Mediation Blog » Divorce Basics

Personal Property in all Jurisdictions

admin — Thu, 27 Aug 2009 12:00:10 +0000

The courts are reluctant to get involved in dividing up personal property, so if you and your spouse can do it yourselves, that is the best way to proceed. By the time you’ve argued in court about a two year old TV set and a sofa with a spot on it, you will have spent enough in lawyers’ fees to purchase both items new. Sit down with the list of your personal property and sort out the obvious items that one spouse or the other will want. The antique that came from your mother’s family home should go back to you, and his favorite recliner should go to him. Narrow your list to those items which are actually in dispute.

Once you have determined which items are in dispute, make a list of them. From here, there are several ways to proceed. One frequently used method is to flip a coin, and the winner gets to pick the first item, the loser gets to pick the second item, the winner gets to pick the third item, and so forth.

Another possibility is to assign a dollar value to the property and have an “auction”. The spouse who wants certain pieces of property the most will be willing to pay the other spouse more for them than the spouse to whom the property is less important.

The Court will be reluctant to award one spouse money in exchange for giving the other spouse most of the personal property. Despite your sentimental attachment to your furniture and personal items, unless they are antiques, oriental rugs, or paintings by famous artists, most of your items have more value to you personally than they would to someone else. A judge will be unlikely to place values on the items, and award one spouse or the other the commensurate cash value for the items.

The message is to negotiate with your spouse for any personal property that you want, and don’t expect to be paid for what you give up. Take what you feel you deserve, but don’t expect any cash in lieu of property given up unless you both agree. For a good article on dividing property without a fight, see http://www.divorcehelp.com/rr/rr09.html.

If you cannot agree upon a fair way to divide up the items in dispute, at least you have narrowed the list, hopefully to a manageable length, for your lawyer to deal with in negotiations, or for the judge to divide at the time of the trial. For more tips on divvying up everything from family silver to DVDs, see http://www.firstwivesworld.com/resources/resource-articles/divvying-everything-family-silver-dvds-during-divorce.

Emotions run high for certain possessions, and spouses sometimes use these hot buttons as an opportunity to retaliate against the other person. A good benchmark is “will this matter in 5 years?” If it will not matter, then be prepared to give it up now.

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

Community Property States

admin — Fri, 21 Aug 2009 12:00:50 +0000

The remaining nine states are Community Property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. This means that, with a few exceptions, only property which was accumulated during the marriage will be divided, and that property will be divided 50/50, asset by asset, whenever possible. Wages, income and bonuses are community property, as is credit obtained during the marriage. Therefore, homemakers are not penalized by not working outside the home, and claims of “I earned all of the money, so all of the property is mine!” aren’t considered by the court. Property which accumulated to either of you prior to the marriage, or during the marriage through a gift or inheritance, or by virtue of appreciation or rents from other pre-marital property is considered “separate property” and is not subject to division by the court (again, with some exceptions).

In Community Property states, the main exceptions are:

when one spouse receives a community property-funded education, the community property used to fund that education will be reimbursed for the educational expenses, unless both spouses received a community property funded-education, more than 10 years has passed since the education was completed, or the marital community has benefitted in some other way. Any educational loans taken out for educational expenses are the responsibility of the person who received the education.
when liabilities exceed assets.
when one spouse has misappropriated family assets. Oddly enough, this does not include excessive gambling debts, as all debts incurred during the marriage are considered marital debts, irrespective of whether one spouse had the permission of the other spouse to incur the debt.
lawsuit liabilities for injuries. For lawsuit liabilities, who has to pay depends on whether the accident happened in the course of “marital business”. For example, if you are involved in an accident while driving to the store to buy groceries, then the liability is paid from community assets. If you get in an accident while on your way to meet a friend for a social outing, the liability is paid from your separate property.

For people with children and a family home, the family home may be awarded to the custodial spouse, and the other spouse may receive other assets to compensate for giving up an interest in the home.

Businesses started prior to the marriage present a special problem. The division depends upon whether any increase in the business value is due to the nature of the business, or the businessperson’s special efforts. If the business has increased in value because of the nature of the business, then the business is generally separate property. The leading case in this area of law is VanCamp, pertaining to the divorce of the VanCamps of pork & beans fame. Their business value increased drastically during World War II just because of the nature of the business, i.e., canned food during wartime. Such a business was maintained as separate property.

