Professional Documents
Culture Documents
DIVORCE
EVERYTHING YOU NEED TO KNOW BUT WERE AFRAID TO ASK
AVVO.COM PRESENTS
DIVORCE
EVERYTHING YOU NEED TO KNOW BUT WERE AFRAID TO ASK
Avvo, Inc.
1501 4 Avenue Suite 1900 Seattle, WA 98101 Phone 206.734.1111 Fax 206.340.6040
th
Table of Contents
OVERVIEW ..................................................................... 6
THE TOP FIVE SIGNS YOUR MARRIAGE IS IN TROUBLE .......................... 7
BASICS ........................................................................... 9
NO-FAULT DIVORCE ................................................................................. 10 UNCONTESTED DIVORCE VS. CONTESTED DIVORCE ............................ 12 SIMPLE DIVORCE / SUMMARY DIVORCE BASICS ................................... 14 COLLABORATIVE DIVORCE ...................................................................... 16 DIVORCE MEDIATION............................................................................... 18
COSTS .......................................................................... 38
HOW MUCH WILL MY DIVORCE COST & HOW DO I SAVE MONEY ON IT? 39 FIVE TIPS THAT WILL HELP SAVE MONEY ON YOUR DIVORCE ............. 43 HOW TO PREPARE YOUR FINANCES IN THE TIME OF DIVORCE ........... 47 DIVORCE AND TAXES ................................................................................ 52
ALIMONY (SPOUSAL SUPPORT) MODIFICATION ................................ 107 ALIMONY (SPOUSAL SUPPORT) TERMINATION .................................. 109
Overview
Whether you're just starting the divorce process or you're in the midst of a custody battle with your ex-spouse, we have you covered. Here you'll find everything you need to know about divorce, property division, alimony, and choosing a divorce lawyer.
1. You Dream of a Life Without Your Spouse It is not uncommon for us all to wonder what if during our day-to-day lives, but when you start thinking about how your life would be better without your spouse, youve definitely got a sign that your marriage is in trouble. 2. You Keep Things to Yourself Im surprised at how often clients come in and tell me that they simply quit communicating their needs and concerns to their spouse. When your marriage has reached a point to where it's not worth it to bother your spouse with your concerns and needs, this is another sign the marriage is in trouble. Open communication is a key to any successful relationship, and holding things back from your spouse is quite unhealthy to the marriage. 3. You're the Only One Working on the Marriage If you feel that your spouse is not putting the same amount of effort into the marriage, then feelings of resentment and anger can really kick in. Anger sometimes fuels people to make rash decisions;
however, feeling a lack of reciprocal effort is a definite sign the marriage is on rocky grounds. 4. Your Marriage Lacks Intimacy Sex is an important part of any healthy marriage. If one spouse seems uninterested in sexual intimacy with the other, this is a sign the marriage is in trouble. Even more so, if one spouse is withholding sex as a form of revenge, then this too indicates a storm is brewing. 5. The Bad Outweighs the Good This one ties in closely with all the other signs. If you feel there is more trouble in paradise, then there are some issues that need to be confronted.
Basics
The kind of divorce you want and how well you and your spouse can agree on issues will affect the choice to hire an attorney, and what type of services you need from them. Learn more about the different types of divorce and determine which one is right for your circumstances.
No-Fault Divorce
No-fault divorce is the most common type of divorce case, and is available in all states except New York. A no-fault divorce is one where the spouse seeking a divorce doesn't have to prove the other spouse did something wrong, but instead gives a reason recognized by their state, such as irreconcilable differences.
10
11
12
Uncontested divorces
In an uncontested divorce, the spouses reach mutual agreement on relevant issues like alimony, child custody, child support, and asset division. The court doesnt get involved because the two parties manage to settle all their issues without litigation. Because of this, uncontested divorces usually save significant time and money compared to contested divorces.
Contested divorces
By contrast, two spouses go through a contested divorce process when theyre unable to reach an agreement on issues even after trying alternatives like mediation. When this happens, the divorce case then goes before the court where the judge (or jury) makes the final call on each issue. Whereas having an attorney isnt always necessary for an uncontested divorce, getting an attorney for a contested divorce is probably a prudent measure. This is because the issues involved are usually complex and may involve navigation of technical legal procedures. In general, contested divorces tend to be much more stressful, take much longer to complete, and also cost more due to attorney fees.
13
No children A short marriage (typically 5 years or shorter) Little or no property/debts owned together Total value of marital property is less than a certain amount (usually about $35,000) Each spouses total separate property value is less than a certain amount (usually same ceiling as marital property)
14
Few or no court appearances. In some states a court doesnt require you to make an appearance at all, whereas courts in other states may have you show up just once or twice. Extremely quick. Since couples filing for a simple divorce have no children and very little to no property, a big portion of what usually takes up most of the time in normal divorces is cut out. In some states a simple divorce can be completely concluded in about one month if all the paperwork is filed on time.
Check with your specific state's laws to find out more if you're interested in seeing whether you can get a simple/summary divorce. If a simple divorce isn't appropriate for your situation, then you may want to check out information on uncontested divorce or contested divorce. 15
Collaborative Divorce
Collaborative divorce occurs when spouses and their lawyers commit to negotiating a settlement agreement without going to trial. This increasingly popular approach brings each spouse and their specially trained collaborative lawyers together in face-to-face meetings to work out their issues. Often, a collaborative divorce is simpler, quicker to achieve, cheaper, and less acrimonious than a traditional divorce trial.
Documents that clarify issues are disclosed to ensure complete transparency. The spouses and their lawyers work as a team to solve problems and brainstorm solutions until they reach a mutually beneficial settlement agreement. This agreement is put in writing and presented to a family court judge for signature and inclusion in the final divorce decree.
16
If the husband and wife fail to reach a settlement and the case goes to court, the collaborative lawyers are legally bound to withdraw from the case. Each spouse will need to hire new lawyers for litigation.
Furthermore, if there is a history of abuse, serious mental illness, or financial misconduct, a collaborative divorce isn't an option.
