TAX CUTS AND JOBS ACT (TCJA) OF 2017 COMPLICATES POTENTIAL SETTLEMENT OF DIVORCE CASES

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The Tax Cuts and Jobs Act of 2017 (TCJA) enacted dramatic changes to several tax issues that directly impact how divorces are settled. If you are a high wage earner, or you’re married to one and you’re contemplating getting a divorce, there’s almost a sense of urgency toward you understanding the financial aspects of your divorce and when to file your marital settlement agreement, should you and your spouse reach one.

Heather L. Locus, an owner and wealth manager at Balasa Dinverno Foltz LLC in Chicago, defines on her Website why this could be important to you. “Many high-net-worth couples may want to move quickly in order to preserve some important financial options,” Locus writes. “Couples who finalize their divorce agreements this year have many more options since the most significant rules impacting divorce go into effect on New Year’s Day 2019.”

In a previous blog we dissected how the Tax Cuts and Jobs Act of 2017 dramatically affects spousal support payments. After January 1st, 2019, all payments between former spouses in executed divorce agreements will be treated in much the same way as shared income was during their marriage. In other words, spousal support and unallocated support payments of any kind will no longer be tax deductible by the payor spouse nor will they be taxable to the recipient spouse. It is similar to how child support payments have always been dealt with in family law. No deductions permitted.

An article written for familylawyermagazine.com entitled, New Tax Law Helps & Hurts High-Net-Worth Divorce Cases, Locus, CPA, CFP, CDFA, reminds us that there are other changes to the new tax laws and how they will impact the way divorces are settled, and they should be kept in mind when negotiating a divorce settlement. They are:

  • The Personal Exemption. It was reduced to $0 for all taxpayers this year but may return to a $4,000 exemption in 2026 unless laws change again.
  • State and Local Taxes. Deductions for state income and property taxes above $10,000 combined are gone. However, this results in fewer taxpayers being subject to the AMT.
  • Moving Expenses. Unless one of the divorcing spouses is a member of the Armed Forces, expenses incurred separating one marital household into two are no longer deductible.
  • Legal and Professional Service Fees. Tax preparation, investment advisory fees, and your legal fees incurred for tax planning and to obtain taxable alimony are also gone. Some other changes — such as the raising of estate values subject to inheritance taxes — may indirectly impact high-net worth divorce negotiations as the need for advance estate planning vehicles such as Life Insurance Trusts and Grantor Retained Annuity Trusts (GRATs) are reduced.

PERSONAL EXEMPTIONS HAVE BEEN ELIMINATED

As Locus stated above, the new tax laws eliminate personal exemptions for the tax years beginning after December 31, 2017, and ending December 31, 2025. During this eight-year period, divorcing parents will not be able to utilize the personal exemption for dependent children, which means there will be no more negotiating which parent will be eligible to take it.

Before this year, tax filers received a deduction from income for their personal exemptions, including themselves, their spouse, and their children. In divorce and separation agreements it was common for parents with children to negotiate who could use the personal exemption deduction for income and in which year, but not anymore.

CHILD TAX CREDIT INCREASES

Even with the changes in the tax laws divorcing parents will still be able to negotiate which parent will be allowed to claim the “Child Tax Credit”, and which parent will not. Similar to negotiating for personal exemptions, someone involved in a divorce would want to negotiate which spouse gets to claim the “Child Tax Credit”. An income deduction merely reduces taxable income. A “Child Tax Credit” provides a dollar-for-dollar reduction of tax owed. It is an important negotiating tool, and the TCJA doubles the “Child Tax Credit” from $1,000 to $2,000 for children under the age of 17.

Possibly of more importance, $1,400 of the $2,000 credit is refundable to the filing spouse, whereas in prior years the “Child Tax Credit” was not refundable. The “Child Tax Credit” might now be more useful than ever in divorce settlement negotiations because it immediately reduces taxes owed and it is partially refundable.

FAMILY RESIDENCE BECOMES MORE EXPENSIVE

The new limits on deductions imposed by the Tax Cuts and Jobs Act of 2017 will make the prospects of being able to afford to keep the family residence a more challenging proposition. If you took out a home mortgage to acquire your home after December 15, 2017, the TCJA now requires mortgage interest deduction to only be available for interest paid on up to $750,000 of debt on first and second homes combined. However, if your loans for first and second homes combined was created prior to December 15, 2017, you are grandfathered in. This means you have a $1 million limit for interest deductions.

The 2017 tax laws also affect how divorcing spouses will deduct their home mortgage interest payments. According to the IRS the new law suspends from 2018 until 2026 the deduction for interest paid on home equity loans and lines of credit, unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.

This means the deduction for home equity indebtedness has been repealed, unless the home equity indebtedness qualifies as “acquisition indebtedness” — ie. it was used to acquire, build, or improve a primary or secondary residence. As written, the repeal of the home equity interest deduction does not have a grandfather provision. This means all equity loan interest, regardless of when the loan was originated, will no longer be deductible if the proceeds of the equity line were not used to buy, build, or improve the primary or secondary residence.

