The Complete Financial Handbook for the Newly Divorced

By Jeffrey S. Froshman

The Complete Financial Handbook for the Newly Divorced is a useful, handy, easy-to-read guidebook, full of interesting and meaningful information that most newly separated or divorced individuals should be thinking about and, hopefully, implementing.

This book will address and help to solve the Question of "What do I do next?"

• Language: English
• Publisher: AuthorHouse
• Release date: Mar 9, 2009
• ISBN: 9781467867153

Jeffrey S. Froshman

Jeffrey Froshman is the owner of Froshman Financial Investment Advisors, with offices in Capitola and Campbell, California. Jeff is a CERTIFIED FINANCIAL PLANNER, Certified Public Accountant,MBA (Taxation) and a Registered Investment Advisor. He has been teaching in the School of Business at California State University Monterey Bay since 1996. The University has given him the title of Distinguished Lecturer. Jeff is a registered principal with Foothill Securities, Inc., located in Mountain View, California. Jeff resides in Santa Cruz, California with his wife of 30+ years, Merle. They have one daughter, Kendra, who lives in San Francisco. CFP and CERTIFIED FINANCIAL PLANNER are registered trademarks of the Certified Financial Planning Board of Standards, Inc.

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© 2009 Jeffrey S. Froshman, CFP®, CPA, MBA. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 3/5/2009

ISBN: 978-1-4389-5033-4 (sc)

ISBN: 978-1-4389-5032-7 (hc)

ISBN: 978-1-4678-6715-3 (ebk)

Printed in the United States of America

Bloomington, Indiana

Contents

Forward

Sonnet

Chapter One

You Are Not Alone

Chapter Two

Disclosure and Support

Chapter Three

Dividing Up the Property

Chapter Four

Pay Yourself First

Chapter Five

Having a Financial Plan

Chapter Six

Investing and Understanding Risk

Chapter Seven

Insurance

Chapter Eight

The Kids

Chapter Nine

The Next Mate

Chapter Ten

All Things Must Pass

Concluding Remarks

About the Author

GLOSSARY

I would like to thank:

Chip Rose, who got me thinking that I can do this.

Sabin Alibrandi, Jason Braley and Pam Leaverenz for giving me the swift kick when needed.

My readers, Bill Fitler and Susan Johnson for their insight and commentary.

Cate Miller, CPA for her valuable research and enduring friendship.

Particularly, my wife, Merle, for her patience and putting up with my antics these past 30+ years.

Lastly, to Astrid Berg, my editor, muse and conscience - May this be the first of many.

Forward 

While we enter the marital state with the greatest of hope and anticipation, more than 50% of first marriages end in divorce.  Some occur within the first twelve months of marriage, while others occur twenty or even thirty years later.  The fact is that many people end their marriage not knowing what financial steps they should be taking.

The Complete Financial Handbook for the Newly Divorced is not meant to be a 1,000 page treatise on every financial topic available.  It is meant to be a useful, handy, easy-to-read guidebook, full of interesting and meaningful information that most newly separated or divorced individuals should be thinking about and, hopefully, implementing.

In my practice of Investment Advisor, Financial Planner, CPA and Consultant, I have met and dealt with numerous divorced individuals seeking the answers of what do I do next?  It is my fervent desire that this book will answer some of those questions, and that with greater clarity, these individuals eventually heal and rediscover love.

Sonnet 

If love could be just one more word of praise

Confusion would end and peace would come to earth.

But love, sweet love, possesses us in ways

That pains our heart and shames our sacred birth. 

A song, a tear, a word of godliness

Compares with only fragments of a love.

When passion finds the soul a holiness

Surrounds the organ, warmth will come above.

For this one feeling life would be complete

And my still heart so full of joy would part

To give me life and breath and a belief

That love is gentle, not to break the heart.

But if my heart is split I’ll need no knife

For love is love but so may life be life.

Chapter One

You Are Not Alone  

While most people do not expect that their marriages will end in divorce, current divorce statistics in America are estimated at 50%. Second and third marriages end in even a higher percentage, ranging from 60-70% (www.divorcestatistics.org). In spite of the statistics, we truly believe in to death do us part. Divorce can be one of the most difficult experiences in one’s life. On the list of most stressful life events, the Garland Science Group of the United Kingdom report divorce being second only to death of spouse (www.garlandscience.co.ukltextbooks). Anger, guilt, grief and fear are part of the emotional process that then influence decisions regarding things such as child custody, who continues to live in the home and how to work out financial matters. Hence, during the process, you need all the support you can get. Friends, family or professionals can help with the grief and emotional issues. Most people divorcing will also hire attorneys or a mediator. In addition, it is useful to get tax advice from a competent professional, such as a CPA or Enrolled Agent. And it is imperative to receive top-notch financial and investing advice. I will first address the uses of mediators and attorneys and will then describe the role of the financial advisor.

Mediators work well when the two parties want to end the marriage as amicably as possible and spend the least amount of money possible. Unlike attorneys, mediators do not advocate for one person in the dissolving partnership. They do not take anyone’s side. Instead, a mediator facilitates the process of communication and negotiation between the parties. Mediation takes much less time than going through full litigation proceedings of the actual divorce. Mediation has no rules other than fair play and full disclosure (described in Chapter Two). A good mediator will guide the process and allow the two of you to set your own terms of the divorce and decide how property should be split. You set the parameters as to who gets which asset, who splits what debt and, often the most difficult decision, with which parent the children will be living and who has the visitation rights. With most of my divorced friends and clients, both parents have custody, and the children often live with both parents.

When using a mediator, you can certainly have an attorney advocate as well. You can also bring your financial advisor along to a meeting with your attorney or mediator. It is ultimately the two people involved in the divorce that must agree, in as little time and expense as possible, on the asset split. This is where mediation shows its greatest strength. When arguments