For a host of free divorce information, see http://www.peace-talks.com/resources.php. A list of other resources is available at http://www.peace-talks.com/divorceinformation.php.

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

Distributing Property in an Equitable Division State

admin — Tue, 18 Aug 2009 12:00:08 +0000

If you had substantial property prior to your marriage, or you inherited substantial property during the marriage, you may be able to preserve this property as your own, separate property even in an equitable jurisdiction state. Be prepared to prove ownership and how you acquired the property, and be sure to give this information to your attorney early in your case.

The following is a checklist of facts and factors for distributing property in an equitable division state:

age
health
education
ability to earn income in the future
ability to accumulate assets in the future
special needs of children
parenting needs of children
contribution to assets
separate property
inheritances, gifts, and family loans
appreciation of joint and sole assets over time
liquidity of funds
tax ramifications
pre-marital contributions
non-monetary contributions

The better prepared you are, the more likely you are to feel that your settlement is fair. For a list off good books on the divorce process, see http://www.peace-talks.com/books.php. Also, be sure to see the Peace Talks resource center at http://www.peace-talks.com/resources.php.

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

Other Factors Influencing Property Division

admin — Wed, 12 Aug 2009 12:00:40 +0000

Other factors that can influence property division are how long you have been married, how old each of you are, what your health is like, what your educational backgrounds are, your prospects for future income, whether or not the judge thinks that the spouse ordered to pay child support and spousal maintenance will actually pay the orders, and a variety of other factors. Inheritances and money that each spouse contributed to the marriage are often important as well. Be sure to bring these matters up with your lawyer and discuss what they mean in your particular case, given your state’s laws. While each case is decided individually by the court, your lawyer can give you an idea of how judges in your state would consider each factor, and how that would translate into property distribution in your case.

Courts recognize non-monetary contributions to families just as they do monetary contributions. Housewives, stay-at-home moms, stay-at-home dads, and spouses who contributed to the family in non-monetary ways are recognized along with spouses who contributed to the home with salary, inheritance, or savings.

Don’t expect the court to do a dollar-for-dollar accounting of all money earned and spent by each spouse.

Most courts will assume that while you and your spouse were married, you made certain decisions together in the best interests of your family as a whole. The Court will not second guess those decisions by punishing one spouse for not working, or for not earning as much, unless those are material issues in your case. For example, if the reason your spouse didn’t work is because he or she had a drug problem, the Court will likely consider that unfavorably toward your spouse in the property settlement. If your spouse didn’t work because he or she stayed home with the children while you advanced your career, the Court will view that spouse as an equal contributor to your family assets, even though his or her contribution was not monetary. It is not the Court’s purpose to unravel every financial transaction during your entire marriage to decide who contributed exactly how much money, who purchased which item of furniture, and who worked the most hours, thereby creating a disparity in earnings. It may be helpful for you to work with a divorce financial planner. To find one near you, see https://www.institutedfa.com/ReferralSearchPage.aspx. See the financial section on the Peace Talks website at http://www.peace-talks.com/finformation.php.

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

More Alimony Considerations

admin — Fri, 07 Aug 2009 12:00:52 +0000

Someone in the 28% federal tax bracket, every $100 in alimony paid “costs” only $72 because of the tax savings. If the recipient is in the 15% tax bracket, each $100 received means only $85 is truly realized because of the taxes owed. As you can see, there’s a gap of $13 which is the IRS’s way of helping divorcing couples make ends meet. By utilizing alimony effectively, the couple saves $13 in taxes for every $100. Many state tax laws also provide for alimony deductions on top of the federal deductions. If your and your spouse’s incomes are unequal alimony may help you both save money, so explore the tax ramifications of an alimony order, both individually and as a couple. Alimony can help keep money in your collective pockets rather than in the hands of the IRS. As much as spouses dislike giving alimony to each other, giving it to the IRS is even less popular!

If you have children, and paying alimony in addition to child support is a possibility, the IRS has another vehicle by which you may take advantage of tax provisions called “Unallocated Alimony and Support,” which is a special combination of alimony and child support — all of which is deductible by the paying spouse and taxable as income to the receiving spouse. If your incomes are very disparate; for example, if one of you stays home with the children and does not earn an income, then this option may make most sense for you.

