Michigan Divorce Handbook

MICHIGAN NO-FAULT DIVORCE

As Most people are of aware, Michigan is a no-fault state. In fact, Michigan has been a no-fault jurisdiction since 1973. Although there are arguments to ending this status of a no-fault jurisdiction, as can be recently attested to by legislation in the Michigan House and Senate, most divorce attorneys would argue that our system has been an effective system. Some have argued that the no-fault status has attributed to the rise in the number of divorces since the 1960’s. Most attorneys would argue that changing demographic and socioeconomic factors are responsible for the increase in divorces. Although the no-fault status generally means a 50/50 split in assets, there are certain factors such as fault that can be used in making a breakdown of marital assets. For instance, if it is found that one of the spouses had affairs or was extremely abusive, judges are now reluctant to award more property to the not-at-fault party. For instance, if there are assets of about $100,000, a judge, depending on the circumstances, would be likely to award anywhere from 55 – 60 % of those assets. The other factors to be looked at also involve the employability of one’s spouse.

DIVORCE REQUIREMENTS

Michigan is a no fault divorce state like 40 plus other jurisdictions. However fault can be a determining factor in how the property is divided up, along with how much alimony and child support will be paid. For example, if one of the spouses was having an affair or was abusive, that factor could be used by the judge in making a determination as to how marital property was divided or how much alimony was paid. There has to be a breakdown in the marital relationship to the extent that the objects of matrimony have been destroyed and there appears no reasonable likelihood that the marriage can be preserved. The residency requirements in Michigan are 180 days in the County 10 days prior to filing the action for divorce.

THE IMPACT OF DIVORCE ON YOUR LIFE

Divorce is a difficult time and there a significant changes that take place. For instance, you lose contact with mutual friends, and you no longer are involved with the same social groups or organizations. In fact, most persons who go through a divorce feel it is incumbent upon themselves to make a drastic change. This is not recommended. For one to be able to get through such a difficult period it is important that gradual changes are made. A complete break off of mutual friends may be recommended because such contact with those persons may remind one of the difficulties experienced throughout that marriage. It is important for divorced parents not to make too many drastic changes, especially for the sake of their children.

DIVORCE AND YOUR CHILD/REN

Many children of divorced parents are likely to react with anger and to feel a guilt complex. For example, many children will feel that they have been the cause of the divorce and as a result may feel bitterness with both parents. It is your job as a parent to indicate to your child or children that they were not responsible for the breakup of the relationship and it is especially important in the beginning of the separation that parents continue to emphasize this with their children.

Keep you children involved in many of the activities they were involved with prior to the breakup of the marriage. It is especially important to maintain continuity for the children so as to minimize the difficulty in the transition for the children.

Do not put your child or children in a position where they feel they must choose between one parent or the other. It is important as a parent that you are as level headed as possible and not to have your child placed in an uncomfortable position of determining who they favor as a parent. Children love both parents equally and do not have the mental or emotional capacity to deal with a situation such as this. This can be very hurtful and devastating to the child, not only in the short term but possibly can have long term psychological impact for the rest of their lives. Do not discuss the reasons for the shortcomings in the marriage. Although you may want to be an open parent with the children, it is important that this openness be only dealt with when the children are old enough and sophisticated enough to understand the issues. It is further recommended that you should talk about the good things that have come out of the marriage if one of your children asks you questions regarding it. By doing so you are not only a positive role model, you are also helping to nurture a positive attitude with the child or children. By constantly being negative or displaying bad feelings towards the ex spouse, or discussing things that went wrong, you are helping to nurture a very angry child who feels they must have a preference of one parent over the other. By taking a negative attitude you are hurting the child’s attitude and you could also help harbor even more bitterness then is necessary. The bottom line here is that you and your spouse are getting a divorce your children are not divorcing either one of you. So do not get your children involved in your bitter feelings about your spouse.

Your child should not be used as a pawn for disagreements that continue to exist between you and your ex- spouse. One of the most important issues confronting a parent after divorce is how they act or discuss the ex-spouse. Never use your child to deliver angry or hostile messages between you and your ex-spouse. Never use your child or children to deliver personal information about child support payments to your ex- spouse. Do not make comparison put-downs to your child regarding the ex-spouse.

It is important to remind you children that your friendships or relationships are not being used as a replacement to their parent. Tell the children they remain first and foremost in the minds of their parents. Emphasize to the child that they are not under any pressure to accept or reject your relationship.

The children should be given the maximum amount of visitation with the non-custodial parent. Just because the marriage failed does not mean your child or children is not entitled to a meaningful relationship with your ex-spouse. If anything, something good will usually come out of allowing the maximum amount of visitation. Unless there is a drug or alcohol problem or emotional and physical abuse during visitation, financial reason is not one reason to withhold visitation. For instance, if one spouse is behind in the child support payments it is not a reason to deny visitation. The parent who has the gripe with the system should petition the Friend of the Court for payments and to make the necessary arrangements to make themselves whole. It is clearly important that the child/ren not be used as pawns.

The child or children should be able to communicate freely with either parent and realize that such conversations will be kept private. Furthermore, that parent should not use those conversations to influence their behavior towards one parent or the other.

The parent should always assure their child that they will do their very best under the most difficult circumstance to make sure that child receives the best possible opportunities as if the parent were still married to the other spouse. For instance, as a parent, do not use newly found obligations with a new spouse as an excuse to deny your child/ren help. Some parents may feel that a new marriage precludes them from helping out their child/ren. That is a very poor excuse. If you deny your child opportunities because of your marriage, perhaps you should be denying yourself the full commitment and responsibility of that marriage. Although this may be a fascist point of view, your first and foremost responsibility is to an innocent child that you have brought into this world.

