What is Collaborative Divorce?

What is Collaborative Divorce_WolfBridge Financial

Divorces aren’t easy.

No matter what the final reasoning was behind making this choice – it was no doubt a difficult one. At one point you loved this person so much that you envisioned your entire life with them. Now you have a family and need to figure out the best way to transition into your new life.

Many couples end up in lengthy, high conflict situations with attorneys on both sides battling to divide property and custody of children. Other couples may have no problem splitting and simply need help getting paperwork done – the rest they can figure out themselves.

For everyone else there is an option you may or may not be familiar with yet.

Collaborative Divorce.

Couples who may not be on the same page in terms of property division, child custody and spousal support, but are willing and able to do whatever it takes to make the process run smoothly can really benefit from this way of proceeding with their divorce.

In short, collaborative divorce is a process in which you and your spouse negotiate an acceptable agreement with a variety of professionals (or a team) helping navigate the process. This may include an attorney, financial specialist, child specialist and co-parenting advisor.

There are many benefits to handling divorce in the hands of a group of professionals with your financial and family situation in mind including:

  • No trial or litigious hearings and agreement of legal procedures to cut down expenses
  • Stability through a temporary agreement
  • Voluntary exchange of information
  • A negotiated a settlement
  • Come to an agreement on how post divorce issue will be handled.
  • Mediation Training
  • Neutral Financial Specialist who helps you and your spouse understand any issues surrounding your divorce

Main Goals of Collaborative Divorce

While it is nice to stay out of court and save a little cash, the main benefit of collaborative divorce is that it puts the children first. The child specialist works as the voice of the children throughout the proceedings while a co-parenting specialist helps create a plan for how you can most effectively take care of your child after the divorce is complete so that he/she is not negatively affected by the experience.

At the same time, the financial specialist will serve as an un-biased intermediary to help resolve property and budget issues so that there isn’t any unnecessary burden on either party and that things are split up amicably.

What does a Collaborative Divorce Cost?

It depends on the team of professionals you end up working with. One thing that is for certain is that it is a lot less expensive than a traditional divorce. You are not paying for costs associated with hearings, discovery of information or even court delays. Instead you are typically paying hourly fees for the help of the aforementioned professionals as they help try and make this experience a much more pleasant one.

Where can I find out more on Collaborative Divorce?

The links below can be very helpful for those considering a collaborative divorce in the state of North Carolina.

Despite Consumer Confidence Growth, We Still Fear Tax Hikes

According to a recent report from Bloomberg News, “the number of Americans saying the U.S. economy is getting better rose in March to the highest level since 2004 as a decline in claims for unemployment benefits offered more evidence of a labor-market recovery.”

The Labor Department showed jobless claims had decreased by 5,000 to 348,000 last week. That number represented the lowest since February 2008.

Despite those positive numbers, the fear of tax hikes coming down, and coming down soon, has consumers running scared.

Economic prognosticators are sure those tax hikes are coming soon due to tax cuts, wars, the recession and our growing population of retirees. Plus the federal government continues to spend more than it takes in.

These same experts say that in 2013 the top U.S. income bracket will go from paying 35% to almost 30%.

Tax Hike Fear Fueling Roth IRAs

Already the most popular retirement saving product, holding $4.7 trillion in assets as of the end of 2010, according to Mintel Market Research, Roth IRAs are gaining popularity as consumers look for savvier ways to protect their money.

Now read this breakdown from Ross Kenneth Urken on why consumers are doing the flocking to Roth IRAs:

The Roth Individual Retirement Arrangement is a retirement plan that allows you to withdraw money tax-free in retirement. That contrasts with traditional IRAs and retirement plans, that let you deposit pre-tax funds, but tax your withdrawals.

Now, in a traditional IRA, you can deduct your contribution (up to $5,000 annually) from your taxable income. But let’s think about the future.

There’s an old business school trick called the Rule of 72 for estimating how many years it will take for an investment to double: Divide 72 by your average return on investment percentage, and you have a rough answer. So, if someone earns 8% on a Roth IRA, — 72/8 = 9 — their money will double every 9 years. Thus, $5,000 invested at age 30 will become $10,000 at 39, $20,000 at 48, $40,000 at 57 and $80,000 at 66. If that were a traditional IRA, the investor would then have to pay income taxes on the $80,000.

