Lawyer Central Legal Blog - Divorce

Divorce Advice: Assets and Property Division (Part 4 of 4)

Fri, 28 Nov 2008 22:10:00 -0500

When a couple is divorcing, dealing with the issue of dividing up assets and property can be a difficult and stressful process. Property division can occur in one of two ways. Often, a couple that is divorcing will decide how to divide their property and assets themselves (perhaps with the help of a mediator). If the individuals are unable to reach an agreement, the matter will go to trial. A judge will consider all of the evidence presented and will use state law to divide the property. There are two legal theories that govern how marital property is divided: community property and equitable distribution. In a few states, all property of a married person is classified as either community property (owned equally by both spouses) or the separate property of one spouse. In the event of a divorce, community property is generally divided equally between the spouses, while each spouse keeps his or her separate property. However, a majority of states use the law of equitable distribution, under which all assets and earnings acquired during marriage are equitably divided. In equitable distribution states, the court determines a fair and reasonable distribution that may be more than or less than 50% of any asset to either party. Tip #1: Take this process very seriously, as most property division agreements are final. It can be very difficult to get out of or change a property division arrangement to which both parties have agreed or a court has ordered. In most states, there is an established period of time after a court enters its decision on property division during which one of the parties can request that the court to reconsider its decision, but these requests are often denied. In general, a judge will reevaluate a property division arrangement only if one spouse engaged in fraud, hid assets, or some substantial mistake was made. If your case involves neither fraud nor mistake but you still want to challenge the court's division of property, your only option is to file an appeal, which can be very costly. Tip #2: Beware of hidden assets. There are a number of ways in which a spouse may hide, undervalue, or disguise assets. Some of the most common ways that assets are hidden include income that is unreported on tax returns and financial statements, custodial accounts set up in the name of a child, cash in the form of travelers' checks, retirement accounts, and collusion with an employer to delay bonuses, stock options, or raises until after the property division has been finalized. It can be very difficult to find these items and get the proof needed to show the court that they exist. Litigation may provide helpful formal discovery procedures, such as depositions. Hiring a forensic accountant or a private investigator are additional steps that can be taken to uncover hidden assets. Tip #3: Be forthright and honest when it comes to your own assets, and make sure you list them all on your case information statement. "It's important to list all your assets. Just because you think your spouse may not be entitled to an asset is not a reason not to list it because when you sign the case information statement, you certify that everything is true. If there is a trial, it can be used in cross examination... To deliberately leave something out is probably one of the biggest mistakes that you can make," explains New Jersey divorce lawyer Bonny Reiss. "If you think your spouse isn't entitled to share in an asset, there's a place to say why, at least in a word or two, but make sure you list the asset," Reiss adds. Divorce cases involve many different types of issues, including preparing for your divorce, child custody and visitation, child support, and alimony all of which have been addressed in this series. For more divorce advice, refer back to Parts 1, 2, and 3 of this series:
Part 1: Divorce Advice: Preparing for Your Divorce
Part 2: Divorce Advice: Child Custody and Child Visitation
Part 3: Divorce Advice: Child Support and Alimony

Divorce Advice: Child Support and Alimony (Part 3 of 4)

