25yearsmlc 10 yrs later I File D (part 4)

[adinva]

Hi - so sorry about the recent tragedy. The shock can affect everyone around the incident, so hugs to you. I wanted to mention from my hard won experience that if you seek a financial advisor and would like that person to give you credibility in what you'll ask for if the case should go to court: a) a judge will give more weight to the opinion of a CPA than a CFP and b) if the advisor suggests their work has been helpful at trial find out how many times they have been an expert witness and to what effect. I ended up using my cfp's recommendation as a negotiating tool with H buy my L had warned me it was going to be pretty weak to the judge. Fortunately I didn't go to trial but it was close. YMMV but that was my experience here in VA.

[kml]

If he has the money to buy you out I would take it. One of my big regrets is that we did not have the kind of money it would have taken for ex to buy me out instead of alimony - and as a result, he has been resentful over what he was paying me (or what he mistakenly THOUGHT he was paying me) and so stuck me with every other expense for our adult children that he could weasel out of.

I often think that if it had been settled at the time of the divorce, we would be on much friendlier terms now.

So - things to think about in the buyout:

- how long an alimony would you likely qualify for if you went to court, given your ages and length of marriage?
- It was my understanding that at least in my state, alimony could ALWAYS be revisited - that is, if my ex became disabled or was fired or something, he could always go back to court and get the alimony changed. So having a bird in the hand is better than a possibility of future income that may or may not come true.
- He should not have cancelled the insurance, I suspect the court would have something to say about that. In my divorce my ex had to let me maintain insurance on him in case he died before paying me all the alimony he owed. (He did however insist I reduce it from the $500k policy we already owned to a $250k policy - lol, he didn't want me to have an "incentive" to have someone rub him out!!!!!!)
- the buyout should be based on his imputed income and yours, not on his retirement "non-income"
- the buyout is calculated taking taxes into account. So, for instance, let's say alimony was going to be $25k for 10 years. That would have been tax deductible to him, so if he's going to be in a high tax bracket (say his top rate is close to 50% between state and federal), it would only have cost him say $13k/year. You on the other hand have to pay taxes on alimony, so assuming your top combined tax bracket turns out to be 30%, you would possibly only net $17,500 a year. Times ten years that would be $175,000 total BUT they also calculate in the interest you could make investing that lump sum. Assumptions here make a big difference - for instance, assuming that you will put it in a mutual fund and it will make 7% a year is a very very bad assumption. But they will probably want to use something overly optimistic like this. You on the other hand might want to use something very pessimistic, like current bond or CD interest rates which are quite low. The truth is probably somewhere in the middle. A quick rough calculation using the Financial Mentor ultimate retirement calculator online (a handy easy tool which lets you change a lot of assumptions - although in this case I'm missing the relatively small amount of taxes you might pay on your investment income) shows that for ten years of alimony at a take home of 17,500, he would need to give you a lump sum of around $171k and change if we assume a 2% interest rate on that investment. If we assume a 7% interest rate, he only needs to pay you $131k. (this assumes that the lump sum he is giving you is marital assets that you do not have to pay taxes on).

Now - if you're in a position to use the money to pay off a mortgage on a home for yourself (that is, you can earn enough income to cover your other expenses until retirement) then you can actually make a guaranteed 4% on that money (or whatever your mortgage interest is.) There are arguments for and against paying off your mortgage this way, depending on your situation.

If you opt for the alimony route instead, then he HAS to allow you to keep an insurance policy on him, and I would fight to make him pay you the difference between the cost of a new policy and the (probably cheaper) cost of the old policy. Also insist on an automatic withdrawal.

Also, bear in mind, if some of the money that he is going to use to buy you out is in a 401k or some such, you will have to pay taxes on it when it comes out, just as you would on the alimony. In that case, you would need $187 k if assuming 7% annual growth of investment, or $244k if assuming a safe 2% growth rate. (If you use 4%, you would need a lump sum of $219k).