CUSTODY OF THE CHILDREN

Custody is truly the most litigious area in the divorce arena. Unfortunately in many situations the children are used as pawns to try to get the other spouse angry. The factors to be looked at in determining custody of the children involve the best interests of the child. If the court feels that neither spouse is acting in the best interest of the child, the court in some situations have appointed guardians to supervise and to raise that child. There are several basic issues in the area of custody. One involves the physical or residential custody, I.e. which parent will the child end up living with. There is also joint legal custody. Both parents can have joint legal custody even if one child resides exclusively with the other parent. With joint legal custody both parents make the decisions on behalf of the children concerning education, health, activities, religion, and general welfare. There are some situations that involve joint physical custody or often referred to as shared parenting. This can occur when one child resides with both parents equally and for a significant period of time. However, such a situation is generally not feasible especially when that child is of school age because most courts and psychologist deem it as necessary to create a stable learning environment.
In making custody decisions courts frown upon any parent who has abused alcohol or drugs. In such a situation, the parent who has abused drugs or alcohol will hardly be likely to get any custody. They will be fortunate to get limited visitation. If such abuse of drugs and alcohol is continuous, the court will order supervised visitation and very rarely grant an over night stay. Courts, with all things being equal, normally award custody to the mother; however in recent years with a growing number of women who have been successful in the professional ranks, such a trend is becoming less and less likely.

TAX CONSIDERATION IN DIVORCES

Before one goes on with the divorce there are tax considerations that must be very carefully reviewed. For example, if both spouses are co-owners in a business, it may be necessary to get a legal separation and discuss a structured settlement plan over a period of several years in order to allow one spouse the opportunity to purchase the other spouses interest in a business. If such a plan is not implemented in some businesses both spouses may be hit with a massive tax bill if such a sale is not structured properly. It is strongly suggested especially for high net worth couples and individuals to consult a tax professional before doing a split. Though this is not of primary importance with couples as they come to a decision to split, it will be of significant importance on the judgment day of reckoning. Many folks who are considering divorce do so for many reasons, most importantly the fact that they have drifted apart and they cannot get along. However, it is very important that persons who are contemplating such a decision be aware of the tax consequences of their decisions, this is especially important for couples who have lived in the same house for over 10 years. The new legislation for the home sale capital gains tax exemption softens the blow of a house sale because of a tax exempt status of up to $500,000 per couple and $250,000 per single seller but those persons who have a much more expensive house have to be very careful in their divorce plans.

ECONOMIC IMPACT OF DIVORCE AND SEPARATION

The economic impact of divorce and separation can be brutal. In many situations it can be downright devastating. One of the factors that causes the economic devastation involves setting up two separate households and making an additional payment. I’ve often advises clients that if their marriage is not at a total breakdown a separation period along with some marital counseling can do wonders. When one comes to a decision of a divorce the moving spouse looks at all the worst qualities of the other spouse. Unfortunately that spouse may not realize that the presently “difficult” situation can end up being very horrible. For instance, if a woman who have been working on a limited basis seeks to get a divorce without any financial support mechanism, it can be truly devastating economically, especially if the spouse whom she is seeking support from is not working steadily or is involved in a business that has peak and non-peak seasons. My suggestion for those persons who are cordial in planning the divorce is that they come to a compromise and allow for a transition period to take place before finally implementing the divorce plan. A perfect example involves selling a house. Whenever you are negotiating you obviously want to do so from a position of strength. You do not want to sell a house while going through a divorce or foreclosure. Therefore, I have advised persons and couples who are considering a separation or divorce to try as best as they can to get their financial house in order and to do as much dividing as possible before ultimately getting a divorce. For example, when a client is adamant about getting a divorce I tell them that they’ll be making sacrifices for a while but that the first 2 years determine whether they make it or whether they sink financially. I advise clients, wherever possible to share an apartment or house with a friend so if they have children they are in a position to make child support payments without going under. I also tell them that the ability to compromise with your spouse can save thousands perhaps tens of thousands of dollars that could take place in a nasty divorce conflict.

Social Security

Even if it is not mentioned in a divorce settlement, a divorced spouse can get benefits on a former spouse’s social security record if the marriage lasted at least 10 years. The divorced spouse has to be 62 or older and unmarried. A divorced spouse can start collecting benefits between the age of 50 to 60 if they are disabled.

Survivor benefits

Unmarried children under the age of 18 are entitled to survivor benefits if the former spouse passes away.

Credit

This is an area that is very important especially to the spouses who are not regularly paying mortgage payments or credit card bills. It is important that you stay current on bills because the action of one spouse can have a devastating impact on the other spouse, especially if the mortgage is not being paid on time or the credit cards are not being kept up. This is especially true if you are jointly named on a credit card or a home mortgage. It is important that you get a copy of the credit report to determine what your credit rating is. Most importantly you must keep up with payments and be aware of all the outstanding obligations that exist between you and your spouse.

Private and public retirement programs

It is important, especially for spouses who have been married for at least 10 years, to get an understanding of how much money is in the other spouses retirement programs. In some situations the worth of each spouses retirement program ends up canceling the others worth in a division of assets during the pendency of a divorce. However, this is an area that is of growing importance, especially to a stay at home spouse or a spouse who only works on a part-time basis. The five-year program is generally mentioned because of the fact that most private and public pension programs vest after that period of time. It would be prudent to get a tax professional to determine the worth of the pension program for present and future value.

ALIMONY

Alimony involves money one spouse pays the other for support and maintenance. There are several types of alimony. One involves lumps of alimony, which is used to help put the other spouse on equal footing with the paying spouse. There is also permanent alimony, which is paid until the death of the payer. There is also temporary and rehabilitative alimony. Temporary alimony usually last for several years and is usually done for non-working spouses to allow them the opportunity to maintain their standard of living or to get job training skills. The factors taken in determining the amount of alimony involve several factors. The most important factor involves the duration of the marriage, the income and net worth of both parties, the contribution of one spouse as a homemaker, and most recently courts have begun to award alimony based on the contributions of one spouse in education and furtherance of the career of the other spouse.

THE OFFICE OF THE FRIEND OF THE COURT

Each county has access to a friend of the court in the state of Michigan. Some counties in Northern Michigan may be combined for a Friend of the Court operation however, any county generally speaking that has more than 60,000 persons has a Friend of the Court operation. The Friend of the Court has psychologists and referees who review motions. Most of this work is for post divorce situations. A husband who has to pay child support may use that court to contest the amount that they are paying and ultimately have a review, a parent may use that office also to ask for an increase in support or a reduction in visitation, reviews may also be ordered through the Friend of the Court to make revisions in the amount of visitation a parent may have. Unfortunately, the office has been used too often by bitter parents to get back at an ex-spouse.
Friend of the court offers recommendations to motions and they may also offer mediation as a way of settling disagreements over custody or visitation of children.

