Archive for November, 2015

What Exactly Is A No-Fault Divorce?

Monday, November 30th, 2015

A no-fault divorce is the type of divorce in which a spouse files a divorce based on irreconcilable differences. The spouse who is asking for a divorce, A.K.A. the plaintiff, is not required to provide a reason for wanting the divorce to the family court. They don’t have to provide any information about what their partner did or did not do. It is no longer necessary to claim what the other party has done that caused the desire to end the marriage.

In almost all “no-fault” divorces, plaintiffs can file for a divorce based on irreconcilable differences, or the relationship is beyond the point of reconciling, or incompatibility. All of these three equate to the same thing, which is that the two parties cannot coincide anymore and that the relationship cannot be repaired anymore.

This type of divorce is non-objectionable by the defendant nor by the spouse receiving the divorce.

What Are 5 Ways Divorce Will Affect My Finances?

Tuesday, November 10th, 2015
  1. Legal Expenses: Getting a divorce is not only a long and difficult process, but it also can be financially impactful as well. Because divorce cases are generally so long in duration, it’s not as if you make one payment to your attorney (and your spouse’s attorney if the court finds you must cover their expenses), but rather there are multiple payments throughout that you will have to make, and when it’s all said and done, the cumulative total from legal expenses alone can be really debilitating. This is why couples often seek to settle quickly, if they can, and outside of a courtroom. However, some cases are too complicated, and consist of too many variables, to be settled quickly and before a judge is involved.
  2. Post-Divorce Childcare Expenses: Now that you are on your own (presumably), and are using your own personal income to cover expenses for your child, you would be surprised how much it will take from your bank account. It is easy to forget how expensive children can be when the costs are shared between you and the child’s other parent, because you are simply only paying for part of the expenses. This is a completely separate issue from child support, which is paid to the parent rather than to the child’s insurance company or the like. Child support, if you are the parent that will be paying, can also be a huge expense, and is something you should be aware of, especially because if the court decides you are to pay child support, it’s not optional.
  3. New Taxes: Now that you and your former spouse are no longer together, you will have to file independent (single) tax returns and other forms, as opposed to a joint tax return that you and your spouse may have had during the marriage. This change in itself can considerably raise the yearly taxes you have to pay. In addition, just by filing your taxes with a single status, your taxes will be higher than joint tax filings.
  4. Retirement Plan: Because you will now be the only one putting in money into your own retirement account, the costs that come with plans like Pension’s, an IRA or a 401(k) will seem exponentially higher. Much like with childcare, because you are now making certain payments on your own, you are no longer only paying part of the total, but the entire bill.
  5. Personal Insurance Policies: When you’re married, prior to even considering divorce, you envision your partner and yourself together for life (till death do you part, right?). Because of this, you may not have a health care insurance policy for yourself for when you get older, and health complications begin to arise. Now that you aren’t with your former partner, make sure you are covered for the long-term with regard to your health. While these are very important to have, bear in mind that healthcare coverage for yourself can be very expensive, especially since you are paying the entirety of the policy. When all of these variables in play, the divorce process, as well as the results that will follow, end up accumulating into a huge and overwhelming hit to your financial well being.

3 Common Ways Spouses Conceal Wealth From Each Other

Wednesday, November 4th, 2015

People are naturally stingy with money, and when you have someone who is overly protective of their private wealth, you would be surprised at some of the tactics I have seen that some go through in a desperate attempt to keep what is theirs. This is especially true when it comes time for couples to begin the divorce process, which includes the separation and distribution of money and property. I have seen every stunt pulled by wildly greedy spouses, desperate to keep every last dime in their procession, and hidden far and away from the court, their spouse’s attorneys, and sometimes even their own attorney. With that being said, I have narrowed this long list down to the three most common and, to be frank, the most successful tactics used to hide personal assets in anticipation of the divorce proceedings.

One popular move is transfer their assets to a separate account:  Generally speaking, the transfer is from the joint bank accounts, and any brokerage account, where both spouses have been depositing money, and into a solely owned bank account, under only one of the parties’ names, and often these transfers happen very quickly, because if one of the spouses are engaged in this, why wouldn’t the other be? This fraudulent act has had scattered success, especially when that separate account could possibly be an off-shore account.

Another popular method is to create fake expenses, and use them as excuses as to why they “don’t have the funds” to cover legal fees, or pay some type of support. It isn’t terribly hard either, especially if they have accomplices to help sell the story of where there money went, and more importantly, why you can’t have any or see it.

Lastly, and this one is really conniving, is if they take out cash withdrawals from a debit card. At almost any store you shop, after swiping the debit card, and then entering the pin and so forth, you will often be asked if you want cash back. Most of us answer no, because we want that money to stay in the debit account. However, your spouse can just get groceries, but also withdraw amounts up to $80. Overtime, this could build up very quickly, and it would never be noticed because on the billing statement it will just say the store and items purchased, leaving no trace of the cash withdrawal. It is all just shown as part of the groceries. Pretty clever, huh

When Is It Too Late For A Postnup?

Wednesday, November 4th, 2015

Many of my clients come to me asking if there is any point when it is too late to get a postnuptial agreement, and the answer to this question is no, it’s never too late. A common misunderstanding by many couples and individual spouses that I meet with is that nuptial agreements can only be made before the wedding, hence the “pre-“ in “pre-nuptial”. And while a prenuptial agreement is most commonly suggested, couples who have already married can still draft an acceptable marital agreement, known as a postnuptial agreements.