THE WINDOW IS CLOSING

Due to the many changes in the tax laws suffused with much confusion that surrounds the new rules, your ability as a divorcing spouse to tailor your divorce agreements to suit your particular financial needs will disappear in 2019. That’s why you might want to seek guidance from a family law specialist now. Please be warned that many otherwise competent divorce lawyers are not up to speed on many of the new tax changes. So don’t assume that just any family law attorney is capable of guiding you to the best tax results in your divorce. Contact a specialist in family law who is up to date on the latest tax changes that might affect you.

 

 

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WILL GOD’S AGENDA STIFLE DIVORCE AND REMARRIAGE IN CALIFORNIA?

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Ah, us liberal Californians, you got to love us or leave us, but we’re going to look good either way. That’s because we work hard at it. It takes time and ambition to soak up sun like George Hamilton and remove lines in our faces like Jane Fonda. We like buttocks surgeries because they make us look like Ms. Bumbum and vegan diets because they make us look thin in our mirror’s reflection. Some of us spend lifetimes and fortunes never succeeding but always finding better ways to look even better in our quest to entice the other side.

California lifestyles say “rich” while we work endless hours to make the kind of money it takes to attract a like inclined individual from the opposite sex. This is how it was taught back in the 70s and it’s how it’s still being played out by many today. Once we set our magnet tentacles into this new person of interest, we can then work on what we’ve spent a lifetime being programmed into dreaming about — tying the proverbial knot with a White Knight and living happily ever after.

We see it happen all the time on the Disney Channel. It’s embedded into the romantic subplot of inane stories designed to program underdeveloped minds. Of course eventually, after we’ve grown up and had our own kids and family dissension has set in and everyone’s kind of gone off in different directions; when the lightening juice of love and lust of overrun hearts that got us together in the first place has simply dried up, stark reality can be very painful. That’s when we put the alcohol and pain medications down and get on our PC or mobile phone device and hire the best divorce lawyer our money can buy. We pay her handsomely to undue “it” at all cost. For many, divorce is by far the easiest segment of the cost of doing life here on the Gold Coast.

HAVE THE WINDS OF DIVORCE SHIFTED IN CALIFORNIA?

The skies have changed in California and it has nothing to do with the smell of sun tan lotion and chemtrails. There was a Red Tsunami of Evangelical Christian proportion that has swept through our state along with the 2018 Midterms, overturning tiny little blue umbrellas and flooding castles made of champagne sand. Liberals have been diagnosed with spinning heads and PTSD. With this overtaking of Biblical proportion comes an attempted reform of values centered around Christian Doctrine, of which many Californians generally aren’t really that familiar.

Thus it seems like a good idea for all married Californians – or non married Californians who are thinking about getting married – and all divorce attorneys to understand the divorce game is undoubtedly about to change forever. No matter how we look at it Jesus and Church inspired voters are back in town and there’s no reason to believe they’ll be leaving anytime soon. Thus they promise to spread tremendous influence affecting all aspects of our lives.

THE EVANGELICALS HAVE SET UP SHOP

The New York Times talked about how the Evangelicals have set up shop in and are fighting to retake California. That’s a fact. They say they’re tired of being stepped on and they’re aiming straight for our hearts.

Try to imagine Jesus espousing conservative political undertones, while bringing back his messages to a state with vast evangelical pockets of population. This equated to many Christians recently running for city council seats, mayorships, and every level of government to help effect change in California. Change is happening whether we voted for it or not.

The mission is pretty simple. It’s about faith and Jesus with a parallel message of conservative cause. The conservative approach opposes hot button issues like same sex marriage and abortion. It supports conversion therapy which is intended to change a person’s sexual orientation or gender identity. In 2012, California passed a law restricting the practice on minors.

How does that bode for other conservative values supported by the Evangelical Christians, and the Catholic Church, that intersect with contradicting liberal values practiced by many longtime Californians? We know those who support abortion and same-sex marriage are willing to march into the streets and protest in support of their beliefs. We also know what Jesus and the Church have always taught about divorce and remarriage, and that makes for great conflict for many who like to divorce and remarry quickly in California.

The teachings expressed by Jesus, the Church, and Evangelical Christians similarly offend many core liberals. Jesus is about sanctity of matrimony. Many Californians are about looking tanned, making money, divorcing and moving on to new relationships, and not necessarily in that order. Something is going to have to give eventually here and no matter what it is we are going to witness change, on many levels, marriage and divorce being a major one.

JESUS, THE CHURCH, DIVORCE AND REMARRIAGE

It is taught that Jesus elevated the act of matrimony to the status of a sacrament. This means a valid marriage between two baptized people is considered a sacramental marriage that cannot be dissolved, writes Fr. Richard Heilman at romancatholicman.com. Divorce is out of the question if you belong to the Catholic Church.

In an article entitled, What Jesus And The Church Have Always Taught About Divorce & Remarriage, Fr. Heilman writes that if “anyone so married attempts to divorce and remarry, he enters a state of perpetual adultery which is a mortal sin.” This of course can lead to many family problems for Catholics. But how many mortal sinners would those rules make out of us ordinary citizens who live and marry in California? Do we really have to be a church member to be a mortal sinner? Could these rules some day apply beyond the Church into everyday life? And does the rule apply equally to men and women?