PROCEDURES OF THE COURT

1. The Plaintiff begins by filing a Complaint or Petition for Divorce on the Defendant. This asks the Court to grant a divorce, orders child support or spousal support, establish a paternity case, start an out-of-state collection effort, and/or grant an order for custody of a child.

2. The Defendant must be given a copy of the summons and Complaint.

3. When the Defendant receives that papers (s)he is allowed time to answer the claims made, usually 21 days or (s)he may lose the right to be heard by the judge and result in an order granting the Plaintiff’s requests.

4. The judge must find that there has been a breakdown in the marriage to the point that the parties cannot live together as husband and wife in order to grant a divorce. The judge will then enter a Judgment of Divorce that will bring the marriage to an end. Michigan is a no-fault divorce state so a divorce can be granted even if one of the parties does not want a divorce. The judgment of divorce contains the decisions of the Court which deal with custody, visitation, support, property and other related issues. From the date of filing of a Complaint for Divorce without minor children the waiting period is a minimum of 60 days. For divorce cases with minor children the waiting period is a minimum of six months. After the waiting period the judge may grant a divorce.

TEMPORARY RESTRAINING ORDER OR PPO

You may need a temporary restraining order to prevent the other spouse from transferring or disposing assets and also awarding yourself temporary custody of children and a certain amount of child support. If there has been abuse of you or your children you will have to file a petition for personal protection order or PPO. This will be on the state police registry of a state wide computer system, which will effectuate the order immediately. If the spouse violates the PPO they could receive up to 90 days in jail. Of course, a show cause hearing must be held to determine if that person has violated such an order.

GRIEVING YOUR LOSS

It would be wise to wait at least a year after your divorce to deal with your grief before getting involved in another relationship. Now you have an opportunity to create the life you would like for yourself.

There is nothing you can do to change the past but everything you can do to make a better future.

John graziani, esq., is licensed to practice law in Michigan and has practiced for over 15 years. He has an office in southgate, Michigan where he has a general practice. His areas of practice include real estate, family law, criminal law, municipal work, immigration, and estate planning. He has done hundred of closings and real estate transactions.

Doctor Ditcher And Lessons Of Asset Protection To Be Learned From The McCartney Divorce

The McCartney divorce has been attracting headlines recently, not only because of the vast sums of money speculated as being the settlement figure, but also because of the strange media antics of Lady McCartney herself. Sir Paul’s designer daughter, Stella, was reported as commenting on “Lady Macca’s” TV outbursts, “Well it is Halloween when all the wicked witches come out!” Very good Stella, very good!

With such a high profile divorce being so topical I thought I would get a different perspective from a very different type of observer, Doctor Ditcher, the “International Privacy Strategist for men.” The secretive strategist for asset protection and wealth protection planning for men going through divorce; he usually moves in very radical and some would say subversive ways. He never names his clients but when pressed he admits to having an average “save” for clients of $15 million a client. His wealth protection advice is clearly very much in demand.

We met up at his home in the Swiss Alps; this was my second time there. His Italian maid brought me coffee laced with Drambuie, a particular favourite of my host. After pleasantries and admiring the view I asked him what he thought of all the news about Heather Mills McCartney and the high profile divorce as well as the reported financial negotiations.

“Well, you wouldn’t expect me to express any sympathy for her would you? We’ve all seen the high profile cases before where men have built up a business, assets wealth and good-standing through hard work, only to lose a massive amount during separation or divorce to someone they once loved and trusted. Heather Mills has just made it into the record books because of the amount she appears to be about to scoop after only four years of marriage and because she has achieved so much as a ‘one legged wonder’! Heck, a woman with two legs wouldn’t have cost Paul twice as much, would she? As a man involved in asset protection and divorce strategies for men I have a very jaundiced view of her and women like her”

Never politically correct I knew Doctor D’ would spare none of his derision for a woman whom I know he feels is simply taking advantage of the pro-feminist injustice he feels currently “infects” the divorce courts (his word) in both Britain and America.

“With a very few exceptions none of the women in these cases would have made a hill of beans unless they had managed to snare a very successful man. Their only claim to fame – or wealth – comes from screwing the poor slob one last time, through the courts! The one lesson you learn by observing these cases is that the women take divorce planning and divorce strategies very seriously, the men usually don’t. The men could do with a lot more asset protection planning too; that’s my forte!”

“Men seem to think, ” I’ll get a good divorce lawyer and all will be OK.” Bulls**t! A divorce lawyer is like a mortician; he just serves the corrupted flesh in as attractive a way as possible. Men need to actively protect their assets , not just trusting it will all work out. Divorce strategies and wealth protection do not just happen, they need to be planned!”

“If you think the courts or a good divorce lawyer will protect you, or if you think, your wife/girl is different and it won’t happen to you, wake up and smell the roses!”

So what should a man in McCartney’s shoes have done?

“I have a lot of sympathy for a man like Sir Paul; he didn’t want to believe that things would deteriorate the way they did. Also, he probably didn’t believe that he would be so badly stung after only four years of marriage. I don’t know how many times he and she “did-it” over a four year period, but guess and divide the number into the 50 million everyone seems to be talking about and – well, you get the idea ; a very expensive experience! The thing is, a man must act when things start to go badly wrong. If you wait and let the woman act first you will always be reacting to her legal pressure. If you act first you get ahead of the game. You need to be protecting your assets by pre-divorce planning, just like the women plan their attack on your assets pre-divorce too, and believe me, they do!”

So how does a man act first? “That would be telling! My expertise is very particular and only my clients get to benefit from it, but there are a number of simple strategies for asset protection which you can put in place to control the knowledge your wife /partner gains about your affairs while you are still married to them. Remember in the field of asset and wealth protection knowledge is king. Deprive her of the knowledge and she will always be chasing after you for the information; let her have the knowledge and you will always be racing to catch up with her as she seeks to benefit from her knowledge of your affairs! It is one of the best pieces of wealth protection advice anyone can be given. Asset protection planning MUST start before the divorce starts if it is to be successful!”

Isn’t that going to initiate the divorce, asset protection planning while still married will surely prompt the end of the relationship?

“Not at all. There are simple yet subtle steps you can take that she will never find out about, but which will keep your affairs private. It is a very effective divorce strategy for protecting assets.”

