strategic value of the approaches they suggest.
  • “People in general can be trusted, so asset protection isn’t necessary.” Just ask anyone who’s ever been through a nasty dissolution of a partnership if they fully trusted their partner when they went into business — and how strong that trust was at the time of the breakup.
  • “You won’t be sued unless you do something wrong.” In an ideal world, this would be true. In the world we live in, it’s surprising how often people of perceived wealth are the targets of frivolous lawsuits. Most cases are without merit and are eventually dismissed or decided in favor of the defendant, but it takes a lot of time, energy, and money to defend against them. Plaintiffs hope to gain a settlement from a defendant unwilling to go to that trouble and expense.
  • “It’s wrong to prevent people from collecting damages if they have been hurt.” If you have genuinely injured someone, of course you have an obligation to make that right. Strong asset protection includes provisions, like adequate liability insurance, that allow clients to take care of legitimate obligations without bankrupting themselves.

It’s important to make clear to clients that ethical asset protection strategies are not a way of avoiding responsibility. Asset protection is not intended to protect clients from the consequences of their own wrongdoing. Its primary purpose is to protect clients from the wrongdoing of others.

And the first phase of implementing that protection may be to help clients get past their own money scripts about asset protection.

———-

Rick Kahler, ChFC, is president of Kahler Financial Group, a fee-only financial planning firm. His work and research regarding the integration of financial planning and psychology has been featured or cited in scores of broadcast media, periodicals and books. He is a co-author of four books on financial planning and therapy. He is a faculty member at Golden Gate University and the former president of the Financial Therapy Association.

MONEY Love and Money

The 3 Most Important Things to Do Before Announcing You Want a Divorce

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Jeffrey Hamilton/Getty Images

Ready to call it quits on your marriage? A little early planning can go far in helping you protect your finances

With “new year, new you” resolutions in full swing and the holidays finally over, January is one of the hottest months for divorce filings.

“Last year I saw a 10 to 15% increase in consultations in January, peaking at a more than 40% increase in March,” says Lisa Decker, a certified divorce financial analyst in Kennesaw, Ga. “I refer to January as the beginning of ‘Divorce Season.'”

If you’re among those who’ve decided that 2015 is the year you’ll go from married to single, make sure you’re ready for the financial toll that the divorce process can take by making these key move before announcing you want out.

Gather Key Docs

“Once a divorce has been initiated, financial information can disappear or become difficult to access,” says Carl Palatnik, a divorce financial analyst in Melville, NY.

With that in mind, begin gathering copies of any documents that verify assets, liabilities, income and expenses, including recent bank, brokerage and retirement statements, tax returns, and real estate deeds—and the prenup, if you have one. This step can take three to six months, depending on how accessible the documents are, adds Decker.

Having a paper trail saves stress, time and money. “You won’t be captive to your spouse, hoping he or she will provide things to you,” says Decker. Nor will you have to pay your lawyer to go after this information.

Stash Some Cash

Ideally you want to have a year’s worth of basic living expenses in a personal account prior to filing.

If all your money’s co-mingled and you have no way of opening your own account and making deposits without raising red flags, open a credit card with a low or introductory 0% interest rate, says Decker.

This step is important because divorce proceedings could take six months or more, during which time you may lose access to spousal support. Plus, you’ll need to lay out another $10,000 to $20,000 for an initial retainer if you plan to work with an attorney and/or financial advisor, says Decker. (If you earn significantly less than your partner or have no income a retainer could get a lawyer to petition to have your spouse pay ongoing legal fees.)

Sever Credit Ties

Finally, to prevent what my friend experienced, try to separate shared credit card accounts, says Palatnik.

If your spouse is an authorized user on one of your cards, ask the issuer to remove your spouse’s name. If you’re joint users, freezing the cards may be your best bet.

But wait to do this until right before making the big announcement. Otherwise, jig’s up as soon as your spouse swipes.

Farnoosh Torabi is a contributing editor at Money magazine and author of the book, When She Makes More: 10 Rules for Breadwinning Women.

More by Farnoosh Torabi:

MONEY Divorce

Oil Tycoon’s Ex-Wife Finally Accepts $975M Divorce Settlement Check

The ex-wife of an oil tycoon has deposited a divorce settlement check worth almost $1 billion, after refusing to accept it earlier this week.