With the Roth, you don’t get a deduction for your contribution, so you pay the taxes on the initial $5,000 you put in. Your investment grows the same way, but when you take money out, it’s tax free. Basically, you’re choosing between paying taxes on the seeds or on the crops.

The crux of the matter comes down to people’s belief that taxes will continue to increase. Based on that premise, it’s better to pay the taxes on your initial investments now, while rates are lower, than to wait and pay a higher rate on your total returns when you remove the money at retirement.

Bottom line – your Roth is never going to be taxed again, has capital appreciation as long as it grows and you get it back tax free. This means even more to younger workers who are unsure that Social Security will be available to them once they retire.

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What do you think? Do you have a Roth IRA? How are you feeling about the economy in 2012?

2011 North Carolina Tax Return Pocket Card

The WolfBridge Financial blog has been focusing a lot on taxes lately – in case you hadn’t noticed.

We know firsthand how stressful tax season can be, and want to help prepare everyone in the Triangle so that you can focus more on your family and friends, instead of how much money you owe.

Here are a few things we’ve covered so far:

Today we want to help you even more.

As a sports fan, I’ve always been fond of pocket schedules and calendars because you can keep them in your wallet and they don’t make you look like George Costanza (see below).

Introducing the 2012 North Carolina Tax Return Pocket Card

It may not be all that fancy, but we managed to put together a pocket card that has many of the key dates and details you’ll need leading up to April 15, 2012.

So instead of having to dig around on the Internet, or calling the (yikes!) NC Department of Revenue, you can simply download our card and fold it up. Then just place it in your wallet, purse, carry-on, tablet cover or anything else readily accessible and you’re ready to file those pesky taxes.

Enter the WolfBridge Financial Military Veteran Tax Services Giveaway

Have a military veteran of the Persian Gulf War (Operation Iraqi Freedom) or Afghanistan War (Operation Enduring Freedom) in your family?

As a veteran owned business, WolfBridge Financial prides itself on giving back to our military veterans. To showcase that support we thought a giveaway of financial services to military veterans would be a great way for families to show their heroes just how much they mean to them!

If someone in your family is a military veteran of the Persian Gulf War (Operation Iraqi Freedom) or Afghanistan War (Operation Enduring Freedom) then entering them into the contest is simple:

1. Pull together your heroes name, military branch, war served and a few words about them.
2. Place the information, along with a way for us to contact you, on the WolfBridge Financial Facebook Page or in the Comment section below this blog post.
3. Each time your heroes entry is “liked” on Facebook, someone comments on your post in the blog, or your post is linked to on Twitter using the Hashtag #WolfbridgeHeroes– you get 1 point. The military veterans with the most points at the end of the contest will receive the following prizes.

**After you nominate someone make sure you tell your friends and family so they can help you win!**

1st Place: Free 2011 or 2012 Tax Services – State and Federal Filing
2nd Place: Free Financial Assessment with Michael Kothakota, CEO of WolfBridge Financial & Military Veteran
3rd Place: $200 Donation to either the Wounded Warrior Foundation, Special Operations Warrior Foundation or Iraq and Afghanistan Veterans of America.

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To help get you started, below is a sample contest entry put together by our staff for WolfBridge Financial CEO and military veteran, Michael Kothakota:

“Michael Kothakota, North Carolina National Guard, Veteran of Operations Iraqi Freedom and Enduring Freedom. Loving father and proud veteran.“

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Please spread this to as many people as you possibly can so we can shine a little extra light on our heroes at home and remind everyone who keeps us all FREE!

If you have any questions about the WolfBridge Financial Military Veteran Tax Services Giveaway please CONTACT US.

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Additional Giveaway Details

Giveaway Entrance/Point Gathering Period: March 1, 2012 at 12:00 AM through March 24, 2012 at 11:59 PM

Winner’s Announcement: The winners will be contacted on March 25, 2012 and announced publicly on March 26, 2012 on the WolfBridge Financial Blog and Facebook Page.

Prizes: Each winner will speak with a WolfBridge Financial representative about how and when they would like to receive their prize. Prizes may be redeemed for 2011 or 2012 tax season.

Entrants: Must nominate a veteran of one of the aforementioned wars. The veteran must also be a resident of North Carolina.