I had observed in previous discussions with Doctor D’ his emphasis on privacy. “Privacy is obviously very important to you as a strategy, Doc’. I note you style yourself an “International Privacy Strategist for Men” Why is privacy so important?”

“Actually I am “The International Privacy Strategist for men” he corrected. “No one else does what I do. Privacy is the foundation of asset protection. If you maintain privacy you can choose what information to reveal and what to withhold. If you do not maintain your privacy, you cannot make that choice because you cannot control the flow of information. Of course there is more to it than that but privacy is the start of all asset protection planning and divorce strategies.”

“I teach my clients four Maxims, – rules of behaviour reflecting truths. The first is; Treat confidential matters confidentially. If you don’t, then don’t be surprised when your wife or partner uses the knowledge gained to her personal advantage.”

“What are the other three Maxims?” I ask. “Sorry Jack, only my clients get to hear them!”

I decide to be cheeky and chance my hand for some information normally off limits.
“And Sir Paul, does he know the other three maxims?”

The Doc’ smiles at me before downing the rest of his coffee. “If he did his asset protection planning and divorce strategy would have been put in place years ago. He isn’t acting on my advice or my maxims or she wouldn’t be talking about anywhere near 50 million!”

Jack Henderson is a freelance journalist specialising in Finance.

Keeping Your Financial Wits When Breaking Up: 11 Critical Financial Mistakes to Avoid in Divorce

Breaking Up is Hard to Do:

Long after the wedding bells have faded, you may know someone who has come to a fork in the road and has decided to go in a different direction than his or her partner.

Building a life with someone involves many things. There are the memories, friendships, family relationships and possibly children and pets. Love plants a seed that eventually grows deep roots as a family is born and grows. And while love is not always about money, divorce certainly can be.

Whether there’s just a house and a retirement account or something more complex like business ownership, other investments and stock options, unraveling a lifetime of work is tough and complicated by emotional issues.

Although escaping the emotional toll that a divorce can have is not possible, it is not in a person’s best long-term interests to make or avoid decisions that will impact the future well-being because of emotion. To avoid being a financial victim and starting one’s new life on the wrong path, there are steps that can be taken before divorce is made final. It’s best to make these decisions as dispassionately as possible using professional resources whenever possible.

Individuals considering a divorce should assemble a team of qualified professionals who can advise on the legal, tax and financial impact of various proposed divorce settlements.

Here are some tips to consider:

1.) Don’t become a financial victim. If you suspect a spouse is planning a divorce, make copies of important records and notify creditors, banks and investment companies in writing.

2.) Don’t prepare an inaccurate budget. Individuals are usually required to produce a budget for temporary maintenance (aka Pendente Lite). But through oversight or inaccurate record-keeping, this invariably leads to problems when they find that they are having trouble making ends meet with the court-approved maintenance based on the budget provided. It makes more sense to bring in a qualified financial professional at this stage to help in preparing the budget.

3.) Don’t try to use the courts to punish a spouse. In most states, equitable distribution is the basis of settlements. Hiring a combative attorney or ignoring other options like mediation or Collaborative Practice will be costly and toxic to post-divorce family relationships especially when children are involved. (For a better understanding of this option, search for Collaborative Divorce or International Academy of Collaborative Professionals).

4.) Don’t forget the common enemy: the IRS. As the proverb says: the enemy of my enemy is my friend. Both parties will be impacted by taxes. With careful planning ahead of time, this can be minimized. If assets need to be sold or qualified plans prematurely withdrawn, this may increase the tax bill while reducing assets to live on post-divorce.

A 50/50 split may sound fair. But the bottom line is the share of marital assets each gets net of the tax man.

5.) Don’t use a divorce lawyer as a financial planner, accountant or therapist. At rates in excess of $300 per hour, it’s easy to rack up big bills and not get the specialized advice that other professionals can offer.

6.) Don’t forget to insure the settlement. The premature death or disability of a spouse means lost support, maintenance or help paying for college tuitions and health insurance.

Make sure that life insurance names the spouse receiving support as the owner of the policy. This way if the spouse who’s paying for the policies stops paying the premium at least the beneficiary/owner will receive notice and can take legal steps to deal with the breach.

7.) Don’t keep the marital home if it’s not affordable. Too often couples will fight over who keeps the marital home. While there may be sentimental value or legitimate concerns about uprooting kids from schools, it may not make financial sense to keep the house. After all, real estate is a low return asset (and has in fact been negative in recent history) while the mortgage, taxes and maintenance expenses can be a drain on post-divorce budgets. It usually makes more sense to sell the property while still technically a couple to get the maximum exemption of capital gains ($500,000 above cost basis) and split the proceeds to buy or rent another place.

8.) Don’t forget to change beneficiaries. Forgetting to delete and change one’s spouse from qualified plans or insurance policies, unless required by the settlement agreement, could result in benefits or assets passing to someone the divorcing couple does not want to receive them.

9.) Don’t forget to close or cancel joint credit cards. To avoid problems its best to close credit cards to any new charges pending the final divorce. This will avoid the temptation of one spouse running up charges.

10.) Don’t agree to a settlement without having a QDRO in place. Whenever a spouse has a qualified plan (ex. 401k or pension) a Qualified Domestic Relations Order will inform the plan administrator who is entitled to the asset and when. (Note that a QDRO does not apply to IRAs which are governed by beneficiary designations). This is sometimes an afterthought but is critical. It’s a good idea to watch the language in these orders. If not worded correctly, it could delay when a spouse will be eligible to start receiving benefits or it could lead to investment decisions that may be reckless or detrimental to the spouse’s retirement interests.

There are several methods for valuing pension or retirement benefits. This is often overlooked by time-starved divorce attorneys or court personnel. Use a financial professional trained in these techniques to make sure the analysis of the settlement is done properly.

And make sure that attorney drafting the wording of the QDRO allows the beneficiary of the pension or retirement account to be eligible for beginning receipt of benefits at the earliest possible time under the qualified plan’s rules. Otherwise, a beneficiary spouse may need to wait until the other account-holder spouse retires which he/she may choose to delay because of need or out of spite. Some administrators will segregate the portion for the beneficiary spouse so it is a good idea to make sure that funds are invested appropriate to the beneficiary’s age and risk tolerance and not simply held in a low-interest money market account.