Courts have also modernized alimony in creating “rehabilitative alimony” or limited term alimony. Rather than have alimony continue for the rest of one’s life, as was typical 20 years ago, courts nowadays are considering orders which last for a specific period of time and then terminate. For example, in the case of a woman who has taken time off from her career as a teacher to raise 2 children, now ages 3 and 5, the court might award alimony for four years. During that 4 year time period, the woman has an opportunity to renew her teaching license, look for a job, and establish the children in school. By the time the 4 years pass, she should be in a much better position to support herself, without further need for alimony. Without a reasonable reprieve (in this example, 4 years), she may be unable to find a job immediately because her teaching license or education is out of date, she might be unable to find reasonably priced daycare for the children, and the children would be forced to adapt to a sudden change of living circumstances. Even a few years of modest alimony helps this situation immensely.

On the other hand, there are also traditional cases in which women who have made their lives as housewives find themselves 30 years later without a pension, 401K, or even a job. Many of these women married in college, or before college, and never finished their education. Some have never worked outside of the home, and find themselves for the first time without financial support. Because of their family work and skills, their husbands were able to further their careers without having to worry about keeping house or daily arrangements for the children. At age 55, finding a first job is extremely difficult. Alimony in this type of a scenario is more likely to be ordered for an indefinite period. For some terrific resources on divorce and money, see http://financialplan.about.com/od/divorceandmoney/Divorce_and_Money.htm. Also see the Peace Talks website’s financial information at http://www.peace-talks.com/finformation.php.

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

A Few Other Considerations for Alimony

admin — Tue, 04 Aug 2009 12:00:44 +0000

For most divorcing spouses in states which recognize alimony awards, alimony is a hot emotional issue. In a typical scenario, the husband pays the wife alimony. The longer the marriage, the more likely alimony will be awarded. For the husband, it is difficult to stomach paying alimony when you feel that you earned most of the money anyway. While you may feel that she never did much to help you at the office or with the children, she feels that she was your “right arm”. As the wife, you may feel that you deserve all that he is worth and could be worth someday, since you supported the family during his education, early career, or even while he amassed his profits. You feel he couldn’t have reached his current status without you, while he insists that you undermined him at every turn and did precious little to further his achievements.

Anyone who is required to pay alimony after his or her spouse decided unilaterally that he/she wanted a divorce tends to feel doubly hurt by the system. It is painful to pay someone a substantial part of your income while you are in the throes of divorce and related conflicts, and you’d prefer to spend your money on your children, new partner, or yourself. Almost all partners feel that they are the generous spouse, and their partner is being unreasonable during the divorce process. Therefore, the subject of alimony adds salt in wounds that are already searing. It helps to remember during this time that alimony is a potentially versatile and cost-effective way to help settle your case. Often clients say, “I don’t want to pay a dime of alimony!” only to realize later that the “dime of alimony” is actually the cheapest, most sensible alternative. It is one method of equalizing assets over time; it is not the only way, and if it can be thought about calmly and with creativity it can be a useful tool for a successful divorce. For more divorce financial information, see http://www.peace-talks.com/finformation.php.

For example, many people do not realize is that, for tax purposes, alimony is deductible for the person who pays the alimony, and included in income for the person who receives alimony. You must consider the tax ramifications of an alimony order before deciding whether it makes sense for you. An alimony order can save a couple a great deal of money. In other cases, what you hope to gain, given the tax ramifications, is not worth the fight to get it. For some terrific information on divorce financial planning, see

http://www.divorcesource.com/info/financialplanning/financialplanning.shtml.

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

Alimony

admin — Thu, 30 Jul 2009 12:00:28 +0000

Alimony, or spousal maintenance as it’s known in some states, is a legal mechanism by which the court acknowledges that two people make up a marriage partnership, and that the earning power of the two people is rarely equal. Sometimes one of those people sacrificed a career, education, or job track in order to fulfill an unpaid role in that partnership. In some cases, an injury or illness contributed to the lesser earning capacity of one of the two partners.

Alimony is not available in every state, with Texas being the forerunner in abolishing alimony. All states reserve the right to make asset divisions based (at least in part) on the earning capacity and future prospects of the spouses. Even if a state doesn’t allow alimony, it may allow other provisions in order to even out the spouses’ financial positions, i.e. no alimony but a larger share of the equity in the house or cash savings. For a good article highlighting frequently asked questions about alimony, see http://www.divorcesupport.com/divorce/Spousal-Support-1423.html.