Divorce Mediation
In some states, divorce mediation is an alternative to going to trial to decide the issues of a divorce. In others, divorce mediation is required before a divorce trial can begin. In divorce mediation, a mediator meets with a husband and wife and acts as an impartial third party to facilitate an agreement. Often, mediation is a quick, less costly way to resolve disputes and reach a mutually beneficial outcome.
encourages both parties to identify common goals, brainstorm options and accept compromise. The husband and wife evaluate their options and decide upon workable solutions. The process concludes with a written mediation agreement, sometimes called a Memorandum of Understanding, which outlines all the details that the mediation has covered. It's important to note that a mediator tries to guide couples to reach an acceptable settlement. He or she does not give legal advice or make decisions for the couple. Both the husband and wife should have their lawyers review the mediation agreement before signing it. Once it's signed, the court uses the mediation agreement to create the final divorce settlement.
19
Divorce mediation doesn't simply decide who gets what. It takes into account the unique issues that underlie the couple's conflicts. The process is intended to resolve differences and create a situation where a relationship can continue. This is especially important where divorcing couples have children and plan to share custody. In fact, many state courts mandate mediation in child custody disputes.
20
Choosing a Lawyer
If you've decided that you need a divorce lawyer, you may want to check out these tips. Find out how to choose a good divorce attorney, get the most of your consultation, and what documents to prepare for meeting with your lawyer.
21
22
attorneys who find they getting a divorce do not represent themselves, not even the divorce attorneys.
I Dont Know Anything about Attorneys. What Kind of Attorney Should I Hire?
Most people spend more time buying a new car than they do picking out an attorney to represent them in one of the most emotionally trying and difficult times of their lives. You should first gather up all the information and personal referrals you can from friends, family, co-workers and other people who went through the same thing that you are about to go through and who were happy with their attorney. Next, research and review the qualifications of attorneys in your area on the Internet. Then, go out and interview lawyers. Make sure the attorney practices in the area of Family Law. Be aware that some lawyers these days advertise themselves as being the best lawyer or super lawyers, but these self-aggrandizing titles have the potential of creating an unjustified expectation about results the lawyer can achieve.
23
24
It normally takes years of family law practice for an attorney to acquire the experience of the various types of family law cases required by the Board of legal specialization. Theuy must also undergo a positive peer review process and maintain a minimum number of hours of continuing education in the family law field.
25
26
How to Prepare for (and Get the Most Out of) Your First Meeting with a Divorce Lawyer
Written by: Monica H Donaldson Stewart, Divorce / Separation Lawyer
not had access to this information, your attorney can request that the other spouse provide the information. Try to gather details regarding both party's incomes (e.g. copies of paystubs, prior years tax returns, etc.). Finally, be prepared to discuss a budget of what your combined household expenses have been vs. what you anticipate your expenses will be after separation. Do not hold back information - an attorney cannot effectively represent you without full, accurate information.
Arrive a few minutes before your appointment is scheduled Usually, attorneys will expect you to complete intake paperwork prior to the start of your appointment. If you can request this paperwork in advance, you can save some time. Otherwise, arrive early and make sure you have basic information such as both parties' full names, contact information, employment and income information, dates of birth and social security numbers. Further, if you have children, you will need their names, dates of birth, and addresses for the past 5 years.
28
29
If you don't get a good feeling, this is not the lawyer for you. You must feel comfortable with the person you choose to represent/advise you. Your attorney will know everything about your life and will be counseling you on how to conduct yourself during the course of your case and beyond. No matter how highly recommended someone comes, if you don't think it is a good "fit," move on to someone else.
30
Here is a list of the main source documents used in a divorce: 1. Real property records.
o o o
Local address Legal description Copy of the most recent real estate assessor's statement Information as to any outstanding mortgage, deed of trust or real estate contract Exact name(s) in which title is held Estimated value of property All bank accounts of either party or businesses owned by either party
o o
2. Bank records
o
3. Tax returns and supporting documents both personal and business 4. Pay stubs, W2, K1, 1099 5. Balance sheets and profit / loss statements for selfemployed, or parties with ownership interest in a business 6. Contracts showing right to income in the future
31
7. Investment account records with sufficient information to assess tax consequences of sale of stock after award. If tracing is an issue, continuous records without a gap are necessary 8. Promissory notes, including those showing obligation and those showing right to income 9. Purchase / sale agreements - car 10. Statements for retirement benefits, and copy of Defined benefits plan, or other documents describing rights 11. Shareholders agreements, and other corporate documents for closely held businesses 12. Lists, loan applications, or other documents showing assets owned by either party 13. Present and prior Wills 14. Trust instruments with party either grantor, trustee or beneficiary 15. Gift tax returns (all) 16. Credit card statements 17. Real and personal property tax bills 18. Deeds to property
32
Divorce can be a very stressful and confusing time. Being organized and gathering the information needed to make educated decisions is critical. This transition can also be financially challenging, requiring preparation for the necessary budget adjustments.
33
Income tax returns for the past 3 years Most recent paystubs Employment contracts Statements of employment benefits Current statements for all retirement plans and IRAs Copies of all stocks, bonds, savings bonds, CDs, options, employee stock ownership plans, etc. Current statements for all bank or credit union accounts, investment accounts and mutual funds Life insurance policy declaration pages & current statements of value Deeds to all real estate Current statements for all debts Vehicle titles and registration documents Homeowners and auto insurance policy declaration sheets Current financial statements, tax returns, partnership or shareholder agreements for businesses Any prenuptial agreements
34
Birth certificates for the entire family Social security cards for everyone Marriage license or certificate Military paperwork Passports Wills, trusts and other estate planning documents that have been created
35
Develop a budget, listing all expenses. Reviewing credit card statements and check registers for the last year can help in this task.
Cut non-essential spending by identifying expenses that can be reduced, eliminated or postponed. Examples might include dining out, clothing purchases, gym fees, and entertainment expenses. Try to pay cash for any purchases, reducing credit card use.
Identify your fixed, necessary expenses such as rent or mortgage payments, car payments, utilities, food, medical insurance and expenses, etc.
Review all outstanding debt to see if some can be eliminated or minimized by transferring balances to lower interest-rate credit cards or loans.
Try to accumulate a cash reserve. This can be a lifeline if you lose your job or have difficulty receiving support payments. It will also help you fund the cost of divorce proceedings and prepare for a secure financial future.