Jesus appears to speak on behalf of men when he said: “Everyone who divorces his wife and marries another commits adultery, and he who marries a woman divorced from her husband commits adultery” (Luke 16:18, cf. Mark 10:11-12). That’s a lot of adultery for men to watch out for, transgenders need not apply. This is about a “man” and “woman” who have commingled their lives through holy sacrament. Through the Church’s eyes they are bound for life.

According to God’s law once we make the sacrament of marriage we are bound to it for the life of either party. Paul seems to have spoken for women on the issue when he said: “Thus a married woman is bound by law to her husband as long as he lives … Accordingly, she will be called an adulteress if she lives with another man while her husband is alive” (Rom. 7:2-3).

“Adulteress” is a situation for the Church to be handled from within the institutional framework. It has been through the turn of many centuries and cultures. This does not apply to California divorce courts or “man’s” laws. Fr. Heilman notes that these strictures only apply to sacramental marriages – those between baptized people. For marriages involving an unbaptized party, a different rule applies (1 Cor. 7:12-15).

Although various cultures have allowed for divorce legally Jesus and the Church have always been consistent with their message. The Greco-Roman culture, for instance, allowed for easy divorce and remarriage although Church Fathers proclaimed Christ’s teaching on the indissolubility of marriage. This is the same thing the Catholic Church has done today in our over-the-counter divorce culture (cf. Catechism of the Catholic Church 1614-1615), Fr. Heilman writes. Many churches have modified their teachings to accommodate the pro-divorce ethos that dominates modern culture, but the Catholic Church remains consistent in teaching what Jesus taught.

Under marriage today a baptized couple can “remarry” after divorce only if the Church finds that a valid sacramental marriage never existed in the first place (a decree of nullity; see CCC 1629), Fr. Heilman writes. The “remarriage” is actually their first marriage. If, however, the parties were genuinely and sacramentally married, they may in some cases live apart and even obtain a legal separation, but they are not free to remarry (CCC 1649). A divorce is simply out of the question.

AN ACT OF GOD

This is “not a command of men”, but one that “comes directly from Jesus Christ”, Father Heilman writes. As Paul said: “To the married I give charge, not I but the Lord, that the wife should not separate from her husband (but if she does, let her remain single or else be reconciled to her husband) – and that the husband should not divorce his wife” (1 Cor. 7:10-15). This is an important issue that many Californians will be looking at under an entirely different light than they have in the past. Times have changed. “American culture” is transforming back to American culture. After all, we were once a nation created under God.

Divorce will never again be looked at with the same liberal attitude we in America have displayed since the 1960s “cultural revolution”. Things have changed since then and that continued transformation just might begin to accelerate for the good of us all.

 

 

DOES THE U.S. HAVE ENOUGH GOLD TO BACK THE NEW U.S. DOLLAR?

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The U.S. dollar as we know it is about to be replaced by a new currency. We don’t know when. It could be this year, or maybe next year, we don’t know. The question is not if? the Federal Reserve Note (U.S. Dollar) will be replaced but when? When it does, it’s going to have to be gold backed with value. Real assets like gold will have to back the new U.S. dollar at least in part for America, and Americans, to get back onto the global financial carousel with economic independence and the ability to coexist with foreign currencies that are backed by gold.

The important question to us as Americans with family members to provide for and a desire to see our spending power grow is how much if any gold does the U.S. actually possess? A legacy of secrecy still surrounds how much gold America has, author James Ledbetter, editor of “Inc. magazine” and the author of “One Nation Under Gold: How One Precious Metal Has Dominated the American Imagination for Four Centuries”, writes for the Los Angeles Times. “Some of the conservative and libertarian figures who demand that the Federal Reserve be audited, for example, grumble that there may be a lot less gold — maybe none! — in Fort Knox than official numbers allow,” Ledbetter writes.

Others believe U.S. central bank vaults possess more gold than America’s been letting on to. On August 21, 2017, Bloomberg reported that U.S. Treasury Secretary Steve Mnuchin had paid a rare official visit to Fort Knox to in fact confirm the nation’s gold stash.

Is our financial inventory in tact? U.S. Treasury Secretary says it is, sort of.

“I assume the gold is still there,” Mnuchin, a former Hollywood producer, recently told an audience 40 miles north of the U.S. Bullion Depository. After the visit, the Secretary of the U.S. Treasury playfully reassured America that the treasure was still secure. But is it? What if Mnuchin is wrong? Or lying? And what if the U.S. really doesn’t have enough physical gold to back the greenback?

DO WE REALLY HAVE ANY GOLD?

Our President appears to believe in a gold standard but he has expressed doubts as to America’s status as a present legal custodian of the precious metal. “We used to have a very, very solid country because it was based on a gold standard,” Ralph Benko of Forbes cites President Trump in March 2016 as telling WMUR television station in New Hampshire, “but it would be tough to bring it back because we don’t have the gold. Other places have the gold.”

