SHAWN ANDERSON: And even amicable divorces can be very complicated. If you're splitting up, it's very understandable that you want to put up the legal work, paper work and distraction behind you, but not following through on certain things can have significant financial consequences.
HILLARY HOWARD: Joining us in studio to talk about it Dawn Doebler; Senior Wealth Advisor at Bridgewater wealth and cofounder of Her Wealth'. Dawn, what should people do after divorcing to make sure their finances don’t take such a big hit?
DAWN DOEBLER: Well, you know Hillary at Her Wealth we help existing clients through divorce and many of our new clients are actually women who just went through divorce proceedings. And what we find is they're trying to build a new financial plan, but we really need to take a look at what is in their divorce agreement and understand. And what a lot of people don’t realize is that, when you’re splitting assets and executing the agreement, most of that does not require legal counsel. So many times, you and your ex-spouse are working through the execution of the document.
I went through a divorce, I know what that’s like and I love checklists, so I came up with the idea to come up with a checklist for women to use. And what we like is that it tells them what needs to be done and I also think it’s a really great sense of accomplishment; they can go through the list, check things off and have that sense of moving on. And in fact that's what we call it, we call it the Moving On Post-Divorce Checklist'.
SHAWN ANDERSON: Going through those items on the checklist, I can imagine it to be a very emotional experience, but then as you say at the end a chaotic feeling.
DAWN DOEBLER: That's right and you know one of the things that we struggled a little bit with is; there are a lot of things on this list if you look at it. So we split it down into kind of bite-size pieces and broke it down into four major categories so that people can kind of work through each section.
The first one is what you might expect ''division of property'', basically splitting up the assets. It can be tricky though, if you have a pension or complicated retirement account or if there’s a business involved.
The second section ''child support'' actions. People understand child-support payments, but they don’t really realize oftentimes that you do need to split things like summer camp and sports and other costs and if you don’t have a good system to keep track of those cost, you can really lose a lot of money if you’re not going back to your ex-spouse to get their portion.
Another section is ''tax related actions''. I could spend an hour talking about this, but basically very important to understand tax ramifications; couple of things people need to do oftentimes change their tax withholding because now they're filing single, paying higher taxes and considering IRA contributions if you're woman receiving alimony.
And then lastly ''estate plan actions'', this is a huge one. It is very, very important to change your estate plan, make sure beneficiaries are all lined up and that your children are protected if something happens to you.
HILLARY HOWARD: We only have about 30 seconds left. What can people do on their own and what do they really need professional help with?
DAWN DOEBLER: On the last page of the checklist, you'll see a section that talks about things you can do on your own, most related to changing your name if you did that in your divorce. You do also want to change or check your credit report, also learn about Social Security benefits which you may qualify for as an ex-spouse. So you can go to Bridgewaterwealth.com, go to Her Wealth we have the Moving On Checklist you can download, it’s also on WTOP.com in our article.
SHAWN ANDERSON: You did all our work for us Dawn, we were about to read that. Thank you so much.
HILLARY HOWARD: Thanks Dawn.
SHAWN ANDERSON: Dawn Doebler with us here live on WTOP with Bridgewater Wealth in Bethesda.
Shawn: Now you hear all kinds of deals about leasing cars, how can you negotiate a better deal if you want to lease?
Nina: Okay, well many people don't realize that they can actually negotiate the sticker price on a leased car in the same way that you would do that if you're buying a car. And since when you lease -- when you're, you know, your lease payments basically cover the depreciation, the difference between the sales price and the residual value. So it's definitely in your best interest to try to reduce that sales price as much as possible because then you'll pay you know, smaller dollars over the life of the lease. Make sure you pay attention to the down payment at the lease signing. And so here's an example, you might see an ad that says you know, lease payment is only 1.99 a month and that sounds like a great deal for thirty six months. The catch is, is that it might require a $3,600 down payment. So, if you amortize the down payment, then actually that 1.99 special, becomes 2.99. So, you really have to kind of look at total costs.
And then lastly, dealerships use the term, money or lease factor, when they're calculating your financing costs and a lease factor is not the same as an interest rate. So, you have to make sure the dealer converts that lease factor into a comparable interest rate so you know what your financing charges are.
Shawn: At the end of the day, does one method wind up being more expensive more often than the other, or can we tell that?
Nina: You know what, it really depends on how long, if you're going to hold the car for a long time, you're better off buying. But if you know, and if you're not, if you just really enjoy driving and you want to have a new car, then go ahead and lease. I mean, there's pros and cons to both, to be honest with you, it's not one size fits all.
Shawn: Alright Nina, great. Happy Thanksgiving to you. Alright, Nina Mitchell is with The Colony Group, for more go to wtop.com and search Her Wealth.
Consider this your training manual to get and stay financially fit for life!