36
Summary
Separation and divorce can be a scary time emotionally. It can also be a very financially challenging lifestyle change. Preparation and thoughtful budgeting can ease the transition. It is also important to seek legal advice as early as possible to avoid costly mistakes and to help you to plan most effectively for this huge change in your life.
37
Costs
To most people, divorce can be painful not just emotionally, but also financially. Below you'll find a wealth of information on how to manage your divorce costs. Discover great tips such as how to keep your legal fees from breaking the bank and how to get your finances in order at the time of divorce.
38
How Much Will My Divorce Cost AND How Do I Save Money On It?
Written by: David Alexander Browde, Divorce / Separation Lawyer
39
40
Why Can't My Lawyer Tell Me Now How Much it's Going to Cost?
A good question, with a simple answer. Your lawyer can't predict what the other side is going to do. If there's reason prevailing, issues can be resolved inexpensively. However, if emotions are running high (and, understandably, they often are in divorce cases) then there can be bumps in the road to 41
your divorce. Each of those bumps can cause delays and increase costs, as issues come up that have to be resolved, delaying resolution of the case and adding to the legal fees.
42
4. Communicate honestly with your lawyer. Ask questions when you have them. But make sure you've given accurate answers to the lawyer's questions, in order to avoid expense and delays when the other side comes up with something that surprises your attorney.
Divorce is almost always a painful experience. But you can limit the pain to your finances if you remember one basic principle: your lawyer is working on an hourly basis. That means that to save money you will want to minimize the number of hours the lawyer spends working on your case. Your mileage may vary, and some of the suggestions in this guide may not be appropriate for your case. But for most, these guidelines will steer you away from the pitfalls that can result in extra expense on the way to escaping a failed marriage.
43
1. Be organized
Organize your personal information in advance. Have the statistical information ready: full names of adults and children, social security numbers, dates and places of birth, date and place of marriage, whether it was a civil or religious ceremony. If you have all this information in advance, your lawyer will be able to plug it in to the multiple places the statistical stuff is needed as you move towards your divorce. Get your tax returns and other financial information ready. If child support or spousal support is at issue you'll need up to three years of tax returns as well as your most recent check stubs to show current income.
the negotiations the lawyers will be doing. Remember, when the lawyers are negotiating, the clock is ticking at least double time. The lawyers can help you get past issues on which you disagree, but if you're arguing over little things, the cost of the argument will be more than the cost of replacing whatever wedding present you think you should have.
3. Unless you need instant answers, e-mail your attorney with questions rather than asking them on the phone
That way you'll get a complete answer that you'll be able to absorb at your own pace, rather than trying to take notes on a conversation and perhaps having to repeat things that you don't understand when they're spoken rather than written. Don't let your lawyer get caught by surprise. That means don't be embarrassed, tell your lawyer the unvarnished truth about everything you're asked. The attorney won't be judging you, but you and the attorney will be the losers if the other side contradicts something your attorney has put forth as a fact.
45
5. Above all, remember, you can be penny wise and pound foolish
Saving money on legal fees isn't a good idea if the result is a bad outcome. But if you can use some of these suggestions you'll find that your legal costs are lowered substantially over the course of a contested divorce.
46
47
the new asset. For example, if a car owned before a marriage is sold during the marriage and the proceeds are used to buy a new car.
49
creditor may freeze a joint account, the outstanding balance must be paid off before the account can be closed.
lawyers to choose from so it is important that you ask important questions in order to choose one that is knowledgeable and right for you. Ask about their experience in family practice and specifically divorce. Ask the attorney to explain the legal issues as well as the legal process in your particular county.
reality be "child support"; it must be received by or or behalf of the payee; it must end on the payee's death and it must be payable under an existing agreement or order. The parties cannot file a joint tax return, and they cannot be members of the same household.
House Payments
Especially in temporary orders, one party may be required to make payments on the former marital residence while it is occupied by the other party. If the payor spouse is the sole owner of the house and is solely liable on the mortgage that he is paying, then he cannot deduct the payment as spousal support. If both parties own the house and are liable on the mortgage, one-half will be treated as spousal support. If the payee owns the house the mortgage payments are spousal support.
Attorney's Fees
Attorney's fees that are incurred to obtain or defend spousal support are deductible. If a party is required to pay the other party's attorney's fees as "spousal support", these fees are deductible. It may be necessary to segregate out which amount of an attorney's bill relates to spousal support for tax purposes.
53
Tax Refunds
Nothing is held hostage so often in divorce cases as the income tax refund check. Generally speaking, just because the parties file a joint return does not mean that they are entitled to share equally in the refund amount. Instead, this is determined by the income earned by each as if they filed separate returns.
Dependents
The custodial parent is the one who can claim the child(ren) as a dependent. This can be given to the other party by execution of IRS Form 8332. If both parents claim the child, you WILL be audited.
54
Process
Most divorces tend to follow similar procedures. Check out the Legal Guides below to learn what to expect in the divorce process from beginning to end, both inside and outside the courtroom. Just keep in mind that there may be some variation in the process across different states. This is because the divorce process is dictated by the laws of the state in which you file for divorce.
55
Jurisdiction
Before a divorce is filed, you must determine where the matter will be heard. Different states have different rules for bestowing jurisdiction. In many states, a party must have lived in that state for 180 days prior to filing. If there are two possible jurisdictions, it may benefit the party filing to serve the Divorce documents first to choose jurisdiction in their state. That is the primary benefit of serving and filing first. There is little benefit to serving and filing first other than to prepare in advance and to choose the jurisdiction.
56
Summons
A divorce case is usually commenced by serving on the other party a Summons and Petition for Divorce or Legal Separation. In some states, a divorce is also called a Dissolution of Marriage. Service in most states must be complete by actually personally serving the other party or a person who resides in their home who is considered to be of suitable age and maturity. In most states, a party may not serve their own divorce papers. The Summons is a generally document announcing that a divorce or legal separation action is being commenced. In some states, that document also indicates that from that point forward neither party may dispose of marital assets, change insurance coverage or modify any other significant holdings except for the necessities of life.
Petition
The Petition has two parts. The first part is a statement of facts which sets out basic facts such as the identities of the parties, whether they have children and what assets they may hold. The second part of the Petition seeks relief such as an award of custody, spousal maintenance or child support and a division of assets and debts. The Petition is often tailored to seek the maximum relief. It is a positioning paper 57
that will often seek as much relief as the proponent could possibly seek.