Both men and women are entitled to alimony in those states which permit alimony awards. Alimony awards are not gender based, but rather, follow broad categories:

age
health, both mental and physical
education
income
future prospects for income and employment
separate property which may be used for support
the desirability of a parent not working for a length of time (e.g., when children are young)
length of the marriage
reasons for the breakdown of the marriage
contributions to the household, both monetary and non-monetary

Alimony is considered to be an income substitute. You need not have children to be entitled to alimony. It is determined based on both spouses’ incomes, the factors listed above, and a determination of the relative importance of each of the factors for each case. It’s therefore impossible to predict how much alimony may be awarded in a given case. Some jurisdictions have a rule of thumb, and experienced lawyers can give you an estimate of the amount you might receive. But unlike child support, which is determined by law, alimony is completely negotiable. Alimony typically ends upon the death of either the payor or the recipient, but all other details are subject to your own design. Some (mix and match) provisions which can be included:

alimony terminates upon the remarriage of the recipient
alimony terminates upon the cohabitation of the recipient with another adult under circumstances which are tantamount to remarriage, but without the ceremony
alimony terminates after a specific number of months or years
alimony is for a decreasing amount each year (subject to some tax rules), i.e., $15,000 the first year, $10,000 the second year, $5,000 the third year, and terminates after year three
alimony is not awarded at the time of the divorce but is an issue kept open for modification later if circumstances change
alimony is modifiable in the event of a substantial change in circumstances, or modifiable only under certain, pre-defined circumstances, such as a physical disability
alimony is not modifiable by either party for any reason
alimony is not modifiable unless either party’s income changes by a certain amount or percentage; e.g., to encourage a non-working spouse to begin working, alimony might be modifiable only if that spouse’s gross income exceeds $20,000 a year

Alimony thus can be tailored to fit many situations. In some cases, it may never terminate; in others, triggering events can be specified which will mark a termination. Think about what you want to accomplish through alimony, and then negotiate to tailor your plan to fit those needs. For a host of information on spousal alimony you may find helpful, see http://www.womansdivorce.com/spousal-alimony.html.

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

Staying Together While Separated

admin — Fri, 24 Jul 2009 12:00:32 +0000

There are psychological and practical advantages and disadvantages to staying in the same house. The advantages include saving money, having time to organize your lives for an easier separation, having time to talk to your children, and providing support to each other on a daily basis. This way of living requires a friendly situation at best, or one in which tensions are squelched for your own or your children’s benefit. If your situation is not civil, however, it is complicated and painful to face each other every day and manage the ’good face’ that such arrangements require. Staying in a tension-filled living situation can exacerbate stress and magnify the ways in which spouses annoy and frustrate each other. For some tips on getting through living together during your separation and divorce, see http://get-divorce-advice.com/separated-but-living-together-how-to-get-through-it/.

Certain situations support separating sooner rather than later. If your spouse is continuously putting you down, berating you, abusing you, or manipulating you into being frightened, meek, or withdrawn from family and friends, then staying in the house is likely to have negative consequences for your children and for you. If your spouse is involved in illegal activities, or is self-destructive, such as a compulsive gambler or cheat, then staying can only have negative consequences unless you both get professional help. If your spouse has a disabling mental illness that causes him or her to act erratically in ways that could put you or your children in danger, that is a painful but potentially necessary reason for leaving. Finally, if your spouse is hurting your children in any way, then leaving immediately must be seriously considered.

Separating might be a temporary solution. Sometimes just taking this action breaks old patterns like taking each other for granted. It introduces fear, and provides an opportunity to experience what life will be like without each other. Is it relieving, barely noticed, or does it compel you to re-think all of your reasons for leaving? If you separate, you must stick with it long enough to pass through the immediate aftermath — the loneliness, demands, threats, promises for change, and bouts of intimacy that wreak havoc in the early separation period.