Just like with a prenuptial agreement, a postnuptial agreement can guarantee that the interests of both parties are protected if there ever is a divorce. Prenuptials and postnuptials both permit the spouses to make the big decisions regarding distribution of marital property and asset protection, as opposed to a judge. Postnuptial agreements may also help settlement with respect to who is accountable for certain liabilities, for example credit cards or student loans after a divorce are financial liabilities.

Postnuptial agreements can be drafted and legitimized at any time during the marriage, even if the spouses are newly weds or if they’ve been married for over 15 years. Postnuptial agreements are perfect for couples that have faced a lot of changes in their relationship, a change in financial status, or perhaps both. Postnuptials are very useful for couples that have children from a previous marriage, because they’ll be able to guarantee that the interests of said children will be protected along with their own.

Postnuptial agreements detail the rights as well as the responsibilities for the spouses during the marriage, and after the marriage in the case of divorce. This agreement varies by situation.

Many think that these agreements are only for wealthy couples, and this is not the case at all. Most couples can benefit from a postnuptial agreement regardless of their financial status. Accumulating these draft agreements early gives couples the opportunity to work out some issues that often cause turmoil in the marriage, leading to a divorce.

For a marriage that eventually ends, a postnuptial can soften the proceedings. The agreement has taken care of the majority of important issues, which allows you and your attorney to be able to deal with any other problems that could arise. This can make the divorce proceedings get finished quickly, instead of dragging out the proceedings, saving money and energy, both mentally and emotionally.

5 Simple Ways To Organize Your Finances Before Divorce

Wednesday, November 4th, 2015

Many individuals who are going through a divorce go through a variety of emotional and financial dilemmas. Thankfully, they can all lessen the effects of the monetary issues by being proactive in organizing their finances. When two spouses decide that they want to separate, each should retain a divorce attorney. Some lawyers don’t bill for the first consultation, which then allows clients to begin the difficult divorce procedure without the stress of having to instantly pay a hefty sum for legal advice. Some divorce attorneys bill hourly, meanwhile others may charge just a flat fee.

Clients can do their part ahead of time by gathering the necessary financial documents on their own time, rather than leaving it to their attorney, otherwise known as discovery work. In addition, people can save a lot on legal fees if they have all their documents ahead of time. However, the research and preparation can be difficult if the client does not know what documents they need, as well as where to find them.

Here are five simple ways to organize your finances before you start your divorce process.

  1. Create a new budget: With your regular income undergoing a dramatic change, you should go over your finances and be certain that you can manage your monthly and yearly finances. Also, it is now going to be important that you identify what your new parameters are in terms of spending, and it becomes vital that you have emergency funds stored for a rainy day. Costs for lawyers and other miscellaneous expenses can stack up in a hurry as well. And finally, don’t forget about any savings you have for retirement in whatever financial plans you draft.
  2. Close any joint accounts you have with your soon to be ex-spouse: Now that the relationship is over, you should make sure any shared accounts, credit cards, and overall any bank accounts are not only closed, but also paid off, or at the very least put under one of the spouses names. A helpful tool is to use your credit score, which many websites offer to obtain for free, to ensure you didn’t miss any accounts. This is important because sometimes a former spouse will take advantage of this, and make payments knowing it will negatively effect your credit score. Cover all your bases.
  3. Open new accounts under your name: Now that you have taken care of any joint accounts you may have previously had, you should create a credit account and open bank accounts that are all your own. It is also wise to NOT use the same bank where your joint accounts had been in.
  4. Calculate your net worth, complete a “Net Worth Statement”: Write down all the personal property and funds that you and your former partner accumulated during the marriage. Make an approximation of what it is worth. If you currently own a home, contact a real-estate agent so they can give you an idea of its current value on the market. As you are doing all this, it can alleviate some of the stress that you face during a divorce if you jot down some of the property that you feel you truly need to have. However, you cannot expect to get everything you once owned, so choose wisely.
  5. Make sure you have insurance: Now that you and your spouse are no longer going to be together, you need to make sure you are covered by multiple aspects of insurance. It is imperative that you and your children have enough of all types of insurance to be protected and taken care of. Your ex-spouse may not be so inclined to help you with this, so you must take it upon yourself to make sure you are covered.

 

 

 

What Happens If One Parent Fails To Pay Child Support?

Monday, November 2nd, 2015

When one parent is awarded child support in any divorce proceeding, it acts just like any other order delivered by the court, and is enforceable with an order of contempt action. Typically, if the non-custodial parent does not comply with the child support order, the custodial parent will seek an order of contempt, which is defined as a willful failure to obey an order of the court.

Usually, the party that is seeking a contempt order will include the threat of serving a jail sentence for the non-paying, non-custodial parent. In actuality, the real purpose of seeking a contempt order is to guarantee that the non-custodial parent complies with the child support order. Clearly, however, there are very real and serious consequences for not complying. Although jail time is a possibility, this is usually a last recourse of action for a judge.

A contempt order such as this is not primarily intended to punish wrongdoers, and is instead supposed to remedy the situation through civil litigation. Because of this, it is common for the custodial parent to make a demand for discovery, as doing so could very well reveal if the non-custodial parent has the resources required to not only cover their life, but their child support obligation as well. In many cases, following a discovery that reveals the offender cannot make their payments, a court may find that there is an inability to pay, and therefore will not be held in contempt.

If this is the situation, then the court may look to a third party, like parents of the non-custodial party, as a source from which to appropriate necessary funds. Bank accounts, retirement accounts and other assets may also be liquidated by order of the court in order to make payments.

If, at the end of the day, the court finds that the non-custodial parent is not making payments purely because of financial hardships, then the court will provide payment for the missing child support.