Temporary Hearings
A temporary hearing may also be called a Pendente lite hearing. Such hearings may be scheduled by either party by filing a Motion supported by an affidavit.
58
Temporary/Pendente lite hearings are designed to resolve issues while the divorce is pending such as who will have temporary custody; temporary support and/or maintenance; where the parties are going to reside pending the resolution of the case; protection from harassment and domestic violence; injunctions against financial improprieties; use of assets. In most states, temporary hearings should not affect the final outcome. However, from a practical perspective, temporary hearings can be very important since Courts often favor a policy of maintaining the status quo. Temporary orders may be changed if there is a substantial change in circumstance during the pendency of the divorce to make the change in the temporary order necessary.
Mediation
Many courts require the parties to attempt to mediate their disputes before the matter is submitted to the Court. One exception to this rule may be where domestic abuse has occurred. Mediation may occur between the parties of with attorneys present. Mediation means that the parties visit with a qualified neutral who will attempt to get them to resolve their differences. In mediation, the neutral is not an advocate and still not provide legal advice. Most discussions that occur in mediation are not admissible in Court under the public policy consideration that favors a free exchange of 59
Co-parenting Classes
Many states have adopted a policy that requires parents to attend co-parenting classes where children are involved. The goal is to teach parents how to minimize the impact of children involve in a divorce. In most cases, the parents need not attend together. Some states also require that children of a certain age attend a class to teach them the skills to deal with divorcing parents. This is not embraced in all states and is primarily found in Northern states.
Discovery
Discovery refers to the "investigation" phase of the case. It is primarily dedicated to identifying the contested issues, a
60
determination of assets, income and debt of the parties. This exchange of information can be conducted informally with eth parties agreeing to freely exchange the information or formally, through the submission of formal documents that require answers under oath.
Interrogatories
Interrogatories refer to a form of discovery where written questions are submitted to the opposing party to a lawsuit. These questions must be answered in writing under oath or under penalty of perjury within a specified time (usually 30 days). Objections may be made to questions that are overbroad or unlikely to lead to admissible evidence. Most states limit the number of interrogatories that may be asked without the court's permission to keep the questions from being a means of oppression rather than a source of information.
Document Requests
A request for production is another part of the discovery process. Either party may send a request to an opposing party or witness for relevant documents related to the proceeding. You may wish to review our list of Documents that may be relevant to your case. Generally, documents requests require that the party served provide any and all 61
documents requested that they have in their possession within a specified period of time (usually 30 days). If you do not possess the documents requested, you do not have to acquire them if it is not easy to do so. The opposing counsel may acquire those documents through other remedies such as subpoena or by having a party sign a Release of Information.
Releases of Information
The opposing party may send a release of information to the other party seeking to acquire documents from a third party that is relevant to the case. Examples of documents that may be requested include bank statements, medical records, financial records, work schedules and income information.
Depositions
A deposition can be a more expensive form of discovery. It allows a party to subpoena and depose any individuals who 62
may have information relevant to the case. This includes parties and non-parties alike. In a deposition, the party being deposed appears at the attorneys office or a neutral location to answer questions put by the other side's attorney regarding the facts of the case. Depositions are under oath with a court reporter present so that everything that is said is recorded. A deposition is scheduled to pin a witness down to certain facts and to discover all possible documents and witnesses related to a case.
Experts
Experts are often employed to determine certain facts. Those experts may be jointly agreed upon by the parties, which can save on the cost of having individual experts testify at trial. However, where that is not possible, each side may hire an expert to contest an issue and require their testimony at trial. Common experts include: custody evaluators; financial planners to determine future economic circumstances; business evaluators to value businesses; real estate appraisers to value real estate; personal property appraiser to value furnishings and other assets (generally an auctioneer experience d in home goods); vocational evaluator to determine earning capacity; psychologists to testify to mental health issues.
Settlement
A divorce or legal separation case may be resolved at any time the parties come to an agreement on the issues. In such cases, the parties would sign a Marital Settlement Agreement or some other form of stipulation resolving their issues. This can occur right up to the point of trial. 64
Trial
If you are unable to settle your case with your spouse, it will go to trial. Some states have a trial by jury. Other states have a trial by judge. At trial you each tell your story to the judge. It is told through your testimony, the testimony of other witnesses, and documents called exhibits. st trial, the moving party (usually called the petitioner or plaintiff) presents their case first. The call their witnesses who are subject to crossexamination by the opposing party. When the plaintiff or petitioner rests their case, the Respondent or Defendant presents their own case with witnesses and evidence, each subject to cross examination by the opposing party.
Appeals
After a divorce, either party has a right to an appeal if they disagree with e Judges ruling. The time lines for appeal are severely limited. As a result, you should consult with a lawyer in your state regarding those time lines.
Modification
Whether the issues in your divorce are settled by you and your spouse or are decided by a judge, some things in your judgment can be modified (changed) by a judge after a
65
hearing. Usually, child support, alimony, child custody, and child visitation can be modified, but only if one of you can show that there has been a change in circumstances.
Enforcement
If you or your spouse disobeys an order that the court makes in your divorce judgment, you may file a Motion to compel compliance. Such motions are generally for contempt and require the service of an Order to Show Cause and a Motion.
66
Property Division
Depending on how contentious your divorce is, the process of dividing all of your marriage assets can be anywhere from relatively painless to extremely complicated. Thankfully, most divorcing couples are able to reach an agreement on their own without resorting to legal warfare. Here you can learn the basics of how property, other assets, and debts are divided in a divorce.
67
68
Equitable property
Most states are equitable property states (or separate property states). Under the equitable system, a court divides marital property according to what it considers to be equitable, or just, to both parties. This is why an equitable division isnt necessarily always a 50-50 split. In some of the rarer circumstances, one spouse can end up with almost all of the assets if this is what the court deems as fair. In equitable property states spouses are generally awarded property in proportion to how much they contributed to the marriage. Often, the spouse who earned more will receive the larger portion of the property and assets because they contributed more financially to the union. However, a court often balances things out by taking other factors into consideration as well. Some of examples of these factors include the length of the marriage, the earning potential of each spouse, the standard of living established during the marriage, the value of a stay-at-home spouse who took care of the children, etc. The court evaluates the financial ability of each spouse when considering marital debt and liability distribution.