Odds are, if he hears the actual figures, he will want to pay you alimony instead as it's a better deal for him (and hope that you drop dead or he truly retires before he's done paying it all). So you will have to consider how much is it worth to you to negotiate, in order to have the bird in the hand.

[25yearsmlc]

Before I go into detail on KML/Own's comments -

I suddenly had a horrible thought given Ralph's recent actions.

Since it took some energy for h to call and cancel a policy I bought years ago, and am paying for, even in a greedy crazy mood it simply benefits no one to cancel it,

and only hurts me, and only if he dies...

I'm not saying I believe this, but could h be thinking of making an exit,

or is he just "insuring" that I not benefit from his possible death?

S31 said, and I'm quoting - "Dad's a candidate for suicide, mom... " (I suggested S31 call h's bff or h's brother, which is who s31 selected by saying "Maybe I'll call uncle M"...

so that's a sickening thought.

I THINK I'm mostly believing it's the latter - meaning that he's thinking "Oh, on the off chance I die, no way will evil stbX get a cent. I'll see to that".

but then S31 threw me off with his brutal truth.

I am exhausted from this emotional sick feeling. And I'm very tired of having it

[25yearsmlc]

If he has the money to buy you out I would take it.

Knowing h, there is no way he'll make a decent offer. He lacks negotiation skills (and it's something I've always managed for us.)

H doesn't want to pay ANY spousal support, just split the pensions and retirement savings. (I cannot access the retirement accounts for 2 years and he earns a lot as an anesthesiologist).





One of my big regrets is that we did not have the kind of money it would have taken for ex to buy me out instead of alimony - and as a result, he has been resentful over what he was paying me (or what he mistakenly THOUGHT he was paying me) and so stuck me with every other expense for our adult children that he could weasel out of.

point taken, KML. God knows I'll hear his crap the rest of my life. Plus I'd like to work and not worry that every time I get a promotion or bonus, h will want to return to court. As conflict avoidant as he is, when it comes to money, suddenly he's all about confrontation.

He's also not able to HEAR what is said. He hears what he fears.

My L said that when the judge ordered "temporary support in the amount of X", that h turned and blurted out that he's "not paying her that for the rest of my life!"


I often think that if it had been settled at the time of the divorce, we would be on much friendlier terms now.

I have thought of that^^^.

So - things to think about in the buyout:

- how long an alimony would you likely qualify for if you went to court, given your ages and length of marriage?

Assuming it goes like most, after 35 years of m, the advantage h has is that he can retire at age 65 at which point it would stop. Which is just 5 years and that makes me sad/mad

OR he'd keep working until whenever, and then I'd get some until then. So whichever is later, I'd get spousal support

unless I earn big bucks like h says I can!

Ironically, if we had divorced 10 years ago, or 15, I'd get spousal support at least half the length of the m, and CS...by sticking it out, I get less.

I'm not saying the guy has to be hitched to the plow for ME...but we all know h's resume is pristine and mine's the opposite, our moves all helped his career and hurt my career.

but that's life. At least I got all that time with the kids.

- It was my understanding that at least in my state, alimony could ALWAYS be revisited - that is, if my ex became disabled or was fired or something, he could always go back to court and get the alimony changed.

true in CA (though the law has changed about military disability if it hits 40% -- IF H goes that way - Congress says we both get it. Based on a case in which an amputee returned from combat and became an abusive alcoholic. 22 year marriage and he was fully disabled and the wife got nothing b/c disability is not divisible as marital property.

The law changed, thankfully, so that once a soldier hits 40% disability (I'm mostly sure of the numbers here) then both spouses get it so she won't be punished for the divorce but the disabled soldier won't lose his disability).

At this point none of that is relevant but it's something to bear in mind at time of signing.