11.) Don’t underestimate the impact of inflation. Without proper help in reviewing settlement options or preparing a post-divorce plan, it is easy to forget that the lump sum received today may look like a huge sum but may be inadequate for inflation. Whether for college tuition, medical care or housing, inflation can take a big bite out of one’s budget and resources.

For more tips and personal help, consider using a qualified Divorce Financial Planner like a CERTIFIED FINANCIAL PLANNER ™ Professional or someone holding a specialized designation in divorce financial planning like the Certified Divorce Financial Analyst (CDFA). Visit www.ClearViewWealthAdvisors.com for more details or to discuss a personalized plan.

Special points of interest: Common Mistakes

Producing an inaccurate budget of how you live now
Being too emotionally attached to assets during settlement negotiations
Disregarding the impact of taxes on divorce
Forgetting to update estate documents or beneficiary designations
Failure to adequately model a post-divorce financial plan
Not insuring the settlement against death or disability

Steve Stanganelli, CFP®, CRPC® is a CERTIFIED FINANCIAL PLANNER ™ Professional and a CHARTERED RETIREMENT PLANNING COUNSELOR (sm) with Clear View Wealth Advisors, LLC, an independent fee-only financial planning and investment advisory firm with corporate offices in Amesbury, Massachusetts and satellite locations in Woburn and Wilmington. Steve is a five-star rated adviser by the independent Paladin Registry. He specializes in working with Baby Boomer business owners, busy executives and other professionals to help them make smarter money moves that build and protect wealth during life and business transitions. Steve’s practice includes the areas of retirement planning, low-cost index investment strategies, divorce settlement analysis, college funding and asset protection for business owners and professionals.

I Don’t Want a Divorce But My Spouse Does

“I want a divorce.”

Four words and your entire world has been shattered. Life, as you knew it seven seconds before, will never be the same again. The person who was supposed to love you forever has reneged on the agreement and, whether you like it or not, he or she wants to leave.

What can you do?

#1- Ask questions. When a spouse chooses to exit the relationship, you have a right to know why. “I don’t know” or “I fell out of love with you” are not sufficient responses. Leave no room for the making of assumptions here. You want to be as clear as clear can be. Here are a few questions you can ask:
* When did you first think about filing for divorce?
* Are you unhappy with the relationship, our finances, the way we communicate, our sex lives or is it a personality clash?
* Would you consider going to marriage counseling? Why not?
* What specific event occurred to make you stop loving me?
* When do you plan on leaving and are you going to move out?
* Is there any way to avoid making this decision right now? Can we go for a trial separation first?

Again, be sure that your questions are specific but are not accusatory or attacking in nature. Don’t get caught up in the moment. I know you want to ask “How can you do this to me?” or “Are you sleeping with somebody else?” or “Do you realize what you’ll be doing to our kids if you walk out now?” While it might feel good to ask these questions (because you get to be right), they will be misconstrued as personal attacks and your spouse will retreat or retaliate but he or she will not respond.

#2- Do some soul searching. Once you’ve asked your spouse for clarity, you need to take time out for yourself to seek your own clarity on the marriage. Go some place quiet where you won’t be disturbed for at least 30 minutes. Bring a journal and a pen with you. In the journal, write your answers to the following questions:

1) When was the first time I noticed that things in the marriage were going downhill? Describe the exact moment it dawned on you.

2) What steps did I take to reconnect with my spouse? What was his or her response to me?

3) Is my spouse the kind of person that I always pictured myself with? If not, what key characteristics is he or she missing?

4) Over the course of the marriage, has my personality changed? If so, how? Have these changes made my marriage better or worse?

5) When I married my spouse, was I 100% sure that marrying this person was the right choice? Why or why not?

6) Throughout the marriage, have I trusted my spouse to be a partner in this marriage? Why or why not?

7) What hurts most about him/her telling me he/she wants a divorce?

8) In an ideal world, what does a great marriage look like to me? What are the characteristics and traits of the person who’d be in this enchanted love with me? Do I possess these traits as well?

9) What are three lessons I’ve learned from this entire experience?

10) If I had to do it all over again, would I still have married this person? Why or why not?

When you’ve answered all 10 questions, give yourself 10-15 minutes to release the emotion (cry, hit a pillow, stomp around). Do whatever you need to do to get the feelings out. When you’re done, take four deep breaths (inhale on a count of 4 seconds, hold for a count of 2 seconds, and exhale for a count of 4 seconds).

#3- Get prepared. There’s nothing wrong with holding hope for the marriage or seeking out counseling but you’ve got to be mindful of a couple things:

1) Your spouse has been planning to leave the marriage for some time now. You now know this but he or she’s been considering this option and strategizing around it for a while. At this point, as far as divorce planning goes, he/she is light years ahead of you.

2) The person you marry is rarely the person you divorce. By the mere fact that your spouse has said to you “I want a divorce”, you can clearly infer that you and your spouse have different agendas at the moment. This is no longer a partnership. It’s a corporation and you need to look out for your own best interests. Find a good attorney, get the facts and start preparing now.

Kassandra Bibas is an Associated Certified Coach (ACC) and is Chief Knowledge Officer at ROI Coaching. ROI Coaching has one mission: to uplift and change people’s minds about the greatness of their lives. Her motto: Do it now!

Post Divorce – Money Matters – Oops! The Bills!

Taking Care Of Bills And Credit

There are so many things that you will need to plan for when getting a divorce. Plans have to be made while getting ready for an entirely new life. These plans have to be carefully thought out, so that you can live peacefully and move on with your life.

What can be devastating is dealing with bills, but if you go through them methodically, you will save yourself a great deal of hassles. The bills need to be paid so that your credit rating is good. To deal with bad credit will only make things harder for you in the long run, so the first priority is to pay off your bills.

There may be bills that will have to be taken care of with your ex. In order to see that they are paid, you will need to come to an agreement together, or consult with an attorney who will help sort them out, and in many cases this is done before the divorce is settled by the judge. You will need to go through the bills carefully and accurately to avoid disputes, at the same time, bearing in mind that you will be financially independent, and therefore will need to protect your interests.

