Managing your Finances Jamie Minster M.B.A. CDFA Divorce Financial - - PowerPoint PPT Presentation

Managing your Finances after Divorce

Jamie Minster M.B.A. CDFA Divorce Financial Specialist

• Welcome to Managing your Finances after Divorce, my name is Jamie Minster I am a CDFA and a financial advisor and my practice specializes in working with

couples and individuals going through divorce and help guide them after.

• Money is an emotionally charged topic, there is a reason we are not supposed to talk about religion, politics or money.
• It is emotionally charged because this is how we measure success, it buys experiences and most importantly, this is how we care for ourselves and our families.
• And because this is how we care for ourselves and our families, we need to be good stewards of our financial world. God calls us to be good stewards.
• In this conversation we are going to talk about empowerment and taking charge of your finances.

Get Organized

• This is the ideal time to take a

full inventory of your entire financial landscape.

• Create a place for all of your

financial, insurance & legal documents.

• Run your credit report.
• Make certain you have a

statement that correlates with everything on your credit report.

• The first step to becoming empowered is taking a full inventory of your entire financial landscape.
• Create a place to put all of this information, I like a binder, some people may need a accordion file, or maybe you have both.
• Put all legal documents, wills, trusts, divorce agreements, separation agreements, 401k statements, brokerage, mortgage etc. All assets and debts should be here
• Run your credit report make sure you have a statement that correlates with everything on that report.
• Are there items on your report you were unaware of? Is it a joint debt that your name should have been removed from?

Get Educated

• What do you own and why do

you own what you own?

• Empowerment in knowledge
• Take charge of your financial

landscape.

• What is the cost associated

with your investment tools?

• Who is getting paid and how are

they getting paid?

• Get educated on what you own and understand the details of the financial products you own.
• why do you own it?
• Does it meet what is important to you?
• There is great empowerment in knowledge
• Typically one spouse has the financial role, maybe that was you, even so now is a good time to reassess relationships and plans.
• If you were not the spouse that handled the finances, you need to take charge and you need to do it NOW.
• Do you purchase anything else without asking the price?
• And the financial services industry is incredibly good at not fully revealing costs.
• They are not philanthropic organizations!
• Who is getting paid and how are they getting paid? Ask the question

Business Items

• Reassess all financial relationships
• Reassess all assets
• QDRO’s
• How are your accounts titled?
• JTWROS
• TOD
• Joint
• Life Insurance
• Beneficiaries on all accounts and

Life Insurance policies

• Wills, Trusts & Power of Attorney
• is the financial advisor the right one for you at this stage of your life, do they make you feel comfortable? Do you feel like they are speaking over your head or don’t

listen? If they don’t make you feel good, find a new one!

• Are these the assets you should be holding
• Did you complete your qdro, this is a big one! Depending on how it was written you may have left gains/losses to your spouse. What happens if they die? Who is the

beneficiary?

• How are your accounts titles? Are any of them JTWR or a TOD?
• Do you understand your life insurance? Features and benefits, who is the owner?
• Beneficiaries, did you change them? Assets that transfer via beneficiary only go to the beneficiary, it doesn’t matter what the divorce decree

Financial Tools

• Packing your bags analogy
• Right now you may have a suitcase packed for the wrong destination or maybe you were left with the carryon.
• Now you're taking a parka to the Cayman Islands.

Available Tools

Stocks

ETFs/ Mutual Funds

Variable Annuities

Bonds Cash CD’s

Fixed Annuities

Fixed Index Annuities

No Potential Loss Potential Loss Broker Bank Insurance Agent

Greatest Growth Potential

• These are the available investment tools
• There are other tools also available such as Private Placements, Commercial Paper and REITS but we are going to keep this on a high level.
• Each of these tools have a fee or price associated with it
• stocks come with a commission or management fee
• ETF’s & Mutual Funds have a management fee for the investment itself and then you may be paying an additional advisor fee of 1-2%
• Variable Annuities 3-4%
• Bonds are typically sold for a commission but you may also be paying an advisor to manage a bond portfolio
• Cash doesn’t have a fee but it has erosion from inflation
• CD’s - no fee
• Fixed Annuities & Fixed Indexed Annuities 1%
• Who can sell these products? It is based on your licenses, a broker may have an insurance license vice versa

It

There are no bad tools, just tools used for the wrong job.

• Since we are reassessing relationships this is a good time to ask your advisor
• How do they get paid? Incentive trips, commissions, fees, paid for plans
• What is your advisor licensed to sell?
• Does their firm have proprietary products?

Helpful Tools and Insights

• Check out your advisor, how are they registered?
• What does the alphabet soup on their business card

really mean?

• How much am I actually paying for my investments, in

addition to my advisors fees?

• All of the information listed above can be found at:

https://www.finra.org/investors/tools

What does the registration allow them to sell?

Debt

Debt and Divorce

• The impact of debt can last for

years to come.

• In an ideal situation you would

both walk away from this marriage without any joint debt.

• Often debt division is the

largest issue in a divorce, not asset division. When I talk about divorce being the biggest financial decision of your life, debt is a huge part of that. Actually the ideal situation is no debt at all, but that is not typically realistic.

Make a list of all of your debts

Include on that list the following:

• 1. How much is owed
• 2. The names on the account
• 3. The finance charges
• 4. Annual fees
• 5. Rewards points balance, if

applicable. You need to know what you owe before you can take action on how to handle it.

How to handle debt

• Do not start closing accounts.

This will negatively impact your credit.

• Call credit card companies and

ask to have your spouses name removed and ask your spouse to do the same.

• Make a reasonable plan to pay
• ff debt.

Consider all aspects of the debt

The actual cost of a debt is not just the amount owed. A $15,000 debt at 18% is considerably different than a $15,000 debt at 5% Are there other benefits? For example:

• ne credit card offers 2 airline tickets

per year.

Interest Accrues Every Single Day

• Transfer balances to a 0% interest card

if possible.

• Pay the same amount a month, but pay

in two separate payments.

• Utilize online payment systems and

establish upcoming payments.

• Example:
• Monthly Payment is $200
• Pay $100 on the 1st & $100 on the

15th

• Reduces the days interest is accrued.
• More of your payment is applied to

principle.

Helpful Tools and Insights

• Once a year you can pull your credit for free, visit Annual

Credit Report - https://www.annualcreditreport.com/ requestReport/landingPage.action

• Keep in mind that the creditors don’t care if the divorce

decree says that one party must pay a debt. If your name is on it, you are also responsible.

• Use this debt calculator to determine the true value of the
• debt. http://www.bankrate.com/calculators/credit-cards/

balance-debt-payoff-calculator.aspx

• Make the next best decision
• God gives us the desires of our hearts but he also expects us to make wise decisions
• Focus on abundance, not what you don’t have.