69
Community property
Community property law only applies to these nine states: California, Arizona, Idaho, Nevada, Louisiana, New Mexico, Wisconsin, Washington, and Texas. (Puerto Rico also falls into this category.) In a community property state, a court looks at all assets that were acquired during marriage and then divides them equally between the spouses during divorce. All assets are divided equally regardless of who owns title to them. For example, both spouses are considered to own all money equally even if one spouse doesnt work. The only time when marital assets arent split equally is if a prenuptial agreement was in place. In addition, community property laws also apply to all joint debts and liabilities because these count as marital property. This means that all debts and liabilities are equally divided between both spouses.
70
In a divorce, some assets may be considered non-marital and, as a result, are not divided in a divorce proceeding.
71
72
Appreciation: The Courts make a distinction between "active" and "passive" appreciation. Passive appreciation of a non-marital asset remains nonmarital. Passive appreciation occurs when an asset increases in value without any action by the parties. For example, if the value of real estate increases without the parties improving the property, it is considered passive. Active appreciation is a marital asset. Active appreciation occurs when the value of an asset increases because of an act by the either of the parties during the marriage. Capital improvements to real estate during a marriage may create a marital interest since a capital improvement is likely to add to the propertys value. Manipulating a stock account or transferring a mutual fund from one account to another resulting in an increase in value may also be "active appreciation" which creates a marital interest in an otherwise non-marital asset.
party may be able to trace a non-marital interest in the new vehicle. Tracing is really the process of establishing a sufficient paper trail to claim a non-marital interest in a subsequently purchased asset. Often, presenting a persuasive property case depends on clear cut documentation, and expert testimony.
75
negotiation guidelines that can help you reach a property settlement without litigation.
vehicle(s), insurance, retirement plan(s), any businesses, securities (stocks, mutual funds, bonds, CDs, etc.), cash, and collections and other valuables. Using a property checklist can help you take a complete inventory of everything. Attorneys usually have these checklists, so make sure to ask yours for one.
The negotiations
Traditional negotiations. Traditional style negotiations usually involve each spouses attorney. Each side presents their respective interests until an agreement is achieved. The negotiations may span several meetings between both parties and their lawyers. In difficult cases when the parties are unable to agree, the lawyers may draft the terms and negotiate on behalf of their clients. Mediation. This process is a good choice because it is non-adversarial, thereby allowing a husband and wife to come to an agreement on their own through the assistance of a neutral third party. Usually the third party has experience with conflict resolution and can help reduce hostilities significantly on both sides. Collaborative divorce. Both parties sign an agreement beforehand which commits them to reaching a 77
settlement; if a settlement is not reached then the lawyers withdraw from the subsequent litigation. The parties may use experts or specialists to help them reach mutual agreement on issues. Other alternatives. If you and your spouse just can't agree on how to split the property, then you may find these other methods useful (like silent auctions, taking turns from a list, etc.).
division of property is to become effective. The Court must consider the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse with whom any children reside the majority of the time. Therefore the parent who has primary care of the children has the advantage.
Financial feasibility
A court may also consider whether it is financially feasible for the primary parent to maintain the home, refinance the mortgage and pay the obligations related to the home.
79
Additional factors
Other factors that a court will consider in allocating the family home include the contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as a homemaker.
Deferred compensation refers to pension plans, 401K plans, IRAs and other retirement assets. Such plans are divisible as part of a property settlement in divorce regardless of which party is named on the plan. How they are divided depends on the value and nature of the asset. Perhaps one of the worst scenarios in a divorce is when retirement assets are transferred to a former spouse but the original owner is
80
liable for liable for the taxes, including penalties for early withdrawal.
81
IRA proceeds may be cashed out and paid directly to the receiving spouse or they may be "rolled" over into a new IRA in the name of the receiving spouse. However, the tax consequences related to cashing out the plan may reduce the plan proceeds by more than thirty percent (30%) for taxes and early withdrawal penalties.
Often, the Participant may choose a payment method from several options. The chosen method will affect the amount or timing of the payments to both the participant and any receiving spouse. This may mean that retirement benefits are received when the original participant decides to retire, not when the recipient spouse retires. A defined benefit plan may be divided in one of two ways: 1. Cashing Out/Present Value Calculation. First, a recipient spouse may elect to receive money effectively cashing out his/her interest in the plan. To cash out, a present value of the plan proceeds must be determine. "Present Value" is the current value of a future benefit. In simple terms, a dollar that you receive today is more valuable than a dollar you receive next week since you may invest the dollar or deposit the dollar and accrue interest. Therefore, retirement benefits that are received at retirement age would have a lower value if paid in a lump sum currently. Often, a calculation or of present value requires an actuary or accountant.
83
2. Division of Future Benefit. Rather than using a present-day cash value, a defined benefit plan may be divided by dividing the future stream of income. This is accomplished by drafting a Qualified Domestic Relations Order (QDRO). This is a court order which instructs a pension plan to pay an Alternate Payee (or former spouse) a portion of retirement benefits accrued by a Participant due to an equitable distribution agreement in a divorce. With this method, the court retains jurisdiction until the benefits are paid.
84
Business valuations
One of the first and most important steps to take is to get a business valuation. Even if your soon-to-be ex tells you that theyve been earning X amount from the business every year and that the business is worth Y amount, dont take their word for it. Always keep in mind that they dont necessarily have your best interests at heart, so you should take basic precautions to protect yourself. This includes getting an independent appraisal, or engaging a joint appraiser with your spouse. Calculating the value of a business isnt exactly a science, which is why in most cases two different appraisers will assess different values to a business. However, the Institute of Business Appraisers (IBA) and the American Society of Appraisers (ASA) have issued standards for valuing businesses, which means that appraisers tend to follow a similar general procedure. This helps ensure that even if two different appraisers arrive at different values, the two value amounts should be fairly close to each other.
85
86
87
Dangers
Even a debt that is current may affect your ability to qualify for new credit since the outstanding debt will appear on your credit report; Unpaid joint debt may adversely affect your credit rating and impair your ability to acquire new loans; An unpaid joint debt may result in collection efforts and costly court appearances; An unpaid joint debt may result in the entry of a Judgment against you; An unpaid joint debt may result in garnishments or liens.