Other Issues Like House Payments And Insurance

There are innumerable other issues to take care of, some of them being the car and house payments. These have to be discussed with your ex amicably, so that there is no ambiguity of any kind. There are also the issues of Health Insurance, Life insurance, car insurance which may have both your names and other 401K plans. Your life has taken on a new and different turn now, and you will need to carefully consider all your expenses. There may be sacrifices that you will need to make till you are completely on your feet. You will need to figure out all the expenses that are required, knowing that now you are completely on your own.

Attorney Fees

Another important factor is paying for your attorney. It is expedient to get a good attorney who can go through all the above issues and thereby make the process easier. These payments should start immediately, so that you do not find yourself in a situation where you are swamped with bills and expenses and unable to manage.

There will be bills, particularly when you are moving out – it’s like starting all over again. So you would be wise to take stock of your finances and tread carefully, so that you can start the process of moving on to a life after divorce, and get your life together in an organized and intelligent manner.

Property Issues in California Divorce

What is Community Property?

California is a community property state in which spouses are entitled, with some exceptions, to an equal division of community property and debts in a divorce (called dissolution in California).

Community property is all property, in or out of state, that either spouse acquired during the marriage through the efforts of either spouse or with community property funds. This means that, even if only one spouse worked during the marriage and the other stayed at home raising children, both spouses are entitled to one half of the community property. “During marriage” refers to the time period from the date of marriage to the date when the parties legally separate. The date of separation is often contested because it determines the extent of the community property estate. The courts have said that separation occurs where one spouse subjectively intends to end the marriage and does something to evidence that intent. It could be moving out of the family home, telling your spouse the marriage is over, arranging for a new place to live, etc.

What is Separate Property?

The parties are entitled to keep their separate property which is not divided in a dissolution. Separate property is any property that is acquired before the marriage, including any rents or profits received from those items; property received after the date of separation with separate earnings, inheritances that were received before or during marriage; and gifts solely to one spouse.

Do debts and credit cards also have to be divided?

Debts are also classified as either community or separate property debts. With few exceptions, debts incurred during the marriage are community property debts that will be divided equally in the dissolution. It does not matter whose name is on the debt.

For example, credit card debts incurred during the marriage are community property debts regardless which spouse’s name is on the credit card. Student loans are one of the main exceptions to this rule. In certain circumstances, the community may be entitled to a re-imbursement if the couple pays off one spouse’s student loans during the marriage. Debts that you incurred before marriage or after separation are separate property debts.

What happens to the Family Home?

The family home in California is often the marriage’s most valuable asset. The division of the family home can be complicated if there are minor children and one spouse wants to stay in the home. The community property interest in the home is further complicated where the property is in the name of one spouse and was acquired prior to the marriage but the mortgage payments have been paid from community earnings. Parties should also be aware that if one spouse remains in the property after separation they may be incurring indebtedness to the other party if the fair rental value of the property exceeds the mortgage, taxes and insurance payments on the home. These are called Watts claims. The reverse may also be true. If the spouse living in the house is paying the mortgage which exceeds the fair rental value, they may be entitled to what’s called Epstein credits.

Am I entitled to a share in my spouse’s pension?

Another valuable asset in a marriage is a pension or retiremement plan. The non-employee spouse is entitled to a portion of the plan that was earned during marriage. To ensure that any pension settlement is enforceable it is advisable that any settlements regarding pensions are contained in a “Qualified Domestic Relations Order” (QDRO) signed by the Court.

How do I figure out the extent of my husband or wife’s property?

Each party is required by California law to file a preliminary and final “declaration of disclosure” with the Court that they have served an Income and Expense Declaration and Schedule of Assets and Debts on their spouses. The final declaration can be waived by the written agreement of the parties. The disclosures will list each spouses community property assets and debts and separate property. Most disputes involve the extent and valuation of community property assets. If a spouse tries to hide assets, your attorney can employ various discovery tools forcing a spouse or a third party to turn over financial records. For example, they can subpoena the records of third parties such as banks and CPA’s. In complicated cases it may be necessary to employ the services of a forensic accountant. It is a good idea to minimize this risk by taking some simple steps as part of any pre-divorce planning. You should make copies of important financial documents such as tax returns, W2’s, bank and brokerage statements and keep them in a safe place.

The law requires the parties to make full disclosure of all their assets and liabilities and also any business investments and opportunities. The case of Marriage of Rossi, illustrates what can happen when one party tries to conceal assets. In 1996 Denise Rossi won $1.3 million in the California State Lottery. She chose to conceal the winnings from her husband and filed for a divorce 11 days after learning of her winnings. She had been married for 25 years. 2 years after the case was over and a Judgment had been entered, her ex-husband discovered that his ex-wife had won the lottery. He filed a Motion and the judge gave all of the $1.3 million dollar lottery winnings to the husband, since the wife had intentionally not disclosed her winnings in the divorce proceedings. News reports indicate that Denise ended up filing for bankruptcy.

Don’t forget some often overlooked assets!

Some assets that are easily overlooked but may turn out to be valuable include:

o Tax refunds

o Frequent flyer miles

o Season tickets

o Prepaid insurance

o Vacation pay

o Club memberships

Are their tax consequences of a property settlement?

It’s important that you consider the tax consequences of any property settlements during a dissolution. Generally, IRC section 1041 provides that transfers to a former spouse incident to a divorce are not taxable. However, if either spouse agrees to sell an asset as part of a settlement there may be a tax consequence. For example, if parties agree to sell the family home and divide the net proceeds they may have to pay capital gains tax on any gain. The Tax Reform Act 1997 gives each spouse a $250,000 exemption from gain realized on the sale or exchange of the principal residence. Similarly, the tax consequences of distributions from pension plans now or in the future should also be considered.

An Online Divorce Service and How To Save Thousands Using It

For anyone confined within a meaningless relationship, an online divorce service is undoubtedly a solution to be hoped for by shared agreement. No-one needs the financial strain of lawyers or the demands of a court hearing. On the other hand, did you know that there is currently an easy and cost-efficient practice which can let you finish your divorce documents from the comfort of your home and with no need of a lawyer? The overall divorce plan of action will swiftly be performed in your own home, but minus the strain involved with going to trial or combating long judicial action and delivery intervals that will be imposed by judicial red tape and restrictions only, and not always by the law itself.

There’s a program often called a do-it-yourself divorce procedure which should deal with each and every aspect of a divorce case preparation. Simple online divorces are available as the total service is provided in the correct way, and in agreement with the legal system of the location where the divorce transpires. You don’t have to go through a wide range of forms or even look at many more pages of training. The right divorce solution without the need of law firms will put together the papers and supply these to you by email.

