Welcome to Judith  F. Sterling, CDFA, CPA
Ask Yourself Before Considering Divorce
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The Role of a Certified Divorce Financial Analyst
Why Hire a Certified Divorce Financial Analyst?
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About Judith F. Sterling, CDFA, CPA
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Client Comments

Will I be able to keep my home? There are many factors which go into the decision to keep the family home: the ability to pay the mortgage, property taxes, and insurance; whether the children will be comfortable in another home and a potentially different school district; whether there are offsetting assets for the out spouse; the potential loss of the out spouse's $250,000 capital gain exclusion when the home is eventually sold; and the ability of the spouse who retains the home to refinance the mortgage, if necessary. The family's entire financial picture needs to be analyzed to see if it is in anyone's best financial interest to retain the family home.

Do I have to give up half of my 401(k)? While there is not a tax consequence to dividing retirement assets incident to a divorce, when your retirement assets are withdrawn they are taxed as ordinary income. Care needs to be taken to ensure that the basis of all assets is determined before there is discussion around which assets either party is to keep. $100,000 worth of retirement assets is not the same as $100,000 worth of cash. In addition, there is the issue of whether the employer's plan even allows a division. There have been instances where an agreement has been made to divide a plan when the plan does not allow it. This can be a costly mistake. Another asset should be found before the marital agreement is signed to offset the half of the marital portion of the plan that would go to the non-owning spouse.

How will we divide the assets and debts? A thorough examination of all the finances needs to be made and put into one readable report. The original basis/cost of all the assets should be determined. My reports will show the real value of each asset. Again, a dollar may not equal a dollar. Debts need to be reviewed for interest rates, minimum payments, length of years to pay off, and the ability to pay off immediately. With all this knowledge you will be able to negotiate an equitable division.

Will I have to pay taxes on spousal or family support? Family support is combined child and spousal support. Child support is never taxable or deductible, but both family and spousal support are taxable to the recipient and deductible to the payor. Care must be taken in deciding yearly support amounts. Certain step-downs in yearly amounts will trigger the IRS to deny deductibility. My analysis takes into account these tax issues. In addition, certain levels of family or spousal support will mean quarterly estimated income taxes will need to be filed and paid.

My spouse has stock options, restricted stock benefits, and other employee plans. How will I understand these complicated values and how they can be divided? My analysis will give a complete breakdown of their values, how they can be divided according to the employee plan documents, and potential offsetting assets. We will discuss the pros and cons, tax consequences, and current availability of these assets for division.

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DISCLAIMER:The information you obtain at this website is not, nor is it intended to be, financial or legal advice. Jude Sterling recommends you consult with a financial or legal expert for individual advice regarding your own situation.