88
satisfying the debt with a credit card in that partys name. This may be more difficult with larger obligations like a homestead mortgage. Sell Assets. Sell any assets that are encumbered by a joint security interest. This specifically includes real estate. It is important to remember that transferring the title of the asset into one persons name does not eliminate responsibility for the debt. If you take your name off of title, whether the asset is a car or a house, you are removing ownership but not loan responsibility. Refinance the Debt. Have one spouse refinance the home in his/her own name. If one spouse is going to keep the house, you should insist upon new financing. The mortgage company will not simply remove one party from the responsibility for the loan. As with any new financing, the party seeking to refinance will be required to qualify financially. Often, the financial impact of the divorce may make qualifying difficult. In such cases, it may be possible to find a relative willing to co-sign on the new loan. Include Protective Language. Clearly, the best way to resolve joint debt issues is to eliminate the debt or the joint nature of the debt. Sometimes, however, those options are impractical. In such cases, you must be 89
very careful to place protective language into the divorce agreement or to specifically request protective language from the Court at trial. This is a last resort and an imperfect way to resolve joint debt issues. Often, protective language allows recourse against a party that fails to pay court ordered debts, but does not prevent damage to other partys credit. The language used must be carefully crafted to comply with state and federal law. Any omission may result in language that is unenforceable and ineffective.
included and potentially available to pay debts. Your bankruptcy estate is everything you own at the time the bankruptcy is filed. Once the bankruptcy is filed, the court issues an immediate stay to stop creditors from collecting debts. Your spouse will still have to pay child support or alimony; however, they may not have to perform other tasks, such as refinancing to remove one spouse from the mortgage. I am involved in a case now where the wife is under a court order to refinance and remove her husbands name from the mortgage. For the last several years she has not complied with the order. The wife filed a bankruptcy to restructure her debts and the divorce court is powerless to force her to complete the refinance.
Property settlements
Whether the bankruptcy court discharges a divorce property settlement will depend on whether the debtor can show they cannot pay the debt and still take care of themselves, their dependents, and their business. Generally, property settlements are not dischargeable in bankruptcy. Exempt property is protected and not available to be sold to pay debts. Each state where a bankruptcy is filed has its own
92
exemptions. For example, in Illinois each filing spouse can exempt $15,000.00 of home equity.
Protect Yourself
An effective way to protect yourself against your spouse filing a bankruptcy is to take lien on property your spouse gets in the property settlement. This makes you a secured creditor. If later, they file a bankruptcy you can repossess the property to pay the debt.
Information and involvement are critical for discovering hidden assets. Hidden assets are mostly liquid in nature; examples are bank accounts, stocks, bonds, and mutual funds. The reason why theyre usually liquid is because this type of asset can be easily transferred into the name of a relative, friend, or business entity. Sometimes the funds are transferred into accounts in offshore banks where they cannot be touched under the laws of the country of residence.
some other unknown account. Here are more examples of good places to look. Old financial statements may help identify suspicious transactions. ATM activity can throw light on cash which may have been placed in some hidden account. In particular, getting a credit report on your spouse is a good idea because it may contain information on financial accounts or credit unknown to you. Some clues to find hidden assets:
Income that isnt reflected on financial statements and tax returns. Cash kept as travelers checks: Locate by tracing bank account deposits and withdrawals. A custodial account set up in the name of a child. Investment made in certificate "bearer" municipal bonds or Series EE Savings Bonds: Since these are not registered with the Income Tax Authorities, they do not appear on account statements.
Artwork, antiques, gun collections, hobby equipment, original paintings, expensive carpets and tools: Have everything appraised, and dont forget to check your spouses work office for items.
95
Debt repayment to a friend which actually was never a debt. Delayed disbursements of bonuses, stock options and accounts receivables till after the divorce. Expenses incurred towards gifts, travels, tuition fees or rent of a friend. Retirement accounts that were never disclosed. Deliberate devaluation of property: Allowing rental property to remain vacant or unrepaired so that divorce allocation is done on the basis of the devalued price.
Payment of excess income tax and subsequent filing for the tax refund after the divorce.
If you are fairly sure that your spouse has hidden assets, then it may be a good idea to engage an experienced attorney to help you find them.
96
Alimony
Many divorcing spouses have questions about alimony (a.k.a. spousal support), usually regarding whether it has to be paid and how much money it involves. What isn't so widely known is that spousal support is becoming a thing of past because men are no longer the usual sole breadwinners. Learn about the basics such as the following: the types of spousal support awarded, factors of spousal support, enforcement, and termination of spousal support.
97
sure to consider the tax impact when calculating the true cost of your alimony payments. To qualify as tax-deductible alimony, the payments must be in cash and must be spelled out in a written divorce agreement or decree. You can't file a joint tax return or be living together and claim a tax deduction for alimony.
maintain his or her standard of living. Alimony pendente lite is also referred to as temporary alimony or temporary spousal support.
the amount required for each spouse to continue living as they had during the marriage. The amount awarded should be enough so that each spouse can live equally comfortably until the divorce is final.
Rehabilitative Alimony
Rehabilitative alimony is short-term alimony paid to a spouse until he or she is self-supporting. The spouse can use the payments to acquire new job skills and cover expenses until 101
he or she finds employment. The amount and duration of rehabilitative alimony varies according to the particular circumstances of the marriage and by state.
Length of the marriage Age of dependent spouse Earning capabilities of dependent spouse Length of dependent spouse's absence from job market Time and expense necessary to educate and train dependent spouse
If age, illness, disability or other factors prohibit the dependent spouse from finding suitable employment, the court may award permanent alimony.
Evolution of Alimony
Historically, marriage made a husband duty-bound to support his wife, and that duty did not end even if the marriage did. However, alimony was tied to the idea of fault. If the divorce was due to the womans fault (adultery, abandonment, etc.), then she did not receive alimony. Today, all states, with the exception of New York, have adopted no-fault divorce laws. About half the states do still consider fault as part of spousal support determinations, although Kentucky only considers fault on the part of the person requesting spousal support. As a result, spousal support awards are now based on other facts about the marriage.