Other places have the gold and America does not? Could that be true?

As if doubling down on our president’s position regarding America’s gold possessions Benko cites Trump as telling GQ: “Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We’d have a standard on which to base our money.”

Which makes it all seem obvious that there’s no way the U.S. actually has the gold to back a new currency, right? Wrong, Ralph Benko writes, objecting strongly to the President’s position saying Trump has been misled to believe that “we don’t have the gold. Other places have the gold.” The United States, Germany, and the IMF have about as much gold as the rest of the world combined, Benko informs us, with America having well more than Germany and the IMF combined.

America claims to hold 8,133.5 tons of physical gold in its official reserves. Fifty-eight percent is reportedly held in Fort Knox, Kentucky, 20 percent at West Point in New York, 16 percent is said to be at the U.S. Mint in Denver, Colorado, and five percent is held at the New York Fed, an RT article says.

Singapore’s BullionStar precious metals expert Ronan Manly is quoted as telling RT that America’s actual gold reserves are likely much smaller.

“The entire story around the U.S. gold reserves is opaque and secretive. There has never been a full independent audit of the U.S. gold reserves, and the custodians of the gold, the U.S. Mint and the Federal Reserve of New York will not let anybody into the vaults to view the gold or to count it,” Manly told RT.

Besides, even if there were gold in American vaults there’s a very serious question as to the purity of the precious metal.

“Even the details that have been provided on the supposed U.S. gold holdings show that a majority of the gold bars are low purity and in weights that don’t conform to the industry standard ‘Good Delivery’ gold bar specifications,” Manly is quoted as telling RT.

This would make the gold un-tradable on the international market because of its low quality. There have been rumors that in the past the U.S. government has attempted to pay off debts with China using tungsten bars painted gold. China was reportedly deeply unimpressed with this payment method and returned the tainted bars back to the U.S.

WHERE WILL AMERICA GET GOLD TO BACK ITS NEW CURRENCY?

Like they say, if you’ve got it, show it. There’s a major question as to whether America actually does have the gold to back a new U.S. currency. If we don’t, where are we going to get it and how much will it cost?

President Trump has already told us that we don’t got it and someone else does. We know Russia has been buying up gold like there’s no tomorrow. China’s Royal Families and Elders are said to possess tremendous amounts of “unofficial” gold and other precious treasures from the ancient past. If we don’t have it in the U.S., would we get our gold from Asian countries in spite of the trade wars, billions of dollars in tariffs, South China Sea military standoff, and North Korea?

Or would we get our gold from Russia whom we’ve been targeting with the nuclear war drum roll for decades? Would Russian President Putin just forgive the United States for bringing the Communist Curtain down upon all Russian people in 1991, the destruction of the ruble, and the deaths of more than a million Russian people whose lives depended upon it, and just give the U.S. another 70 million metric tons of gold as the Russian Tsar reportedly did back in 1913 to help gold back the Federal Reserve Bank and the U.S. dollar?

There are rumors, myths, and stories that there are other greater hoards of golden wealth stashed out there in other countries belonging to someone that has yet to be legally established in the public eye. Might they lend a few million ounces of precious metals to Uncle Sam to help us in a time of need? Or not?

The rest of the world is turning to a gold standard. Our president and members of congress think gold backing of the U.S. currency would be a good idea. The Federal Reserve Bank and the Federal Reserve Note are breaking. The U.S. dollar and all markets tied to it are exploding into thin air on a global scale. Who’s going to give America its gold and save us? Who’s going to give our families a break?

Singapore’s BullionStar precious metals expert Ronan Manly is quoted as telling RT that America’s actual gold reserves are likely much smaller.

“The entire story around the U.S. gold reserves is opaque and secretive. There has never been a full independent audit of the U.S. gold reserves, and the custodians of the gold, the U.S. Mint and the Federal Reserve of New York will not let anybody into the vaults to view the gold or to count it,” Manly told RT.

Besides, even if there were gold in American vaults there’s a very serious question as to the purity of the precious metal.

“Even the details that have been provided on the supposed U.S. gold holdings show that a majority of the gold bars are low purity and in weights that don’t conform to the industry standard ‘Good Delivery’ gold bar specifications,” Manly is quoted as telling RT.

This would make the gold un-tradable on the international market because of its low quality. There have been rumors that in the past the U.S. government has attempted to pay off debts with China using tungsten bars painted gold. China was reportedly deeply unimpressed with this payment method and returned the tainted bars back to the U.S.

WHERE WILL AMERICA GET GOLD TO BACK ITS NEW CURRENCY?

Like they say, if you’ve got it, show it. There’s a major question as to whether America actually does have the gold to back a new U.S. currency. If we don’t, where are we going to get it and how much will it cost?

President Trump has already told us that we don’t got it and someone else does. We know Russia has been buying up gold like there’s no tomorrow. China’s Royal Families and Elders are said to possess tremendous amounts of “unofficial” gold and other precious treasures from the ancient past. If we don’t have it in the U.S., would we get our gold from Asian countries in spite of the trade wars, billions of dollars in tariffs, South China Sea military standoff, and North Korea?