So having a bird in the hand is better than a possibility of future income that may or may not come true.

if the numbers work, I agree


- He should not have cancelled the insurance, I suspect the court would have something to say about that. In my divorce my ex had to let me maintain insurance on him in case he died before paying me all the alimony he owed. (He did however insist I reduce it from the $500k policy we already owned to a $250k policy - lol, he didn't want me to have an "incentive" to have someone rub him out!!!!!!)


wtf? We have kids & i bet h leaves them nothing. I really think so. H is gone

- the buyout should be based on his imputed income and yours, not on his retirement "non-income"

Good God, let's hope so


- the buyout is calculated taking taxes into account. So, for instance, let's say alimony was going to be $25k for 10 years. That would have been tax deductible to him, so if he's going to be in a high tax bracket (say his top rate is close to 50% between state and federal), it would only have cost him say $13k/year. You on the other hand have to pay taxes on alimony, so assuming your top combined tax bracket turns out to be 30%, you would possibly only net $17,500 a year. Times ten years that would be $175,000 total BUT they also calculate in the interest you could make investing that lump sum. Assumptions here make a big difference - for instance, assuming that you will put it in a mutual fund and it will make 7% a year is a very very bad assumption. But they will probably want to use something overly optimistic like this. You on the other hand might want to use something very pessimistic, like current bond or CD interest rates which are quite low. The truth is probably somewhere in the middle.

i will have my cap/cfp (I think she is both) do this calculations. Good call


A quick rough calculation using the Financial Mentor ultimate retirement calculator online (a handy easy tool which lets you change a lot of assumptions - although in this case I'm missing the relatively small amount of taxes you might pay on your investment income) shows that for ten years of alimony at a take home of 17,500, he would need to give you a lump sum of around $171k and change if we assume a 2% interest rate on that investment. If we assume a 7% interest rate, he only needs to pay you $131k. (this assumes that the lump sum he is giving you is marital assets that you do not have to pay taxes on).

how would they Not be marital assets?

Now - if you're in a position to use the money to pay off a mortgage on a home for yourself (that is, you can earn enough income to cover your other expenses until retirement) then you can actually make a guaranteed 4% on that money (or whatever your mortgage interest is.) There are arguments for and against paying off your mortgage this way, depending on your situation.

i now have zero real estate. But thats something I need to get

If you opt for the alimony route instead, then he HAS to allow you to keep an insurance policy on him, and I would fight to make him pay you the difference between the cost of a new policy and the (probably cheaper) cost of the old policy. Also insist on an automatic withdrawal.

I'm still smh...idiot crazy jerk

Also, bear in mind, if some of the money that he is going to use to buy you out is in a 401k or some such, you will have to pay taxes on it when it comes out, just as you would on the alimony. In that case, you would need $187 k if assuming 7% annual growth of investment, or $244k if assuming a safe 2% growth rate. (If you use 4%, you would need a lump sum of $219k).

evidently if you are under 59, the 401k is taxed much less than an IRA is, at time of divorce. Don't ask me why, ask Congress.

Odds are, if he hears the actual figures, he will want to pay you alimony instead as it's a better deal for him (and hope that you drop dead or he truly retires before he's done paying it all). So you will have to consider how much is it worth to you to negotiate, in order to have the bird in the hand.

I think if he gives me ALL of the retirement accounts, he'd still come out ahead over spousal support but I'm not counting the tax consequences, but I'd agree that it's better for me than dealing with this crap.

Plus I could remarry (I mean someday!)

What a fool...stupid greedy fool.

I guess OW makes a lot of money b/c that is clearly very important to h. Along with lots of adoration.

My son is trying to be the man of the house. He submitted an affidavit today. UGH...

and d19 is really hurt that h won't pay her college. It's $60k a year (- the $15k scholarship and we paid the others college).

H says I can pay it from all the money HE is giving me. Which is odd, given that I'm getting nothing from him above random small amounts I discover in my bank account.

Let's hope that means he thinks he will have to pay and thus, he's only a selfish jerk blaming me, as opposed to blaming me insanely and not paying me...

Sometimes I want to reach out to say "this CANNOT be what you wanted..."

which is a really bad idea of mine.