Utilizing this online divorce service solution there is no waiting around. All of the divorce planning will be certain to give you the most recent family law divorce documentation required to file for your divorce in your own state. Simple online divorce papers produce all the details you’ll require for you to accomplish a DIY divorce, rendering the whole procedure far less frustrating and much less time intensive. You will be supplied with 100% assured divorce case documentation so you understand you have a service which you can totally depend on. That gets rid of the strain of unwarranted lawyer’s fees whilst helping you save considerable time as well as money.

Together with this online divorce service you are additionally provided with proven and direct guidance on the best way to fill out the divorce case documents, getting rid of all of the guess work. All the forms are designed to help you save money by getting rid of unnecessary legal fees while ensuring that the divorce case completes to your complete satisfaction, devoid of the cumbersome slowdowns generally related to these legal procedures along with the vagaries of law offices. All the details are structured to ensure you are inconvenienced the least and you save your time and hard earned money, and the anxiety that typically occurs with such potentially traumatic procedures.

Divorce processes vary from one state to another and for that reason so do the records and documents; what’s needed in Tennessee differs from what’s necessary in Colorado or Virginia. Also you will find state discrepancies with the range as well as the detail of paperwork which you’ll need to progress with the divorce process. It is crucial that you use the proper certification using the accurate details as appropriate to the legislation in which the divorce process is happening. Therefore it’s equally important that the divorce service that you work with will be offering you the most dependable assistance possible, and that this professional help is likewise current and up-to-date.

The speed of a divorce case is significant to anybody going into this kind of procedure. No one likes a legal process to continue endlessly, and that pertains most definitely to divorce cases. With the help of an online divorce service you ought to ensure that the service plan which you utilize to help expedite the divorce is fast and doesn’t become delayed inside legislative operations. Any solution without having law firms will be faster on the grounds that charges won’t be dependent on the volume of hours worked, but will tend to be formulated on a fixed rate for a specific solution.

The anxiety associated with divorce is often telling on most people. Nobody involved with divorce procedures goes about with a grin all day long. Therefore the service supplying the divorce case papers will have to be rapid as well as gentle. In particular, the qualities of the service plan ought to be very easy to expedite and never result in strain or worry for the sides concerned. The optimum divorces are the ones that conclude speedily and also while not resulting in the trouble and pressure that can come from extending the legislative activity.

Every divorce differs from the others considering the fact that people are pretty much all different and so every single divorce process should look after differing expectations and scenarios. The end result needs to make sure that both parties can be effectively covered and that should there be children included they, too, ought to be considered in the eventual negotiation of the divorce. A online divorce service will certainly ascertain all of it is fulfilled with the minimal amount of fuss or vexation, and that everybody shall be all set to go on with their day-to-day lives as normal.

Many marriages have a tendency to undergo bad times every so often, and most re-establish, nonetheless a couple do know if important things go wrong, so when things reach that point then there may be just a single likely plan. Divorce isn’t something to be undertaken casually, but the heartache of a marital relationship which is not working can be intolerable to a lot of men and women. In these instances it is sometimes your best course of action to be practical and at least find out what your choices are.

You will find there’s a big help system of partnership mediators that’s grown up as a consequence of the growing trend of failures in family relationships which is a part of modern living. Yet a time has to come when counselling on its own breaks down. That is the point in time to consider an online divorce service to make certain that your marriage is ended in as civilised a means as practical.

Do it Yourself Divorce Part One – Know Before You Begin

Do-it-yourself divorce is becoming more popular these days, especially among those who feel that they can’t afford to divorce. Many divorcing couples also fear that hiring divorce lawyers will lead to emotional and costly battles over children, property and finances, so they are opting for the do it yourself divorce. There are a wide range of options for DIY divorce, including using an online divorce service, obtaining a large pile of divorce forms from the Clerk’s office, mediation or hiring a divorce lawyer to draft or review a Marital Settlement Agreement. The DIY divorce may not work for many, but it also may be the only financially feasible option for those who cannot afford to divorce. No article can take the place of legal advice- but this five part series will give some tips for the do-it-yourself divorce process.

Before embarking on a do-it-yourself divorce, it is important to know what the issues are and what you can and should expect in terms of timesharing, support (child support and alimony, if it applies) and dividing property and liabilities. It is highly encouraged that the first step should be to consult with a divorce attorney. While this is the step that most do it yourself divorce seekers want to avoid, it is crucial to have an understanding of divorce law and your rights. Too many times people in do it yourself divorce situations enter into a settlement agreement and forget to include things only to find out later that either they have waived their rights or that they will now have to spend even more money clarifying their Marital Settlement Agreement. A free divorce consultation may sound tempting, but will likely be a brief meeting with little information provided about how to go forward with the divorce process. It is recommended that you have a thorough initial consultation with a divorce attorney to discuss your children, proposed timesharing, your income, assets and liabilities. During this initial divorce consultation, a divorce lawyer can give you suggestions on how to divide property, calculate child support and divide assets. A divorce lawyer can also discuss with you the information you need to gather in order to make decisions as well as the potential problems that may arise. The cost of an initial divorce consultation may be a small price to pay considering what is at stake.

During an initial divorce consultation, there are several items that must be addressed. If you have children, your divorce lawyer should explain to you the changes in Florida law regarding parenting plans and time sharing. Florida law now requires a parenting plan in all divorce cases, so your do it yourself divorce plan should take this into consideration. You can also discuss with your divorce attorney whether or not to include extras such as college tuition and extracurricular activities. During the initial divorce consultation, your divorce attorney can also review the particulars of your financial situation, especially the big concern for most do it yourself divorce seekers, which is the residence. Your divorce lawyer can discuss with you whether you should keep your house or sell it, who will live in the house until it is is sold and how you will pay not only the monthly bills but any expenses and repairs that arise. In order to have a complete Marital Settlement Agreement, you need to be aware of these concerns.

These are just a few of the concerns you need to discuss with a divorce lawyer. There may be more depending on your specific situation. In the next article, I will discuss how to become familiar with your financial situation and how to deal with questions about assets, liabilities and income.