Or would we get our gold from Russia whom we’ve been targeting with the nuclear war drum roll for decades? Would Russian President Putin just forgive the United States for bringing the Communist Curtain down upon all Russian people in 1991, the destruction of the ruble, and the deaths of more than a million Russian people whose lives depended upon it, and just give the U.S. another 70 million metric tons of gold as the Russian Tsar reportedly did back in 1913 to help gold back the Federal Reserve Bank and the U.S. dollar?

There are rumors, myths, and stories that there are other greater hoards of golden wealth stashed out there in other countries belonging to someone that has yet to be legally established in the public eye. Might they lend a few million ounces of precious metals to Uncle Sam to help us in a time of need? Or not?

The rest of the world is turning to a gold standard. Our president and members of congress think gold backing of the U.S. currency would be a good idea. The Federal Reserve Bank and the Federal Reserve Note are breaking. The U.S. dollar and all markets tied to it are exploding into thin air on a global scale. Who’s going to give America its gold and save us? Who’s going to give our families a break?

 

 

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WHAT HAPPENED TO HR 5404 – AND THE GOLD BACKING OF AMERICA’S NEW CURRENCY?

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It’s tough being a kid growing up in these times of civil war and deprivation where censorship runs rampant and the many layers of falsehood are often confused for truth. We’ve seen up close the horrors of pain and desperation etched onto the faces of hungry American children and frail elders alike. Our food and water is poisoned, geoengineering is making us ill and destroying the environment in which we live, and fires endlessly burn us out of our homes, jobs, and air. The economy has turned many of us into financial slaves and we can feel the devastation of loved ones falling apart right before our helpless eyes.

Our children are our futures yet they suffer from the darkness of a financial insecurity of which they are yet unaware. Many families don’t have enough money to make ends meet on a monthly basis which means they don’t have the financial wherewithal to keep their families together, to fill their children’s bellies with nutritionally balanced meals, or to clothe them properly from head to toe. Choices with profound implications have to be made under every roof every day. Irreversible sacrifices are being taken. Bills are not getting paid, medicines or food or both are not being bought, and almost all of this has to do with scarcity in the name of the American Dollar.

WHAT HAPPENED TO HR 5404?

One of our biggest problems is that the U.S. dollar has basically become worthless, rendering our purchasing power of goods and services in the marketplace to near nothingness. We’ve been fleeced through the last hundred or so years by the United States Federal Reserve, fiat currencies, and the Western Central Banking System. They who run finances have scraped 97% of the wealth out of the U.S. dollar which has benefited their well beings while we the average American family are left with the last three cents on the dollar which is backed by nothing but growing U.S. debt. Which is now more than $21 trillion dollars and that’s not counting the $21 trillion that has been proven missing from the HUD and the DOD. That’s at least $42 trillion right there that our children and their children and their grandchildren will never be able to account for.

Which all the more proves why it is significant that a Congressman from West Virginia has proposed a bill called HR 5404 to gold back the U.S. dollar. According to thedailycoin.org Republican Congressman Alex Mooney has proposed a bill that will “define the dollar as a fixed weight of gold.” Mooney wrote an op ed about it in the “Wall Street Journal”.

That’s right. It has been introduced into congress that America should return to a gold standard. This idea is not new though. Even President Trump told us back in 2017 that he would like to see America return to a gold standard. In a Forbes.com article entitled, “President Trump: Replace The Dollar With Gold As The Global Currency To Make America Great Again”, Ralph Benko writes that bringing back the gold standard would not be very hard to do with a president like Trump.

“Donald Trump shows a strong affinity for gold,” Benko writes. “He has also shown a keen intuitive grasp of how the gold standard was crucial to having made America great.”

So what this means is that our government is soon going to gold back the U.S. currency, right? That’s how it was supposed to be in the very beginning, before the Federal Reserve took over our country’s finances in 1913, right?

In proposing H.R. 5404 the U.S. Congressman from West Virginia criticizes U.S. monetary policy, citing the fall in the dollar’s purchasing power after the gold standard was abolished.

“The United States dollar has lost 30 percent of its purchasing power since 2000, and 96 percent of its purchasing power since the end of the gold standard in 1913,” the bill says.

The congressman goes on to describe the advantages of having a gold-backed dollar.

“The gold standard puts control of the money supply with the market instead of the Federal Reserve. The gold standard means legal tender defined by and convertible into a certain quantity of gold. Under the gold standard through 1913, the United States economy grew at an annual average of four percent, one-third larger than the growth rate since then and twice the level since 2000,” Mooney says.

This would be good for us but nobody even knows about it. Did you? Nobody owns gold, instead everybody trading in dollars that are debt backed, which is what the U.S. dollar is and what America runs on. That’s all any of us own with our present financial system, which is being run into the ground.

Congressman Mooney says that under the Federal Reserve’s 2 percent inflation objective, “the dollar loses half of its purchasing power every generation, or 35 years.” Think about that for a long moment. We own debt that backs our assets and that’s what we bought our houses with. Our families’ homes and our cars were bought with U.S. dollars backed by debt that loses half it’s value every generation.