Sat, 22 Nov 2008 18:45:00 -0500

Alimony and child support are important aspects of a divorce case and involve ensuring the financial stability of both spouses and the children. Alimony is designed to limit the unfair economic effects of a divorce by providing continuing income to the non-wage-earning or lower-wage-earning spouse. A court sets the amount of alimony it concludes is fair and reasonable to be paid for a period of time. The amount of alimony that must be paid is usually based on the standard of living established and expected during the marriage, the age and health of the spouses, the obligations and assets of each spouse, the length of the marriage, and a number of other factors that may vary by state. Unlike child support, which is determined according to rigid guidelines, courts have considerable discretion in determining if they will award alimony and, if they do, the amount and time period for which it lasts. Child support is the ongoing obligation for a periodic payment made directly or indirectly by a non-custodial parent to a custodial parent, caregiver or guardian, or the government, for the care and support of children of a relationship or marriage that has been terminated. Child support may be awarded in joint custody cases when there is a significant discrepancy between the parents' incomes. Exact conditions for eligibility of child support and guidelines for the calculation of child support vary from state to state, but generally take into consideration the needs of the child, the needs of the custodial parent, the paying parent's ability to pay, and the standard of living the child was accustomed to before the divorce. If alimony has been awarded, that amount is deducted from the payer's income and added to the payee's income when child support is being calculated. Tip #1: There is no formula for determining alimony. According to divorce lawyer Peter Paras, "Alimony is really more art than science and it, it results from a consideration of a variety of statutory factors. Courts and lawyers have to consider the duration of the marriage, the age of the parties, their incomes, their assets, their liabilities, their lifestyles, their health, whether or not any of their assets generate income. These are all factors that have to be considered in determining whether alimony is to be paid and, if so, whether it's going to be permanent, rehabilitative, or limited duration alimony and in what amount." Tip #2: Child support may continue after the child has reached the age of 18 under certain circumstances. Technically, the non-custodial parent's obligation continues until the child is emancipated. "Children are emancipated at different times," explains divorce lawyer Peter Paras. "Typically they're emancipated when they reach the age of 18 and have graduated from high school, but emancipation is often delayed while a child finishes a higher education, such as four years of college, trade school, or something of that nature. That's when the obligation technically ends." Child support may also be extended beyond the age of 18 if the child has special needs. If the child has been declared emancipated by a court prior to reaching the age of 18, is on active military duty, or the parents' rights and responsibilities have been terminated for any other reason, child support payments may be discontinued. Tip #3: Understand that there are different types of alimony. Limited duration alimony usually applies to cases in which the marriage is too short to justify permanent alimony. Rehabilitative alimony is designed to provide financial assistance to the more economically dependent spouse while he or she becomes more financially independent by getting job training, building up work history, or furthering education. Permanent alimony is typically paid when there is a long term marriage, but it is important to note that permanent alimony is not always permanent. Divorce attorney Peter Paras explains, "Permanent alimony is somewhat of a misnomer in that it probably would be better termed indefinite alimony. It can end or be modified if circumstances change in the future." Examples of changes in circumstances that could be grounds for the cessation of permanent alimony include the remarriage of the recipient, the death of the payer, or cohabitation of the recipient with someone of the opposite sex. Divorce cases involve many different types of issues, including preparing for your divorce, child custody and visitation, and assets and property, all of which will be addressed in this series. For more divorce advice, refer back to Parts 1 and 2 of this series and look for the upcoming final installment:
Part 1: Divorce Advice: Preparing for Your Divorce
Part 2: Divorce Advice: Child Custody and Child Visitation
Part 4: Divorce Advice: Assets and Property Division

Divorce Advice: Child Custody and Child Visitation (Part 2 of 4)

