Archive for the ‘Dividing Assets’ Category

How do I Prepare for the Financial Part of the Trial?

Tuesday, March 16th, 2010

Once all of your documents are in order, the financial issues which are still in dispute should be fairly obvious. You can work with your attorney to organize the documents according to the issues which they represent.  If you are not represented by an attorney, you will organize the documents yourself.

For example, if you are claiming your spouse hid money in an account, likely documents which would support that claim would be the bank or stock account records which reflect the money, deposit slips showing deposits into those accounts, pay stubs which show automatic deductions to that account, and perhaps loan documents which show that account as an asset. Those different documents together prove the same point.

Each of the points which you intend to cover should be organized in terms of importance. The most important points should be covered early in the trial. The presentation will also need to make sense chronologically. If you jump around too much in time, the court is likely to get confused.

Make an outline, or assist your attorney in making an outline, of the points that you intend to make in the trial.  You will not be permitted to read directly from your outline during the trial, but the act of outlining what you plan to cover increases the likelihood that you will cover all of the crucial points. You may refer to your notes or documents during your testimony with permission of the court, but keep in mind that opposing counsel may also look at any document you use to refresh your memory during the trial. Click here for some terrific information on the financial aspect of divorce.

Also make an outline of what you anticipate your spouse’s case against you will cover.  Be prepared to answer questions about those issues.  For example, if your spouse has repeatedly accused you of over spending, assume that this will be one of his or her arguments in the case, and be prepared to justify your expenditures. Click here  for an article on some of the caveats of mismanaging money within a marriage.

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.

  • Share/Bookmark

Tags: , ,
Posted in Cost of Divorce, Dividing Assets, Divorce Preparation, Divorce Settlement, Hidden Assets, Litigation, Property Division | Comments Off

Dissipating Assets

Tuesday, September 8th, 2009

With respect to stocks, bonds, mutual funds and other related cash assets, refrain from spending until after the divorce. If you suspect that your spouse may dissipate assets, write a letter to your broker, bank or financial institution immediately informing them of your impending divorce, and that you will not authorize withdrawals on any accounts without both signatures verified against the original signature cards at the institution. Once you’ve initiated the divorce, seek a court order freezing the assets in all of your accounts except for day-to-day living expenses. In some states, like Connecticut, these orders are automatic upon the filing of the divorce.

 

You are under the court’s microscope with respect to dissipating assets. If you need to use any of your savings to pay bills, make sure there is not a court order already in place prohibiting you from doing so. If there is, and you need to use some of the frozen monies, you must first obtain the Court’s permission. If you are permitted to use your assets to pay ordinary and necessary living expenses, keep records of how the money was spent, as well as a record of why the living expenses were ordinary and necessary. If the judge perceives you as dissipating assets, you may have a real problem at subsequent court proceedings or a trial. For a good article on dissipation of assets, see http://www.divorcedex.com/divorce/Dissipation-of-Assets-321.shtml.

 

Don’t plan on being tricky by closing accounts and then diverting the money to an untraceable account. All a judge needs to see is a bank statement with, say, $5000 two days before you filed divorce papers, and then a $5000 withdrawal two months after, with no disclosure concerning the whereabouts of the money, to determine that you’re a money-hider. If a judge believes you’ve hidden even a small amount of money, the next question will be “how credible are the rest of this person’s representations?”

 

Because you are under a microscope during your divorce, keeping a paper trail of how you spend your money is important. Keep a notebook in which you record all major financial transactions, including receipt or payment of child support, medical bills for the children, any savings that you utilize or any accounts that you cash out, bank statements, credit card statements, and so forth. You aren’t necessarily going to need these records, but if you do need them, you aren’t going to want to have to dig around the bottom of a shoe box or call MasterCard in order to find them. You can always throw the paper trail away later if you do not need it. Another terrific article on dissipated marital assets appears at http://www.womansdivorce.com/dissipated-marital-assets.html.

 

 

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

 

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.

  • Share/Bookmark

Tags: , ,
Posted in Dividing Assets | Comments Off

How do We Use Our Assets for Mutual Benefit?

Thursday, September 3rd, 2009

In a divorce situation, many people feel that their spouse will receive monies in the settlement which will be used inappropriately by that spouse. A common refrain is “he’ll just use the money on his new girlfriend, and forget all about our children” or “she is terrible with money and will waste it.”  Sometimes sentiments reflect a concern that parents who once used money for a common goal may lose sight of that goal, such as saving money for a child’s college expenses. Avoid some common costly mistakes of divorce outlined in an article in MSN Money, http://articles.moneycentral.msn.com/CollegeAndFamily/SuddenlySingle/Divorcing15CostlyMistakes.aspxA constructive way to control your money in a divorce is to use that money to advance a common goal.