So what does that really say about everyone’s pensions or real estate that is tied into the U.S. dollar? Is that why we’re struggling so badly to keep our families living in some semblance of the lifestyle we have become accustomed to after we divorce? Is there any such thing as the “American Dream” anymore? If so, should we consider whether this new legislation, H.R. 5404, should become law? Because our old system of monetary value has lost its “value”?

Like Congressman Mooney says, “American families need long-term price stability to meet their household spending needs, save money, and plan for retirement.”   These are the types of important issues we advise clients about to help them and their families stay ahead of the financial game and move forward in their lives. Meet spending needs, save value, and invest for ultimate retirement.

HOW MUCH GOLD DO WE AMERICANS OWN?

In an interview with the World Gold Council’s Gold Investor former Chairman of the Federal Reserve Alan Greenspan stated, “I view gold as the primary global currency.”

President Trump agrees. It’s been 34 years since U.S. lawmakers even tried to change the way America’s currency is backed, when Congressman Jack Kemp introduced the Gold Standard Act of 1984, which was cosponsored by seven others including Newt Gingrich and Connie Mack. It didn’t pass. 34 years later we have HR 5404.

Will it succeed? It has to if we as a country are going to succeed. Some believe we’ve made positive strides toward making gold backing of our currency a reality. “I think we are building a foundation of expertise — expertise that we didn’t have in 1980,” writes Nathan Lewis in Forbes in an article called, After 34 Years, We Again Have A Bill To Relink The Dollar To Gold“. “That will allow us to restore the united long tradition of gold-based money, when the political time is right.”

The question remains: when will the political time be right? And when it is right, who will be there to tell us how much gold, if any, the U.S. really owns to back the dollar?

TIL DIVORCE DO US PART: AMERICANS BORROW RECORD $3.5 BILLION FOR WEDDINGS IN 2017

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Alright the stats are in, and they’re mind-boggling. American adults never cease to amaze me in this kind of stuff. Here, more than one million borrowed money last year to pull off their dream wedding. The average amount borrowed to cover the costs was $3,082. To put this into greater perspective, out of 126 million American adults, last year more than one million (1.13 million to be exact) got married. And they borrowed a lot of debt to do it.

U.S. couples borrowed $3.48 billion for weddings in 2017. Most of the couples turned to credit cards or personal loans to finance their nuptials, an article on Finder.com says. Additionally, one in five (21.4%) U.S. adults borrowed cash from family and friends over the past year in order to see their wedding dreams fulfilled.

DON’T BORROW MONEY TO GET DIVORCED

Why bother? is what I ask. Family and friends are cash strapped as well. You don’t need to create the personal stress on a good relationship. Odds are you’re going to end up coming to see us for a divorce sooner or later anyway, so save your friends, your family, and your money for a rainy day. Invest in gold coins. Don’t go into debt over something unless there’s a greater return and a positive cash flow.

I’ve been telling clients for years that all marriages end up in either divorce or death, so what was your rush in this down-turning economy? “Fifty percent of those who get married end up in divorce,” I would say.

Well, I was told I was wrong on that one. I did the research, and okay, maybe I was a off by a few percentage points. It appears the divorce rate may actually be on the decline, but there could be many factors attributable to that like maybe the fact that the marriage rate is declining as well. However, considering all factors, I believe what Bella DePaulo, Ph.D., author, and expert on single people, says regarding the chances that a marriage will end in divorce. According to DePaulo, the divorce expectation rate for those of us who are presently married is probably somewhere between 42 and 45 percent.

In PsychologyToday.com DePaulo cites a 2014 New York Times article reviewing the national divorce rate. “It is no longer true that the divorce rate is rising, or that half of all marriages end in divorce,” Claire Cain Miller wrote in that article. “It has not been for some time.”

BUT AGAIN, WHY BORROW AT A 55% TO 58% CHANCE OF SUCCESS?

Might as well just flip a coin then. Will we stay married … or won’t we? Heads you win, tails I lose. Do the math. Is it worth getting yourself in deeper debt to contractually bind you to a legal relationship that will end at some point anyway? Death or divorce, choose your weapon.

Right now the financial experts are telling us that the financial system is reaching crisis proportion. We’re being told to save as best as we can and to invest in real assets. We’re being told that the U.S. dollar as a paper currency is going to disappear; that we’re turning into a digital currency society. Experts predict, and financial trends indicate, we’re going to experience a severe credit freeze with banks. On top of all that, some of us are thinking of borrowing money to get married? Are we crazy? Are we American?

Good luck.

For those who must do it now, before it’s too late, there are sympathetic ears and advice. Blair Donovan writes for brides.com, giving some ideas about borrowing money for your wedding.

“First, assess the average loan period you are capable of in order to repay your debt on time,” Donovan writes. “Next, evaluate what the most reasonable interest rate might be. A higher interest rate may seem less daunting if your payoff period is short, as in the case of payday loans. However, if you need several months or years to pay back what you owe then a lesser interest rate may be the most sensible option to cover your wedding day expenses.” Or….