TIME Marriage

Oil Magnate’s Wife Rejects $975 Million Divorce Check

Key Speakers At The Bloomberg Year Ahead 2015 Conference
Bloomberg/Getty Images Harold Hamm, chairman CEO and founder of Continental Resources Inc., speaks during a panel discussion at the Bloomberg Year Ahead: 2015 conference in Washington, D.C. on Nov. 14, 2014.

He's worth $18 billion

Oil executive Harold Hamm offered his ex-wife a handwritten check for $974.8 million in order to settle their bitter divorce, but Sue Ann Arnall rejected it.

Hamm’s lawyer told CNBC on Tuesday that Arnall did not “want to risk the dismissal of her appeal” by accepting the full amount of what the oil magnate owed her according to a November divorce settlement.

Arnall, who has taken her maiden name after the divorce, appealed a judge’s ruling to offer her nearly $1 billion in their divorce because it pales in comparison to the $18 billion fortune Hamm has amassed through oil drilling company Continental Resources . Hamm’s also appealed the settlement, saying $1 billion was far too high.

[CNBC]

TIME celebrities

Jeremy Renner’s Wife Sonni Pacheco Files for Divorce

Jeremy Renner at the Launch of Jeff Vespa's new book "The Art Of Discovery" in Beverly Hills, Ca. on Oct. 23, 2014.
Maury Phillips—Getty Images Jeremy Renner at the Launch of Jeff Vespa's new book "The Art Of Discovery" in Beverly Hills, Ca. on Oct. 23, 2014.

The actress and model cites irreconcilable differences as the reason for the split

Less than a year after quietly tying the knot, Oscar-nominated actor Jeremy Renner and wife Sonni Pacheco are ending their marriage.

The actress and model filed papers to end her 10-month union with Renner, 43, PEOPLE has confirmed.

It appears the split is contentious: court papers that Pacheco filed earlier this month demand The Hurt Locker actor return her passport, which she claims was stolen, as well as her birth certificate and social security card.

She cites irreconcilable differences as the reason for the split, and says their prenuptial agreement should be voided because it’s based on “fraud.”

Pacheco is also asking for physical custody of their daughter, Ava Berlin, 21 months, as well as spousal support, use of their Range Rover and for Renner to pay for her moving expenses and rent.

The duo have been notably quiet about their relationship, with Renner only confirming the union in September – months after they exchanged vows.

“I have tried to protect my family’s privacy, my wife’s privacy. I don’t need her to get hammered with my life,” he told Capitol File magazine while confirming his marriage. “Privacy issues are important because I want her to go about her day without being bothered.”

Renner’s rep has not commented on the split.

TMZ was first to report the divorce.

This article originally appeared on People.com

TIME Parenting

Jennifer Aniston: People Call Me ‘Selfish’ For Not Being a Mom

"Life Of Crime" Premiere - Arrivals - 2013 Toronto International Film Festival
J. Countess—WireImage Actress Jennifer Aniston attends the premiere for "Life Of Crime" at Roy Thomson Hall on September 14, 2013 in Toronto, Canada. ( J. Countess--WireImage)

And correctly defines "feminism"

Even after years of the prying questions and condescending sympathy, it still bothers Jennifer Aniston when people ask her why she’s not a mom.

“I don’t like [the pressure] that people put on me, on women—that you’ve failed yourself as a female because you haven’t procreated,” she told Allure for their January issue. “I don’t think it’s fair. You may not have a child come out of your vagina, but that doesn’t mean you aren’t mothering—dogs, friends, friends’ children.”

The actress, who has gotten critical praise for her role in the upcoming film Cake, explained that she finds the incessant commentary about her maternal status hurtful. “This continually is said about me: that I was so career-driven and focused on myself; that I don’t want to be a mother, and how selfish that is…Even saying it gets me a little tight in my throat.”

Aniston also seemed well-prepared to answer the now-omnipresent questions about feminism–and why it’s such a complicated issue. “Because people overcomplicate it,” she said. “It’s simply believing in equality between men and women. Pretty basic.”