[kml]

assumes that the lump sum he is giving you is marital assets that you do not have to pay taxes on).

how would they Not be marital assets?

If he gives you a lump sum at the divorce that comes from, say , his half of the house equity or from non-retirement savings accounts - that's just a division of assets and there are no tax consequences.

On the other hand, if the lump sum comes from him giving you his half of the 401k - you will pay income tax on that 401k money as you withdraw it. (I'm not sure but I think there's an option for a limited time around the divorce to withdraw money from the 401k without having to pay the 10% early withdrawal penalty, but you still have to pay ordinary income tax on it unless you roll it over directly to an IRA or another 401k.

Also, btw, you CAN take distributions from your 401k earlier without penalty through Section 72(t) under a rule about substantially equal payments. It requires you to take even payments for five years using one of three amortization schedules; since you're so close though you may not want to tie yourself to that withdrawal for five years.

[dale165]

25,

Since I'm a CPA I can't give advice plus you didn't ask me for it but just wanted you to know kml layed out some good general advice. I've done plenty of these since our clients get divorced sometimes. I've seen them pissed, crying, and everything in between. I assisted with no emotions bc I didn't understand but I sure do now.

Anyways, hope you have a great day. Just wanted to tell you thanks for posting solid advice on my page and when I see your name pop up on home page I read everytime.

You seem like a special lady, hang in there.

[25yearsmlc]

thanks guys (KML, Dale, particularly)

So as a general underlying assumption (knowing I'm going to see a financial planner for this anyhow)

figure out what the spousal support would be for 5+ years, AND factor in that I'd pay taxes on that as income

and h would get to deduct it (though he's a doctor he is SO pain avoidant that he will tune out about money issues like tax consequences. This was my arena but my focus was on a good return on investments, not divorce...H will get glazed furious eyes and wait for the "authority figure" to tell him which number is higher)

ANYHOW that ^^rant is over...

so I add up whatever lump sum he'd offer AND then factor in the tax consequences (I heard the financial person say the 401k was treated differently for those under 59 in a divorce, from other IRA's)

I'd roll it over until I know what the heck I'm going to do or where to live. Am I missing something there? I like the stock market and have done well there, but I'd prefer it outside of a retirement account for reasons you guys can figure out.


I'd still get a pension too, but that is taxed also. (If h thinks I will waive the pension share, he's mistaken. I am entitled to that by law, not HIM. He does have to "agree" but I will not give that up. It's a "free" annuity and there's no amount in the retirement account that will make up for that) - unless h has been hiding money super well OR unless his dad gives him some of his expected inheritance early -which btw, he did for h's brother. Hmmm, now that i think of it...that may be how h is pretending to have retired...ANYHOW

IF NOT for rent or a mortgage in this pricey area, I'd be fine on the pension alone, and whatever I earn would be gravy.

The retirement accounts would be my next egg. Oh but lest we forget, half that retirement is mine anyhow, I will bet you both some Gin & Tonics or the drinks of your choice, that h "Forgets" that half is mine anyhow. Yep that thought just occurred to me and it's safe to assume he somehow did not compute that.

i'm telling you that when it comes to money he is very weird and fear based.

SO I can either make all my loved ones move to a cheaper real estate area, or - or I don't know.

Live cheaply but have fun, overseas for awhile - and come back when I'm ready to settle somewhere,

AND OR buy some investment properties with positive cash flows in much cheaper areas I'm familiar with and in which I could live if pressed b/c I like them (e.g. San Antonio - a place we were stationed and still have friends in)
It is a place I could live even though I have no family there. Very affordable and I like drier climates.

At some point - 65?? Do we all try to live near our grandkids or siblings?

Where's the manual on this???

Lots to figure out.

[25yearsmlc]

Woke up at 5 am feeling weird and anxious but did not recall any dream. Forced myself back to bed and woke up at 9 with a dream I DID recall

and not a good one.

H haunts my dreams and interferes with my sleep. Takes up way too much of my day time too.