You can get married without borrowing. Have the wedding in a national forest with three witnesses, a minister, and a portable hot tub. Much less expensive without the bar tab and no room for in-laws in the tub. Or …

Forget about getting married, save the money, invest it wisely in undervalued assets, and just be friends. Dutch Treat worked great in the 90s, and it’d work just fine for the two of you heading into the Roaring 20s.

 

MARRIED WOMEN SHOULD UNDERSTAND THEIR FAMILY FINANCES BEFORE DEATH OR DIVORCE PART THEM FROM THEIR MONEY

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I recently read a timely article at bloomberg.com, talking about the difficulties many post divorce women face financially, due to them not having participated in the handling of family finances while they were married.  Back then, their spouses handled the finances, who turned out to be better equipped in dealing with family related financial issues after the divorce was completed. Now, as newly single women, many wives who had left the money matters to the men, wish they hadn’t.

In Rise of ‘Gray’ Divorce Forces Financial Reckoning After 50, Suzanne Woolley writes of how “too many women” let their husbands make the long-term financial decisions, which has left them vulnerable when separation or death strikes.  That’s why it’s so important for any woman, married or not, young or old, to take the time to learn about the finances that affect them and their families, before death or divorce throw ungodly financial surprises upon you.  This is a regular instance with many family law clients. Many women, looking deer-lost in headlights, not having really any clear idea of the true nature of their family finances, seek legal advice related to family financial matters.  Surprise and shock are common responses when discussing the issues surrounding the division of community property. Issues related to income, expenses, assets, and debts might be clouded, personal property and community property commingled, or assets going unaccounted for.

By developing understanding of your financial affairs you will be better prepared to make the big financial decisions that you might have let your spouses make when you were still married.  Understanding family finances better helps to avoid the “nasty surprises” at the end, that your divorce lawyer will have to help you clean up.

Woolley notes some interesting facts relating to women and their investing, citing statistics from a survey found in a report called, “Own Your Worth,” which was released by UBS Global Wealth Management.

  • 56 percent of married women still leave major investing and financial planning decisions to their spouse.  
  • 61 percent of millennial women said they leave investment decisions to their husbands.
  • 54 percent of baby boomer women leave investment decisions to their husbands.
  • Twice as many men as women in the UBS survey said they were highly knowledgeable about investing.
  • Three-quarters of the women surveyed said they don’t know much about investing.

Woolley’s article also cites a stark difference between married women and women who were divorced or widowed regarding the “making (of) major financial decisions” during their marriage  She cites, for example, that:

  • 59 percent of widows and divorcees regret not taking part in long-term financial planning when they were a couple.
  • 85 percent of married women who weren’t active in making long-term financial decisions said their spouse knows more about financial issues than they do.
  • Eighty percent of women said they were content with how financial responsibilities were handled in their marriage.

The report concluded that a majority of married women are still handing over to their spouses important financial decisions that will profoundly affect their futures.  Women and divorcees who now find themselves alone wish they had been more involved in finances while they were married, says the UBS Global Wealth Management Report. Nearly all of them advise other women to get more involved early on and “break the cycle of financial abdication.”

WOMEN SHOULD BREAK THE CYCLE OF FINANCIAL ABDICATION

The UBS report cites “eight out of 10” divorced or widowed women who remarried as finding themselves to be “more active in the financial decision-making in their current relationship.”  Ninety-four percent of widows and divorcees surveyed insist on complete financial transparency with their spouse.

Again, for all women who are trying to make it work financially, you have one financial bottom line, and that is if you haven’t already — get involved now!  Wake up to the economic realities we all face right now in trying to move our families forward in a healthy and prosperous way. When the divorce comes about, you will be prepared in important aspects.  Remember that subsequent marriages have a higher rate of dissolving than do first marriages. So understand the income, expenses, assets and debts formula your family operates under now.

If you are a married woman, be involved with your husband when making all financial decisions.  You’re signature and / or consent is going to be required for most family related financial instruments, so you might as well understand what you are signing, and why.  If a divorcing woman understands her finances, and she can communicate rationally and intelligently with her spouse, come time for the divorce, she can conceivably steer the mediation of the division of the community property and in the long run save her and her family a lot of money and emotional expense.  If she needs an attorney or divorce mediator to help her with the process, she can always hire a family law specialist.

PROPERTY DIVISION IN DIVORCE IS ABOUT ASSET PRESERVATION

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One of the primary issues a family law specialist deals with in divorce is helping his or her clients resolve their financial issues.  An experienced family law attorney can help you not only divide your property and assets, but your debt and liabilities as well.  A divorce attorney will utilize the best methods to put your entire family in the best financial position possible as you move forward into unfamiliar post-divorce territory.

Sometimes the community possesses complicated financial assets, like investment and retirement accounts or stock options, and a forensic accountant might be brought in to help analyze, value, and divide your property.  A forensic accountant can help unravel the essential financial formulas that might affect not only the division of community assets, but also child support and spousal support.  Forensic accountants can be expensive, however, and they’re not right for all divorces.  In a divorce case, a little common sense can go a long way when it comes to dividing community property.  The key is to think about how you’re going to preserve what you have in this dramatically volatile economic environment we live in.