[Allure]

MONEY Social Security

The Hidden Pitfalls of Collecting Social Security Benefits from Your Ex

Q. I have spoken with seven people at the Social Security Administration and gotten five different answers to my question. I want to draw Social Security from my ex-husband of 30 years at my present age, 62. I know that is not my full retirement age, and I would receive a reduced benefit. I also want to wait until full retirement age, 66, to draw from my Social Security benefit and receive it in full without reduction. Can I do this? —Sandra

A. This sounds like a sensible plan but unfortunately, when it comes to Social Security rules, logic doesn’t always carry the day. In this case, your plan conflicts with the agency’s so-called “deeming” rules, which apply to people who apply for spousal benefits—whether they are married or divorced—before they reach full retirement age.

Before we get to the problems with deeming, let’s quickly review the basics. If you were 66 and filed a divorce spousal claim, you would collect the highest possible spousal benefit—50% of the amount your ex-husband is entitled to at his full retirement age. It isn’t necessary for your ex to have filed for his own benefits at 66 for you to receive half of this amount. In fact, he doesn’t even need to have reached age 66. That’s just the reference point for determining spousal benefits.

Since you’re filing early, however, you won’t get half of his benefits. The percentages can be confusing, so here’s an example from the agency’s explanation of benefit reductions for early retirement. If your ex-husband’s benefit at full retirement age was $1,000 a month, your “full” divorce spousal payout at age 66 would be 50%, or $500. If you file at age 62, that amount will be reduced by 30% of $500, or $150. The payout you get, therefore, comes to $350 ($500 minus $150), or 35% of his benefit.

There are a few other rules for receiving divorce spousal benefits. You cannot be married to someone else. And if your former husband has not yet filed for his own Social Security retirement benefit, you must be divorced for at least two years to claim an ex-spousal benefit.

Now for the deeming pitfalls. If you meet these tests and file for a divorce spousal benefit before reaching full retirement age, Social Security deems you to be simultaneously filing for a reduced retirement benefit based on your own earnings record. The agency will look at the amount of each award and will pay you an amount that is equal to the greater of the two.

Since your spousal filing has also triggered a claim based on your own work history, you cannot then wait until full retirement age to file for your own benefits. In other words, your own retirement benefit will be reduced for the rest of your life. Logical or not, those are the rules.

There’s no simple solution to the deeming problem, but you do have some choices. Figuring out the best option depends on many factors, including the levels of Social Security benefits that you and your ex-husband can receive, as well as your overall financial situation. Do you absolutely need to begin collecting some Social Security benefits at age 62, or can you afford to wait? You should also consider whether you’re in good health and how long you think you may live.

Your first choice is to do nothing until you turn 66, which is the full retirement age for someone who is now 62. Once you hit that milestone, deeming no longer applies. At that time, you could collect your unreduced divorce spousal benefit and suspend your own benefit for up to four years till age 70. Thanks to delayed retirement credits, your benefit will rise by 8% a year, plus the rate of inflation, each year between age 66 and 70. (Your spousal benefit remains the same, except for the inflation increase.) So, even if your divorce spousal benefit is greater than your retirement benefit at age 66, this may no longer be the case when you turn 70.

But if you need the money now, your best choice may be to file for reduced benefits. If your reduced divorce spousal benefit is higher than your own reduced retirement benefit, you have another option. At 66, you could suspend your own benefit and receive only your excess divorce spousal benefit—the amount by which your ex-spousal benefit exceeds your retirement benefit. It probably won’t be much. Still, suspending your benefit will allow it to rise until age 70, though it will be lower than you would have otherwise received because of early claiming. If these increases provide more income than your divorce spousal benefit, this move may be worth considering.

Variation of these choices include filing early at age 63, 64, or 65. You can also consider how delayed retirement credits would affect your decision if you filed at age 67, 68, or 69. In the end, you’ll need to do the math to compare the potential benefits of delaying vs. claiming now. Or you may want to get help from a financial adviser.

Philip Moeller is an expert on retirement, aging, and health. His book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” will be published in February by Simon & Schuster. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

Read next: This New Retirement Income Solution May Be Headed for Your 401(k)

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