Sat, 15 Nov 2008 15:48:00 -0500

Child custody is one of the most difficult and emotionally charges aspects of a divorce. There are two primary types of custody, physical custody and legal custody. Physical custody is awarded to parent with whom the child will live a majority of the time. The custodial parent often shares legal custody of the child with the non-custodial parent. Legal custody refers to the right to make decisions about the child's education, religion, health care, and other significant concerns. Some parents settle on a joint-custody arrangement, through which the child spends approximately an equal amount of time with both parents. The following tips offer advice about child custody and child visitation, so that you and your soon to be ex-spouse can handle these difficult issues with the least amount of emotional strain on yourselves and your children as possible. Tip #1: Focus on your child's or children's best interests. This may sound overly simple, but divorce lawyer Peter Paras stresses, "In dealing with the issue of custody, it is important to know that it is the children's best interests that are the central focus of the court's concern." Divorce attorney Bonny Reis agrees, stating, "One of the most important [elements of] good parenting is the ability of a parent to subordinate his or her needs to the needs of the child. Once people begin to understand that and stop seeing the child's needs through the lens of their own feelings, they become much better parents and much better candidates for custody." It is essential to keep your negativity toward your former spouse from damaging your child's relationship with him or her, as well as your child's perceptions of him or her. When it comes to deciding custody arrangements, courts tend to look favorably on parents who are respectful and cooperative during the divorce proceedings. Tip #2: There are two ways to resolve the issue of child custody. First, the parents can reach a compromise, thereby recognizing that the children are entitled to know both of their parents and structuring the children's future in a collaborative manner. Second, in cases where extenuating circumstances make compromise extremely difficult or impossible, a judge will make the custody decision. Peter Paras, an experienced divorce lawyer, points out, "One of the most critical elements in deciding whether or not compromises can be reached or not is how well the parents can communicate and whether the parents have a recognition that the other parent has a right to have a relationship with the children and that the children have a right to have a relationship with both parents." Tip #3: Establish a fixed visitation schedule. When a court establishes visitation rights for a noncustodial parent, it usually orders reasonable visitation. In order for the reasonable visitation approach to succeed, both parents must cooperate and communicate frequently. Fixed visitation refers to the establishment of a detailed visitation schedule by the court, including the times and places for visitation with the noncustodial parent. Divorce attorney Bonny Reis favors this approach. "I feel strongly that there has to be a schedule...when you have a schedule as a default, both parents know when they can make time for themselves. To have a schedule shows that the parents respect one another and respect one another's right to go on with their lives." Another important beneficial result of fixed schedules is that they provide greater stability for the child. The child will know when to expect spending time with each of his or her parents, leading to healthier, more solid relationships and less tension between family members. Divorce case involves many different types of issues, including preparing for your divorce, child support, assets and property, and alimony, all of which will be addressed in this series. For more divorce advice, refer back to Part 1 of this series and look for the upcoming installments:
Part 1: Divorce Advice: Preparing for Your Divorce
Part 3: Divorce Advice: Child Support and Alimony
Part 4: Divorce Advice: Assets and Property Division

Divorce Advice: Preparing for Your Divorce (Part 1 of 4)

Wed, 12 Nov 2008 18:27:00 -0500

This post is the first in a series of four that offers solid practical legal advice for individuals facing the prospect of a divorce. It is important to adequately prepare yourself properly for the legal process ahead in order to avoid any further unnecessary emotional stress during this difficult time. Tip #1: Understanding the legitimate legal grounds for divorce in the view of the court is an important preliminary step in getting a divorce. The traditional grounds for divorce are known as fault grounds, and include transgressions such as adultery, extreme cruelty, desertion, alcoholism, incarceration and sexual deviance on the part of one spouse. A no-fault divorce does not assign blame to either partner, and occurs when both spouses agree that the marriage could not be repaired over time or through counseling. Be sure to research the specific laws regarding the grounds for divorce in your state in order to educate yourself on this preliminary aspect of divorce. A divorce lawyer can help you understand which legal statutes apply to your circumstances. Tip #2: If you are contemplating a divorce, you may be wondering whether you should move out of the house. Divorce lawyer Peter Paras offers this insight: "Legally, if you leave your house, you don't give up any of your rights to the house, to your children, or to anything. Sometimes leaving the house is a practical solution that makes a great deal of sense for everybody because it may help to reduce the stress and anxiety of everybody in the family, which will help to make the case go a little more smoothly." On the other hand, Paras adds, "There are other times when it would be detrimental for tactical reasons to leave the house and those would have to be explored on an individual basis." A general principle to remember when making a decision about whether or not to leave the house is that the more a couple can cooperate and compromise, the faster and smoother the whole divorce process will be. If you have children, it's important to consider their well being and emotional state as well when making this decision. Tip #3: It's important to be prepared for your initial visit with your divorce attorney. Divorce attorney Bonny Reiss suggests, "Before you see a lawyer, go through the house and take the financial records that you can find because although we're entitled to get them in discovery, sometimes that is a long and costly process. The more you can bring to your lawyer to begin with, the better off you are and the less expensive your divorce is going to be." Financial records that are especially helpful include bank account records, brokerage account records, tax returns, and Quicken records. "If someone keeps their books and pays their bills on Quicken or some program like that, it gives us in a nutshell the family's lifestyle. It saves a lot in attorney's fees and in accountant's fees, and it enables us to give the judge a picture of exactly how the family lived," Reiss explains. Bringing your divorce lawyer proof of your significant other's transgressions, such as incriminating photographs, is not very productive because the court views divorce as essentially an economic decision. As difficult as it may be, it is best to try to keep your emotions in check and focus on the practical concerns at hand. Divorce case involves many different types of issues, including child custody, child visitation, child support, assets and property, and alimony, all of which will be addressed in parts 2-4 of this series. Look for the upcoming installments of this series: Part 2: Child Custody and Child Visitation Part 3: Child Support and Alimony Part 4: Assets and Property Division