Ellen and Harry lived in the same home during their divorce process. Harry set up a bedroom in the basement, and the children moved freely between the two floors on which their parents lived. They each planned to stay out of the home on alternating evenings, so that they did not interact except when the children were asleep. Despite this plan, mounting tensions during the legal process were taking their toll, especially on Harry. He felt he did not have a real home, and that the children did not respect his being ’banished’ to the basement. Harry reported feeling depressed and anxious, to the point that he was not managing himself successfully in the workplace. He wondered if the money he was saving was worth it, and whether being with his children in this way ultimately undermined his relationship with them. For more legal separation tips, see http://www.womansdivorce.com/separation-advice.html.

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

Mandatory Waiting Period

admin — Wed, 22 Jul 2009 12:00:37 +0000

One of the most confusing and least understood parts of the legal process is the mandatory waiting period: what needs to happen, and what is the timing?

Most states specify a waiting period of between 3 and 12 months from the time you file the papers until your divorce can be finalized. For a list of the waiting periods, see http://www.totaldivorce.com/process/requirements/waiting-period.aspx. During this waiting period your lawyer will be pursuing financial discovery that is, assembling all of the financial documents that are relevant to your case (in addition to the documents you’ve already provided). Your lawyer should also be helping you to formulate a settlement proposal for resolving your case. By understanding the settlement process, you can help to guide your case to a successful ending.

Staying In or Leaving the House

Legally, many states permit couples to live together during their divorce. Other states, like New York, require a physical separation of a specific duration (New York is one year, most other states are 3 months to a year) before a divorce can be granted. All states permit separation during the divorce process. The question is whether a physical separation at this time makes sense for your family. Consider:

Your finances: will you be able to support two households right away?
The stability of your children: where will they live, and how will they get to see each parent?
Can you agree on who stays in the marital residence, or will this decision require court intervention?
Is there a potential for domestic violence, especially now that tensions are escalated?
Will both of you have adequate transportation and furnishings; e.g., are you sharing an automobile?

The most frequently asked legal question is: Is there a legal advantage to separating or staying in the same household? The answer to this question varies widely across jurisdictions and lawyers. Many lawyers subscribe to the old adage of “possession is 9/10ths of the law” and instruct their clients that if they hope to live in the house after the divorce is finalized, they should not move out of the house during the divorce. Similarly, if the client wishes to live with the children, the client should not move out without them. Even though orders made during the time the divorce case is pending are supposedly “without prejudice”, meaning that the court has the authority to change any orders at any time, the lawyers who subscribe to the “possession is 9/10ths of the law” school of thought believe otherwise. While no statistics are available to support or refute this theory, imagine such a scenario as presented to a judge: if the arrangement has stabilized the children and seems to be working, why risk a change? For a good article about some of the parenting challenges present during the separation period, see http://www.drheller.com/parenting_challenges.html.

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

Serving Your Spouse Divorce Papers

admin — Mon, 20 Jul 2009 12:00:10 +0000

In order for the service of process to run smoothly, the sheriff needs to know how, when, and where to find your spouse. The more information you can give your lawyer and the sheriff about where to find your spouse, and the best time to find him or her, the easier it will be for the lawyer to get the papers served, thereby expediting your case and saving you money. The appendix contains a Sheriff Information Sheet which you may use as a guide for information to give the sheriff.

Give the sheriff a written schedule of where your spouse can be found. Include his or her home address and telephone number, and the days of the week and times he or she is ordinarily available. If you want the sheriff to serve your spouse at work, list his or her work address and telephone number as well as hours and days worked. If your spouse can be violent, or carries a gun, the sheriff needs to know that. If you suspect that your spouse will attempt to avoid service, the sheriff needs to know that too. If you don’t want the papers served during certain hours when the children are home, be specific in your instructions. If you need to be notified before service so that you can make sure you’re in a safe place when it happens, also let the sheriff know.

The sheriff will need a description of your spouse’s appearance: height, weight, hair color, race, whether your spouse has facial hair or wears glasses. Attach a photograph to the written description. The color, make and model of your spouse’s car is also helpful information, as is the license plate number.

Under certain circumstances, the sheriff may be able to simply leave the papers at your spouse’s house, as opposed to handing the papers to your spouse personally. Each trip that the sheriff makes costs you money, so make it as easy as possible for the sheriff to successfully serve your spouse. This can be a stressful time. Make sure you have all the information you need. Visit the Peace Talks resource center at http://www.peace-talks.com/resources.php. For another good article on being served with a divorce summons, see http://www.gitlin.com/pages/questions/qa_servedwithasummons.html.

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