 

You may be thinking that you and your spouse no longer have common goals, but you’d be surprised at what you may be able to agree upon. One use for savings that you’re afraid your spouse will spend frivolously after the divorce is to pay off joint credit card debt. The spouse with the highest income takes the largest chance that he or she will get stuck with the lion’s share of the credit card bills, so this is a good strategy for that person to advance. Presumably, a judge will divide savings which accumulated during the marriage equally (at least somewhat equally) between the two of you. Negotiate for those savings to go toward a credit card bill for which you owe money (or upon which your signature appears as an obligor), and you’ve reduced your after-divorce expenses (no more credit card payments). You’ve also restricted the amount of money your spouse has to spend on items you don’t believe are important. Your spouse may even agree to pay off the credit card debt. This benefits both spouses unless the credit card you’re paying off includes presents and vacation expenditures for your current single life or love interest, or was clearly only used for your benefit as opposed to your family’s benefit.

 

Another use for creating a mutual goal is to set up trust accounts for your children’s college expenses, or a first car. Each party can be required to contribute a certain amount of assets or income into a fund which will be jointly administered. Neither party can take money out of the account without the agreement of the other. Expenses to be paid from the account are agreed upon in advance, such as “tuition, room, board and books”, or “an automobile at age 18 costing not more than $10,000″ or “travel expenses for a trip abroad after high school graduation, not to exceed $3500″. For a good article on handling child rearing expenses after divorce, see http://www.womansdivorce.com/child-rearing-expenses.html.

 

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

 

For more information contact Peace Talks www.peace-talks.com 

(C) 2008  Peace Talks Mediation Services, Inc.

 

 

 

  • Share/Bookmark

Tags: , ,
Posted in Dividing Assets | Comments Off

Cash, Stocks and Other Assets in a Divorce

Tuesday, September 1st, 2009

Also consider tax ramifications. When cash assets such as stocks gain in value, that added value becomes taxable as capital gains. The tax becomes due in the year that you sell the asset. If you bought IBM stock at $25 per share, and now it’s worth $75 per share, the taxable gain is $50. At a 33% federal tax rate, that is a tax of $16.50, so your $75 stock is really worth $58.50. Tax ramifications make a great impact on the true value of an asset, and should influence your choices. Contact an accountant if your lawyer cannot answer your tax questions. You may want to speak with a divorce financial planner, see https://www.institutedfa.com/ReferralSearchPage.aspx.

Cash in the checking or savings account, CDs in the bank, stocks, bonds, and mutual funds, 401k contributions and pension funds are subject to scrutiny and possible division by the court. Consider how you hope to use these assets in the future before deciding how and when they are divided. If you need to put a security deposit down on an apartment, you’ll want to have access to this money quickly. If you are saving for retirement, you won’t need the money now, and it would be desirable to invest it. Your goals should dictate how important issues such as liquidity, immediate and long-term tax ramifications, and the safety of certain investments are to you.

Liquidity

When you are dividing up stocks, bonds and cash assets, keep in mind that some investments are more liquid than others. Some may be available more easily than others in the event of an emergency. Your house and pension may be the least liquid of all of your assets. Be sure that you understand the ramifications of your choices for the mix of assets you are dividing, in terms of their liquidity.

 

 

Do Not Make Knee Jerk Decisions

Emotions can take over decision making during the upset of a divorce. Don’t squander assets or make foolish investment decisions during this critical period. Preserve your money so that the courts can help you and your spouse divide your assets appropriately. You can spend the rest of your life determining how best to invest your money, and what purchases to make.

Now is not the time to make big monetary decisions about how you want to live your life after the divorce. Too many clients exclaim, “well, if my spouse gets the house, then I want a house that’s just as nice, and just as big.”  That same client immediately buys a house which is just as nice and just as big, using every available dollar to do so, taking on a huge mortgage. What if your feelings change a few months after the divorce is over, you decide to pursue a job in another state, or meet someone new who already owns a house?   No matter what you’re thinking about where and how you want to live after the divorce, those thoughts and feelings will likely change over time. Read up on the effects of divorce in the years to come in one of the many excellent books on the topic, see  http://www.peace-talks.com/books.php.

Excerpted from Your Divorce Advisor: A Lawyer and a Psychologist Guide You Through the Legal and Emotional Landscape of Divorce (Simon & Schuster/Fireside 2001). For more information: http://www.yourdivorceadvisor.com/.

 For more information contact Peace Talks www.peace-talks.com 
(C) 2008  Peace Talks Mediation Services, Inc.

  • Share/Bookmark

Tags: ,
Posted in Dividing Assets | Comments Off

Bad Behavior has blocked 219 access attempts in the last 7 days.