4 Dissolution Tips All Teachers Need to Know

Teachers, if you are in the process of terminating your marriage, these dissolution tips are for you.

Teachers hold a special place in my heart for many reasons. For one, early in my career, I was a teacher. I earned my Master's in Education and have made quite a few teacher friends over the years. Additionally, I had the pleasure of having some fabulous teachers throughout my education. My children have also been blessed with some wonderful teachers who truly care about their success.

Often, when I meet with teachers who are faced with the end of their marriage, they realize that they do not have a complete understanding of the family finances and their retirement benefits, in particular.  Many do not even realize that they have options when it comes to their pensions. Teachers, you are not alone! It is my passion to provide the education you need to feel empowered as you go through your divorce.

Here are 4 dissolution tips every teacher should know:

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What is considered separate property in a divorce?

I often have clients come in who are misinformed about separate property and which assets should be divided in their divorce. Since I'm in Ohio, I will use that as my example. Ohio is an equitable division state. That means that a couples' marital assets are divided equitably in a divorce. It's important to note that equitable is not always equal but I will come back to that in another post. The question, however, is what constitutes a marital asset. All else would be considered separate property.

Pensions in Divorce

I hate gender stereotypes but I see this all the time so I think it is worth calling it out. I have never once had a man come into my office and say, "She can keep her pension, she earned it" while I frequently hear from female clients, "He can keep his pension, he earned it." I'm hoping others working in the divorce field have not had that same experience.

The pension is commonly the largest asset of the marriage.  If all or a portion of the pension was...

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Social Security Benefits for Divorced Spouses

There is a great deal of confusion around Social Security benefits under the most straightforward circumstances. When it comes to social security benefits for divorced spouses, it's even more complicated.

First, it's important to note that social security is not divisible as an asset in a divorce. However, you may still be able to collect on your ex-spouse's work record. For many, social security is a crucial source of income in retirement, so it's essential to understand the rules for planning purposes.

Related post: What Everyone Ought to Know About Divorce and Retirement Accounts 

Spousal Social Security Benefits for Divorced Spouses

After you are divorced, if you were married for ten years or longer, you might still be eligible for your spousal benefit on your ex-spouse’s record. You're eligible if you meet the following criteria: 

  • You are unmarried, and you are age 62 or older;
  • Your ex-spouse is entitled to Social Security retirement or...
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401K in Divorce: A Tip That Can Save You Thousands

There are many expensive financial mistakes that are commonly made when people are going through a divorce. It makes sense. Emotions are running high and it's common not to want to engage a financial professional if you are already paying legal fees. That said, the cost of a financial professional relative to the amount they can save you in financial mistakes is minimal. One of the most common financial mistakes I see is how money is withdrawn from a traditional pre-tax 401K in a divorce.

NOTE: I want to be clear that I'm not talking about just any retirement account here. There is a lot of confusion when I'm talking with clients about types of accounts. In this post, I am specifically referring to a pre-tax 401K account that is still held with an employer (not one that has been rolled into an IRA).

Unfortunately, going through a divorce leaves many people completely cash-strapped. While not ideal, if you have not built up enough liquid savings, you might be considering a withdrawal...

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QDRO: I need a what??

What does QDRO stand for anyway?

QDRO stands for Qualified Domestic Relations Order. If part of your divorce settlement includes a division of retirement assets held with a current or former employer, you may need a QDRO (Qualified Domestic Relations Order) or similar document, depending on the retirement plan. A QDRO is a document that gets filed with the plan administrator that tells the plan how the account will be divided.

A Costly Mistake

One of the mistakes that I see people make when dividing assets, is simply dividing each account down the middle. Seems like it would be fair, right? While it might be fair, it may also cause you to incur more costs than you would, if you were a little more creative about your settlement.

There are a couple of costs to consider. There is a cost to having someone draft the QDRO, which generally ranges from $450-$1000. Additionally, each plan charges an administrative fee on their side as well. That fee generally...

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Valuing a Pension for Divorce is a Wise Investment

Are you losing thousands of dollars because of your financial fears during your dissolution or divorce?

The cost of the divorce itself is one of the biggest fears I hear from clients. There is no question. It will generally take longer and cost more than you expected. However, that does not mean it's a good idea to cut corners.

Valuing a pension for divorce: Don't cut corners

One frequent corner cut is a pension valuation. Pension valuations do not take a lot of time. However, they do require you to work with someone other than your attorney. Thus, even when recommended by their attorneys, many clients choose not to have them done.

It is not even necessary to meet with your valuation expert in person. All required information can be provided via phone/email. In some cases, the attorney can even provide all of the relevant information. I recognize that it can feel stressful and overwhelming to work with yet another professional and have yet another bill to pay. However, it could...

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