Divorce Takes the Economy Into Account

Wed, 12 Nov 2008 17:29:00 -0500

November 2, 2008 Field Notes Divorce Takes the Economy Into Account By VINCENT M. MALLOZZI From New York Times HIGH-FINANCE marriages are crumbling along with the economy, divorce lawyers say, and because of it, couples who are splitting up are paying closer attention to the timing of bonus payouts and other economic trends in the hope of achieving the best possible settlement. "A lot of couples who have been living the good life have begun the process of re-evaluating their lives together," said Jacalyn F. Barnett, a Manhattan divorce lawyer. "In the past year, I have seen how the dramatic changes in our economy have had a dramatic effect on married people, especially those who have been used to earning high salaries, and many of those couples can no longer handle the stress." Ms. Barnett noted that between Labor Day and New Year's Day, "there is always a flood of new divorces." In other words, if spring and summer are the seasons for marrying, fall and winter tend to be the high seasons for divorce. "These are the prime periods of evaluation," Ms. Barnett said. Tom W. Smith, the director of the General Social Survey at the National Opinion Research Center in Chicago, echoed Ms. Barnett's findings. "A radical shift," in the value of assets like stock portfolios or real estate, he said, can wreak havoc with divorce negotiations, which can last months or longer. "All this just changes the playing field." Debbie Nigro, a moderator of support groups brought together by First Wives World, a Web site that offers counseling and information resources to women who have gone through or are about to enter divorce proceedings, said she has been hearing tales of financial woe from both women and men whose relationships, among other investments, have hit the skids. "When you are perceived by your partner in a certain financial way, and now you can no longer continue to be that person, it flips a switch," she said, "and the relationship sours." Ms. Nigro said she had been in touch with a Wall Street executive who was divorced within the last year, ending a 17-year marriage that once seemed as solid as his investment portfolio. In the divorce settlement, the large bonuses he used to receive have come back to haunt him. "The lawyers made an arrangement based on the net earnings of this executive's career, including the average of his bonuses the past six or seven years, and added that to the alimony and child-support payments," Ms. Nigro said. "Those bonuses vary, and in these troubled times, they are not what they used to be," she said. "But he is still making payments based on a time when his bonuses were much larger. As a result, this poor guy is barely surviving financially." He is not "the only one who has been victimized by this formula," Ms. Barnett noted. "Timing is everything. The date of valuation of assets can make all the difference in the world depending upon when an action was started." She added that when the possibility of divorce looms, both spouses have to consider what assets are available and which side of the equation they fall on. "If you're a person who creates the income, and your income stream is plummeting, it might be in your best interest to get divorced after Jan. 1 so that you have it documented and it works in your favor in a settlement or litigation," she said. "Or if you're the person who is financially dependent, you may be concerned about waiting too long because the money might disappear and the lifestyle you have become accustomed to may be reduced." Mitchell Devack, a lawyer in East Meadow, N.Y., who handles divorce cases, offered a slightly different view. "From a nonearner's perspective who is looking for the best possible settlement, it's probably best to wait on the sidelines right now and hope this economy gets going again," he said. "In more stable economic times, there is no reason to believe that a spouse's salary or bonus or 401(k) or pension will change, so there is less strategy involved in terms of timing a divorce with the help of a lawyer and an accountant," Mr. Devack said. "These are the kinds of issues that only come to the forefront during hard times." Mr. Devack said he has seen a noticeable "spike in the high-earning divorce cases" in the last year. Ms. Barnett surmised that those spikes tend to occur late in the year, because "Family vacations have already been taken and bonuses have already been doled out, and now people in shaky marriages begin to ask themselves, 'Do I want to keep sailing on this lifeboat? Or is it time to bail out?' "