Lori Barkus is a Florida Supreme Court Certified Circuit Civil and Family Law mediator who practices in the areas of marital and family law and adoption. Her office is located in Weston, Florida.
For more information visit http://www.barkuslaw.com

The information included in this article has been prepared by Lori Barkus, Esq. for information purposes only and is not intended to be a substitute for legal advise from your own legal counsel. Transmission of such information is not intended to create, and receipt does not constitute, an attorney-client relationship between Lori Barkus, Esq. and the receiver. No information in this article should be acted upon any person, entity or firm without first obtaining proper legal advise. Please feel free to contact us for a free case evaluation. However, be advised that the act of sending electronic mail or any telephone communication with Lori Barkus, Esq. or Lori Barkus P.A. does not in and of itself create an attorney-client relationship.

Plan Ahead For the Holidays – Divorce and Children

Many issues come up around the holidays for those who are divorced, those in the middle of a divorce and even for those contemplating a divorce. The holiday season can be very busy for family law attorneys and the family courts. The common holiday advice of starting early to avoid holiday stress is even more important in the area of child custody and divorce.

Contemplating Divorce? You can take steps before the holidays!

We often hear individuals say they want to wait until after the holidays to begin the divorce process. Others insist that they do not want to spend another miserable holiday and would much prefer starting their new life and beginning new traditions before the season begins. New Years Eve appointments are common with a client saying: “I want to begin this process before the year is out.”

Everyone’s situation is different and you might want to evaluate yours with a family law attorney. You may discover alternatives you had not considered. Meeting with a family law attorney does not mean the divorce is inevitable. It might just be a good information gathering session.

Already divorced? Check your parenting plan!

Most parenting plans (as the custody arrangement is called in Washington State) make provisions for the holidays but often they are vague and open to interpretation. The best way to avoid conflict is to plan ahead and make sure that you and your ex spouse are clear about holiday plans including transportation arrangements and costs if necessary.

Even if you are getting along, it is important to get it in writing. It could avoid trauma and save money to work with your family law attorney to revise your parenting plan so that it is specific. Do it now! The courts do not consider holiday plans an emergency and you will not get assistance from the court if you wait until December.

In the middle of a divorce? Plan ahead!

It seems that Christmas is an issue regardless of the parents’ religious practices. Calling it “Winter Holidays” sometimes helps. Often the parents alternate Thanksgiving and Christmas. Some parents want to do things the same every year. This might involve Christmas Eve with one parent and Christmas Day with the other. Some divide the school vacation and plan a trip with the children. There is no one right way to devise a holiday parenting plan.

Your top priority is making it a pleasant holiday for the children. Perhaps some new traditions can be started or new ways to carry on old traditions. Emotions might be raw right now and communication may have broken down. Your attorney can help you plan ahead for the holidays so that you are not engaging in last minute traumatic negotiations.

Your best chance of success is devising a plan early. Family law attorneys are experienced in helping divorcing parents craft such a plan and getting it in writing to avoid future misunderstandings.

Pre Divorce Planning – Steps to Take to Keep Control of Your Estate Plan

Until last year, it was customary for a matrimonial attorney to advise his or her client that the last will and testament he might have previously executed might be changed as a result of the entry of the Judgment of Divorce. This was necessary because the law provided that a disposition to a former spouse or the naming of her as a fiduciary of the estate would be automatically revoked once the divorce was final. The repeal in 2008 of the old law and its replacement by a much more comprehensive statute has changed the way divorce planning will be done in the future.

Before the change in the law, dispositions to the former spouse other than by will were unaffected by the divorce. For example, a divorce did not revoke lifetime revocable trusts (including Totten Trusts), life insurance policy beneficiary designations, joint tenancies, or a power of attorney given to a former spouse. In light of the widespread use of these instruments, the failure to treat them the same as the law treated dispositions by will presented a major inconsistency.

The new law largely corrects the different treatment. Under its provisions, a divorce or annulment revokes any revocable disposition or appointment of property to a former spouse, including:

* A disposition or appointment by will,

* By beneficiary designation,

* By revocable trust (including a bank account in trust form),

* Any revocable provision conferring a power of appointment on the former spouse,

* Any revocable nomination of the former spouse to serve in a fiduciary or representative capacity, such as nomination of the former spouse as an executor, trustee, guardian, agent, or attorney-in-fact; and

* Joint tenancies between former spouses (including joint bank accounts) and transforms them into tenancies in common.

New York case law already provides that divorce converts a tenancy by the entirety in real property to a tenancy in common.

The new section also provides for the revocation of a beneficiary designation (to the extent permitted by law) in a pension or retirement-benefits plan, including but not limited to, a stock bonus or profit sharing plan, account arrangement, brokerage firm or investment company account

Opportunities and Needed Action

A divorcing spouse should now understand that most dispositions and designations to a former spouse will be automatically revoked unless specifically saved by language in the governing instrument. These automatic revocations may result in ineffective beneficiary designations in a variety of circumstances. Therefore, divorced spouses should now take the opportunity to review all of their estate planning documents and revise provisions that are now left without beneficiary or fiduciary.

Failure of a divorced spouse to name new beneficiaries in certain instruments could lead to the divorced spouse’s “estate” being designated the default beneficiary. In some cases, such as tax-deferred retirement plans, the failure to name an individual beneficiary could result in severe tax consequences by accelerating the recognition of income to the estate.

In addition, assets that were once non-probate property, such as a Totten trust, because they passed by operation of law to the former spouse as the designated beneficiary, may now require a probate proceeding. It also means that estate plans once designed to avoid probate, such as by the use of revocable trusts, may now instead require a construction proceeding to cope with missing fiduciary appointments and beneficiaries.

The divorce process can take as much as two or more years to conclude in a Judgment of Divorce. During this period, should a divorcing spouse die, the law treats a divorcing spouse as still married and the adverse party is entitled to all of the rights and benefits of a surviving spouse. The same risk is present, of course, when a couple has simply separated. The separation could last for years without change in the married status of the couple.

If divorce is inevitable, there is little reason not to start on the process of revising the divorcing-spouse’s estate plan at the beginning of the divorce action. All of the elements of the divorcing-spouse’s estate plan need review. Of course, any estate tax or income tax consequences of any potential change must be evaluated, as well.

This article presents a general discussion of New York law. No action should be taken on any of the matters discussed without the advice of an experienced professional.