104
Length of marriage: The longer you've been married, the more you've theoretically put into the marriage, and the greater the likelihood of the court awarding alimony.
105
Children: Children's welfare is of great importance to the court, which may decide it's best for them that the custodial parent not work full-time, especially if they are young and daycare options limited. Slightly more than half of states consider whether the person requesting alimony is the custodial parent. Standard of living during marriage: Most states try to ensure that both spouses can maintain a similar standard of living after divorce, if possible. Ability to earn: Courts look at what both spouses currently earn as well as their future earnings potential. If one of you expects to earn significantly more in the future, this could affect the size and/or duration of alimony. Ability to self-support: Courts consider the petitioning spouse's marketable skills and ability to work outside the home. If you can work but did not do so during the marriage, you may receive temporary alimony to ease the transition to selfsupport. Being unwilling to work is not the same as being unable, and the courts may deny or reduce alimony if you refuse to find work. Emotional/Educational Support: If one spouse supported the other through schooling or other difficulties, the courts may take this into 106
consideration and award alimony as a kind of compensation for this previous support. Because state laws differ greatly, consulting an attorney is a good idea so that your interests are protected adequately.
An increase or involuntary decrease in the supporting spouse's income An increase or decrease in the recipient's income An increase in the cost of living A disability that affects either spouse
107
A financial emergency (for example, a large medical bill) that affects either spouse The recipient's loss of his or her home The recipient's cohabitation with another person The remarriage of the supporting spouse A change in state laws
Alimony ends at the death of either spouse. In most states, alimony may also end when the recipient remarries or registers as a domestic partner unless terms for continuing alimony are included in the divorce settlement.
108
his or her financial situation, including tax records, before the court examines the other spouse's financial situation. If the parties reach an agreement, a judge can approve a modification without going to trial. Both parties may need legal counsel if the case goes to trial.
110
111
If there are terms in your divorce settlement outlining conditions for alimony termination, the court may still want proof of a recipient's financial independence before making a decision.
112
113
114
going to be their parents. Remember that older children will have deeper questions, so plan on addressing them at another time. Stay calm, don't blame This is not the time or place to play the blame game. Staying calm and confident eases some of your kids' anxiety about the future. Seeing that you and your spouse respect each other and talk with each other will reassure them that they can talk with you and rely on you. Explain why this is happening Specifics are not necessary or appropriate, but oversimplified reasons may confuse them. Give good, general reasons. Your children want to understand, so make sure your message is simple, straightforward and age appropriate. Help them understand what to expect Give your kids details about the changes ahead. They will be concerned about where they are going to live and with whom. You don't have to have all the answers. Be truthful about what you know-and what you don't know. Do not make promises you can't keep.
115
Give them details on the parent who is leaving Kids afraid of "losing" the parent who is leaving need reassurance that the relationship they depend on will continue. Tell them where their parent is moving, and when they will see each other.
Reassure them of things that won't change Most reassurance you give your children will take place in small, everyday ways. In this conversation, make sure they know that they are no way at fault. Be sensitive to their reactions, but be prepared to give them time to adjust. Remind them of your unconditional love for them. Remind them again and again with hugs, smiles, affection and attention to their lives.
Welcome questions Your children will have questions-now, and in the future. In fact, they will develop new concerns or revisit aspects of the divorce often as they grow. Answer as honestly as you can, even when you have to say, "I don't know." Let your patience, courage and love comfort and guide you all through this difficult life transition to a hopeful future.
116
Divorce is stressful not only for adults, but children too. The reactions you may receive from your child(ren) may differ greatly depending on the child and circumstances surrounding the breakup. Fortunately, parents can help their kids during a divorce.
only in the rarest of circumstances is this good for your child. The majority of children charged with crimes in our juvenile justice system do not have the active involvement of both parents.
118
any potential plans or agreements with your respective attorneys, and seek their input, but do not sign anything without talking to your lawyer first.
120
Never Introduce New "Significant Others" During a Divorce Never ever, ever introduce a new "significant other" into your children's lives during or even shortly after the divorce. This will confuse them, upset them, and will make them very angry and resentful. Take this time to concentrate on the children and building your relationship with them, rather than a new love interest.
121
Get Agreements with Your Ex Regarding Raising the Child Parents should discuss, agree, and then mutually enforce appropriate limitations concerning the use of cell phones, computers, video games, television, and similar electronic devices or modes of communication. You should include what ratings are acceptable for television, movies, and video games, as well as appropriate curfews or bedtimes.
122
were originally in his or her possession, unless a prior agreement is made with the other parent in advance. The child must be permitted to have photographs, correspondence, and personal items from both parents in their personal space.
Parenting Plans
Written by: Mary G. Commander, Divorce / Separation Lawyer
A parenting plan is a written document which sets forth the parenting schedule of each parent with the minor children. It also may include responsibilities and duties, as well as prohibitions during the time that the child is in each parent's care.
123
Other states leave it to the parties or the individual judges to devise whatever visitation schedule they deem to be in best interests of the children in a particular case. The American Academy of Matrimonial Lawyers (AAML) has created a Model Parenting Plan which can be used as a resource for specific provisions.
Times/days for parenting time (Including Summers, Holidays, Birthdays) Who will be doing the driving for pick up and drop off and where pick up and drop off will be Make up days/time for missed time due to illness Doctor/dentist appointments School decisions; school notifications Daycare, babysitting, right of first refusal Payment of expenses Prohibitions, such as no alcohol use 124
Any special circumstances Remedy in the event of disagreement, such as mediation before filing in court
The goal with parenting plans is to fashion a plan that meets the child's developmental, emotional and social needs and facilitates the child's adjustment to the new living arrangement.
Every state has child support guidelines that set forth the presumptive amount due from one party to the other in a divorce or suit affecting the parent-child relationship. Below you will find an example calculation for Texas. While this calculation is applied in most cases, a request to deviate from the guidelines can be made in some circumstances.
125
Wages Overtime work Commissions Tips Bonuses Rental income Interest income And the like
From the gross income, the Court will determine the net income of the paying party by deducting social security taxes, federal income taxes based on the tax rate for a single person claiming one personal exemption and the standard deduction, state income tax, union dues, and expenses for the cost of health insurance for the child (if any).