My belief is that we are in the middle of the greatest economic free fall that we’ve ever experienced in this country during my lifetime.  The United States Congress says that the U.S. dollar has lost 96% percent of its value since its inception in 1913.  Some economists say that we are in the middle of witnessing 90% percent of the global wealth changing hands of ownership.  Whose hands are your wealth going into?  Will you and your family have anything left?

The purchasing power of the U.S. dollar, which is what we live and eat on, is down to an all time low, so low, in fact, that the U.S. Congress is contemplating bringing back the gold standard to back it.  At this time, more than ever, income, expenses, assets, debts, savings, and investments, should all be at the forefront of the minds of family law attorneys helping you divide your community assets in a divorce.  If you as a divorcing spouse aren’t considering your personal state of financial affairs, as it relates to your family’s future financial reality, and the value of the assets that you can take with you in your split, you could be in for some major surprises and disappointment.

TRUE INVESTMENT CAPITAL ONLY COMES FROM SAVINGS

Unemployment in this country is at an all time high.  Even if you have a job, inflation affecting everything you buy probably keeps you from being able to actually save money.  One of the greatest issues for family law attorneys in dealing with divorce is financial disagreement between the spouses, which is compounded by the fact spouses just aren’t saving enough in real value, so they end up fighting each other tooth-and-nail to squeeze every ounce of wealth they can out of whatever community asset they have left.  So be it for inflated assets.  Sets of silverware are being split down the middle because divorcing spouses have not been saving.  They’ve barely considered the true valuation of their assets up to this point in their lives.

Savings are important because they form the cash cushion that gets us through difficult economic times.  We get the best value out of our assets by saving for them first.  A lack of savings is one of the major problems we face not only as individuals but as a country during these economically challenging times.  Economic researcher Chris Martenson, PhD, MBA, says that savings are important nationally because they are utilized for the formation of investment capital; that is, the property, plant and equipment that create actual future wealth.

Same thing applies to spouses in a marriage.  If you are going to want to be able to invest in the “property, plant and equipment” of your future, so you  have some future wealth to be able to preserve for your family, without having a giant debt load attached to it, you’re going to have to save for it first.  True investment capital can only come from savings.

INDIVIDUAL’S SAVINGS RATES AT ALL TIME LOW

According to Martenson, savings rates have plunged to historic lows, “levels last associated with the Great Depression.”  Martenson says the personal American savings rate has steadily declined in America since 1985 to the present.  The decline we have experienced as a country and as individuals has resulted from “a culmination of a multi-decade erosion of savings as a cultural attribute of American citizens,” Martenson says.  Now, many of you are realizing this in your own lives, where you’re having problems making ends meet on a week-to-week basis, with nary the time nor thought given toward investing in yours or your children’s futures.  The truth is, you can barely deal with financing the now.  And you’ve probably got a lot of debt to go with it.

Martenson, a futurist and co-founder at PeakProsperity.com, believes that what a history of persistently declining savings tells us is that there is an “implicit assumption” by the majority of people in this country that unlimited credit will be available in the future, and so we don’t need to save now.  We have assumed a lifestyle where we have largely substituted a “save and spend” mentality, with “a buy it now on credit” mentality.

All debt across all sectors in this country, and personal savings of individuals, shifted in opposite directions in 1985, with the gap widening dramatically ever since.  “Our national tolerance of debt shifted drastically upwards beginning in 1985 right as our national approach to savings was beginning its long decline towards zero,” Martenson says.

The marketing of our financial system has created in us a belief that in order to have a grander and brighter future, we are going to need more money, which equates to greater debt, so we can buy things.  We have become a country of mass consumers fueled by credit availability.  Everything is about beating the Joneses, now, the future be damned, and the Joneses have a lot of credit at their disposal.  The idea has been ingrained in us that low savings plus high debt equals prosperity, or what Chris Martenson calls, “at least a perpetual feature of our future economic landscape.”

THE BOTTOM LINE FOR DIVORCING COUPLES

The bottom line for most Americans has become that of low savings rate and high debt, which is a major problem because it means that most divorcing spouses have a very thin safety cushion to ride out the economic hardship we are experiencing at this time.  This equates to the fact that most people have failed to invest in their families’ futures.  Dealing with the present while preparing for the future has posed a difficult task for most Americans, and, as a result, divorcing spouses have little left to divide.  They’re not alone in this.  A lack of savings is a nationwide problem.

Our bottom financial line to get through these difficult times has to be pretty straight forward from here.  Save as much as possible, now, and get out of debt.  Many financial forecasters predict that a credit freeze is imminent.  Prepare for it.  Know the truth of what’s really going on in the world, and with our banks.  When possible, move those hard-earned savings into assets that will hold or increase in value during this time of the declining U.S. dollar.  The theory behind hard earned savings, and the investment thereof, should include a ‘smart plan’ on how to preserve those assets for future family needs.

 

 

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