Being unhappy in your marriage is not an easy problem to solve. Counseling doesn’t always work, IF you can get your spouse to even agree engage with an open mind. Most people stick it out, sacrificing their own happiness for the happiness of their children or simply to avoid the uncertainty of divorce.
As a primary wage earner, you may feel like your spouse has not matched your contributions to the marriage emotionally or financially. You may have sizeable employment related assets such as retirement accounts, stock options, pensions, and unvested bonuses that you are uneasy about dividing. Yet you’ve come to the realization that your situation is not healthy.
Can you pay alimony and child support and still have enough cash at the end of the month to pay the mortgage? Will your spouse pay the mortgage on time or be able to refinance so your credit doesn’t get damaged if she remains in the home?
Does your spouse not understand that “you work too much” because you have to in order to make ends meet?
Unfortunately as a supporting spouse, your thought process has to be different when getting divorced. The financial stakes are much higher; not only are you looking at splitting assets, you could be on the hook for attorney fees for yourself as well as your spouse. Being aware of these facts and planning ahead will save you anguish and money.
1. Be Amicable and If Possible, Settle Your Case Out of Court
This is generally good advice regarding divorce related matters. Cases involving financial issues including child support, alimony and equitable distribution are expensive to litigate. They are inconvenient and require the production of mounds of financial documents that attorneys have to review. You will spend money on defending or conducting depositions. If you’re self-employed you can expect the opposing counsel to dig into your business assets and for your business to be appraised. Typically its not worth it to spend money on attorney fees that you could pay to the other party to resolve the claim and most business owners would prefer not to have attorneys and judges snooping through their business records.
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2. Attorney Fees Awards
In custody, alimony, post-separation support and child support cases your judge may order payment of reasonable attorney fees if they find the other party:
1) Is acting in good faith (they filed a legitimate claim for a legitimate purpose)
2) Has insufficient means to defray the expense of the suit.
If your spouse doesn’t have significant assets, attorney fees are in play. In our experience, most cases that resolve out of court do not result in attorney fees as part of the settlement.
3. Electronic Evidence
Infidelity is expensive. If you’ve committed acts of infidelity there is a great chance your electronic devices and social media accounts will be requested by opposing counsel during your case. Device imaging is a common discovery tactic employed by domestic attorneys and your attorney will need to defend against overbroad requests. Ideally, you don’t want evidence of infidelity, substance abuse or income on social media or on your phone, however, both mediums are central to our everyday lives.
What you post on social media is very difficult to erase. Messages sent on your phone can be recovered even if they’ve been deleted. It can be crippling to your case when damaging information is found on your social media page or electronic device and it is even more crippling to your case and your credibility when it can be proved that you deleted potential evidence.
If you suspect your spouse has committed acts of infidelity, cohabits, or is otherwise not being forthcoming with evidence, it you may need to hire forensic experts or private investigators to gather evidence for your case. The fees charged by these professionals are separate from your attorney fees and they typically charge to testify in court on your behalf.
4. Understand the Definition of Marital Property
It can be a blow when you realize that half of your retirement earned during the marriage will go to your spouse. Many business owners don’t realize that if they started a business during the marriage it is marital property.
Marital property is property that is acquired during the marriage by one or both spouses and owned on the date of separation. It includes both assets and debts. Forming an LLC and putting property in it does not change its character, the LLC you form is likely marital property also.
Despite many clients who ask, there is no way to wiggle around the requirement that marital property will be split in most cases 50/50. It is not an issue of “good vs bad lawyering” or your lawyer being “golf buddies” with the judge. Absent extreme circumstances, you’re looking at a 50/50 division of assets and debts acquired during the marriage.
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5. Take Steps to Avoid/Minimize Retroactive Support
Courts can award retroactive child support which cover periods prior to a child support action being filed. The amount of retroactive support is typically determined by “looking back” and calculating what your obligation would be for the applicable time period. The court can also calculated based on a your “fair share of actual expenditures” for your child’s care.
Long story short, if you are a supporting spouse, it is a good idea to pay some support upon separation, even if there is no court proceeding pending. It may be helpful to meet with an attorney to approximate your child support obligation or at a minimum, try out some of the many child support calculators online.
Note however that child support guidelines only apply in cases where you and your spouse’s combined gross annual income is less than $300,000.
6. Mediation is Your Friend
Mediation is an extremely useful tool in resolving cases out of court. Mediation allows both parties to meet with their attorneys and an independent mediator to exchange offers and try and resolve their case out of court. You may be wondering “why can’t attorneys do this on their own?” It’s a frequent question that doesn’t have one single answer. In short, attorneys take positions and have biases. They can be extremely busy and it’s rare that both attorneys involved are able to dedicate an entire day to exchanging settlement offers.
It is beneficial for both you and your spouse to hear what to expect from an independent mediator. Often this reaffirms what your attorney has been advising you or unfortunately sometimes can conflict what you’ve been advised by your attorney. Cases tend to settle in mediation more often than not and many times cases settle even if you’re worlds apart on settlement negotiations prior to the meeting.
Mediation is mandatory once a case is filed in custody, equitable distribution and alimony cases. Don’t look at it as an unnecessary expense, what you spend on a mediator can save you tens of thousands of dollars.
7. Valuation of Assets Can Be Expensive
Businesses, pensions, retirement accounts, real property, and timeshares often need to be distributed in equitable distribution cases. These are assets that need to be appraised or valuated in order to prove their value in court. An expert is typically required to determine the value of these types of marital assets and experts don’t come cheap.
If you’re not determined to divide your assets equally down to the penny, you can work out how to divide difficult to value assets in a way that works for everyone involved. Money spent on experts can be kept in the marital estate. However, be aware that the value of assets such as pensions and businesses are not always apparent to the lay person. It is highly recommend that you speak with an attorney before agreeing to waive your right to any significant asset.
8. Unvested Assets Can Be a Thorn to Deal With
Restricted stock units and deferred bonuses can present issues in property settlement during divorce negotiations. While earnings after the date of separation are not marital, establishing when an unvested asset was “earned” may not be clear from employment records. Your best chance at having unvested assets classified as separate is if it’s clear that said assets are earned based upon future performance.
Are you a supporting spouse who is ready to move forward or have questions about your divorce? Contact us today!
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