126
If a paying party's net resources are $7,500 per month or less, the following child support will almost always apply:
For 1 child, the child support order will be 20% of the paying party's net resources. For 2 children, it is 25%. For 3 children it is 30%. For 4 children, it is 35%. For 5 children or more, it is at least 40%, if not more.
Determine if there are special factors which might suggest deviating from the guideline amounts.
There may be circumstances when it is in the best interests of the children to deviate from the child support guidelines. This may include:
Special or extraordinary educational Health care or other expenses of the parties or child The cost of travel if it is necessary to see the child The financial resources available for the support of the child The ability of the parents to contribute to the support of the child And other such factors
127
If those facts are present, a court may deviate from the child support guidelines and enter a support order that is lower than or higher than the amount recommended in the guidelines as described above.
Our society has become increasingly mobile over the past several decades. As a result, parents often seek to relocate away from the other parent after custody has been determined. Such relocations can wreak havoc on family relationships.
128
Notification and Objection A parent seeking to relocate must generally notify the other parent well in advance of a move. The timelines for that notification are specified in many state laws. Those same laws also provide specific instructions regarding the information that must be included in the notification. In states that require notification, the other parent may also usually file an objection to the relocation or file a Motion seeking to prevent the relocation Consent and Order Yet other states require not only notification, but consent of the other parent to allow the move. In the event the both parents do not consent, often the parent seeking to relocate most bring a motion seeking permission of the court. This often would include a request for a change in custody.
Factors Considered
Often state statutes spell out factors that a court must consider when determining whether to allow children to relocate away from one parent. Some factors courts consider when making determinations to allow or disallow a move include:
129
1.
The relative strength, nature, quality, extent of involvement, and stability of the child's relationship with each parent, siblings, and other significant persons in the child's life.
2.
Prior agreements in divorce decrees or orders of the parties. Such agreements are often given great deference.
3. Whether the relocation would substantially interfere with the other parent's relationship with the child and the extent of thar interference. 4. Whether the benefit of the relocation outweighs any harm caused by the relocation. 5. The reasons of each person for seeking or opposing the relocation and whether the request is made in good faith or is intended to interfere with the other parent's rights. 6. The age, developmental stage, and needs of the child. 7. The quality of life, resources, and opportunities available to the child and to the relocating party in the current and proposed geographic locations. 8. The availability of alternative arrangements to foster and continue the child's relationship with and access to the other parent. 9. The financial impact of the relocation as it relates to parenting time including the cost of travel. 130
131
After Divorce
You've survived the hardship of divorce; now it's time to move forward with your life. If you find that your ex-spouse is not adhering to the divorce decree, you may have to deal with related issues for quite a while after. Find guidance below that covers the essentials on many of these issues and can help you learn what to do in common scenarios such as enforcing your divorce decree, appealing your divorce, or resolving parenting disagreements.
132
Non-payment of child support Non-compliance with visitation schedule: this can involve the custodial parent refusing visitation to the non-custodial parent, or the failure of the noncustodial parent to return a child home on schedule Non-payment of alimony
If your ex-spouse has violated any portion of your final divorce decree, you may file a contempt of court motion, either through your attorney or on your own. If you file yourself, it is your responsibility to ensure that your exspouse has been served with the motion and receives notice 133
of the date and time of the hearing. Even if you choose to handle the contempt action yourself, you should at least consult with a lawyer to be sure you do it right. In addition, you can find sample motions and the exact filing procedures in your local court's family law guidelines regarding divorce.
134
hold your ex in contempt of court. If the judgment is in your favor, the judge will issue a written order detailing the contempt order and how it can be resolved. Usually your ex will then have an opportunity to fix the issue, either immediately or within a specified time period. If your ex does not comply, the judge may order jail time until the matter is resolved. Even if your ex does not comply within the specified time, it may not result in jail time. For example, if a failure to pay child support or alimony is due to job loss, the judge may feel jail time is not warranted, especially if your ex is actively looking for another job. After all, it is difficult to find work from jail. The goal of a contempt of court motion is not to punish or humiliate your ex-spouse, no matter how much you may want that. The goal is to ensure your ex makes right previous violations of your divorce decree and also understands that you will not tolerate any further violations.
135
136
Appeal process
Most states give you a limited time after your divorce decree is finalized to file a notice of appeal, generally about 30 to 45 days. The notice of appeal tells the court that you intend to appeal the ruling. It describes the issues you want to appeal and why you believe the original ruling was wrong. You will usually also have to file the trial transcripts from your original divorce proceedings, along with any evidence entered into that trial. You may not enter any new evidence and no new testimony is involved. Once all documentation is in place, the appellate court, usually consisting of three judges, reviews it all. If the appellate court sides with you, it will order a reversal, which overturns the trial ruling. It will also usually issue a remand, ordering the trial court to revise the decree based on the appellate courts orders. There is no guarantee that the appellate court will find in your favor, and in fact, it is unlikely. If it does not, it will affirm the original divorce decree and you will then have to abide by it. Your best chance at a satisfactory divorce decree is to make the most of your divorce trial. Make sure your attorney 137
aggressively represents your best interests and presents all pertinent evidence. Remember, unless the judge in that trial makes a serious error in judgment or acts fraudulently, the appellate court will most likely deny your appeal.
All too often, disputes regarding custody and parenting time do not end with the final divorce degree or paternity order. When parenting disputes arise regarding legal custody decisions, parenting time issues or even modifications, there are options available to parties outside of the court room. In addition to mediation, a court may order the appointment of a parenting specialist such as a parenting consultant.
Parenting consultants
A parenting consultant is a neutral party whose role it is to assist parents in divorce, paternity or legal separation matters with their parenting issues. The parenting consultant often fills the role of a child development specialist who may be called on when disputes occur between parents to mediate the disputed issue and to provide insight into parenting decisions and their impact on children. 138
139
For additional information regarding Divorce, visit http://www.avvo.com to find legal advice online from licensed professionals, or to ask a question in Avvos free Q&A forum.
With more than 100,000 participating lawyers, Avvos professional directory enables consumers to find a lawyer by providing comprehensive profiles, client and patient reviews, peer endorsements and the industryrecognized Avvo Rating for more than 90 percent of lawyers in the United States.
140