I know I can change the day time obsession by GAL and other than GDC, I can and must and WILL do that.

But dang, the nights are hard.

I can see why dating would be so appealing. I really can. Fill that void or at least avoid looking at it.

[Cadet]

his dad gives him some of his expected inheritance early

I am not sure if you are consulting with a lawyer but my belief, at least in the state I live in is that inheritance if not co-mingled with marital assets is not part of a divorce agreement.
If it is kept separately in a non-joint account it can be exempted.

[25yearsmlc]

his dad gives him some of his expected inheritance early

I am not sure if you are consulting with a lawyer but my belief, at least in the state I live in is that inheritance if not co-mingled with marital assets is not part of a divorce agreement.
If it is kept separately in a non-joint account it can be exempted.

Cadet - yes I understand it's (usually) not marital property

Generally In CA they only consider it as part of the overall ability to pay. H claims he is unable to pay b/c, you know, he's 60 and "retired" and (never mind the contract and the buy out and the 10 year plan...) and shared living expenses with OW may also play a role in that, but I'm not certain. H was debating the sep date too, by a few weeks. I could not understand why b/c we were "married' in every way till the day he left but maybe he got money and commingled but I think he just wanted to not look as if he left a w after her release from the hospital and had her sign a note waiving rights to a joint account.

Both scenarios stink...I mean, ouch.

Anyhow MY main point was mostly that it's inexplicably crappy -given the reality of his future finances--

- for h to do things like send half of the NET of the pension to me, to save a few hundred bucks as if it won't be noticed?? What does he think when he does that? What spin does he put on that? I know, I Know, don't try to put a rational spin on irrational behavior. Plus, his anger is so odd and his narrative is so distorted I cannot spend time wondering that but I DO want the money!!

AND

he contacts our kids (& God only knows who else) to complain about me and to play the victim role BIG TIME

even telling s31 he'd "retire before giving her ALL this money - b/c he will DIE if he has to work that hard"

as if 1) temporarily paying me a portion of "his" income would somehow make him work "harder" and die, and

as if
2) he isn't getting millions from his dad -

and so this whole narrative of his being forced to live in a hovel - or OW's house?? and worked to death is pretty much insane victimhood.

Not sure if you read this but he also cancelled a life ins policy I got on him when he was deployed 5-6 years ago.

Mind you, I am the payor and have been paying the premium out of pocket or my credit card, for the whole time.

I mean, I don't know how he recalled having this policy,

but I know It took some effort on his part to call USAA to cancel the policy (he's the "owner" even though I got it and pay for it etc)

and the call notes said "COL/DOCTOR H was informed wife had been paying all premiums. COL/DOCTOR h insists the policy be cancelled."

Now, me getting another policy (more expensive due to his age) still requires him to approve it , which I think it is safe to say is not likely...


yet it cost him nothing for me to have that policy. I'm leaving whatever I own at time of death, to our children. So in effect he lessens what they'd get too.

Other than planning to off himself soon, and to punish me more

(and for what??? I swear, hand to God I'm baffled that he sees himself as the aggrieved party in this. I would almost prefer pity)

- the only other explanation for the policy cancellation is that he wants to make sure I get as little as possible in any way - ever-- to control from the grave? Why does he care?

I'm the mother of his children. Why would he want me to be in a sad financial position and or to give our kids nothing if we both pass away in the next decade?

Or maybe, maybe he thinks this will pressure me to settle?? (I will be inserting a clause for life insurance, btw and he can pay the increased costs -so that's stupid financially).

But If it's that, if he thinks that ^^motivates me MORE to settle, OMG what a fool.

He's got such a bad knack for tactical negotiations.

Just irritated me so much that it took all of my willpower & my sisters, not to text him a blasting message.

Just to say how little self awareness he has & NO insight into how his choices are viewed by those who know...

(**Yeah, I know. I'll send the exact right words in just the correct order and...and....

THEN he'll see!!)**