Tag Archive for: Divorce

Baby boomers’ finances during divorce

Wisconsin individuals who are going through divorce may have concerns regarding their finances after the split. However, this concern is even more acute for older couples. These individuals might worry about their ability to retire after their funds are divided during the divorce process. Another valid concern is how a person will be able to acquire employment later in life if he or she has spent decades out of the workforce to care for the couple’s children, for example.

One way that baby boomers can protect themselves during the divorce process is to learn about their finances. One spouse may often defer to the other spouse to handle finances. This is why it is important to pull credit reports for both spouses, as one spouse may discover that the other has developed credit in their own name only. Therefore, one spouse may not have the same development to their credit, affecting their future credit card and loan applications.

Once a baby boomer takes stock of his or her financial picture based on credit scores and balances in financial accounts, he or she can begin considering a divorce settlement. While the marital home is often a point of contention, it may not be worth fighting over. After evaluating the costs associated with maintaining the property and the income level that a baby boomer might have after the divorce, the best option may be to have the other spouse buy out his or her share. Then, they should make sure to take their name off the mortgage.

Individuals who are going through divorce may have a chance to negotiate a divorce settlement that is favorable to him or her. This settlement may take the form of asking for each spouse to retain his or her own retirement account and asking the other spouse to refinance the mortgage in a single name, among other possible courses of action.

Source: Fox Business, “Divorcing Baby Boomers: How to Get a Financial Grip“, Donna Fuscaldo, April 30, 2014

Financial steps to take when going through a divorce

Wisconsin residents who are about to embark on a divorce may not realize how many financial considerations need to be taken into account in the family law proceedings. Wisconsin is a community property state, meaning that assets acquired during marriage must be equally divided between divorcing spouses. These assets may include income that is not yet in liquid form, such as an IRA or a retirement account. A transfer of retirement funds from one spouse to another could result in unfavorable consequences if not done correctly.

Spouses may use a Qualified Domestic Relations Order to transfer a portion of IRA and other plans to another party without facing negative tax consequences. Individuals may also need to revisit retirement plans and life insurance policies to change the beneficiary designation, and they may also need to change the calculations previously made in their retirement planning.

Another tax consideration presents itself when property is transferred from one spouse to the other. Parties to a divorce should consider their estimated future marginal tax rates as they will stand after a property division is effectuated, since one spouse may have a higher capital gains tax on a future disposition than the other. In addition to separating community property, spouses will also need to separate their finances and the money they hold in joint accounts. Parties should be careful to close all joint accounts and to open separate accounts in order to establish their own line of credit. Parties should also rewrite a mortgage in the sole name of the party who keeps the home.

An attorney may help individuals assess their business cash flow and their personal budget. Individuals may also want to review their estate planning documents and consider them as they relate to a property settlement. Family law attorneys may help individuals conduct discovery to uncover the assets that should be taken into account when negotiating a settlement.

Source: Dentistry IQ, “Important considerations for the couple going through a divorce: Part 2“, Theodore C. Schumann, May 18, 2014

Dealing with the financial details of divorce

Wisconsin residents may be interested in a recent article that discusses how an individual’s finances are impacted during a divorce. There are many important issues to discuss with an attorney or finance professional when filing for a divorce, and many couples do not consider all of the variables without guidance.

One of the most important aspects of any divorce is property division. Absent an agreement between the spouses, courts in Wisconsin will use equitable distribution principles in dividing up marital assets. This does not always mean that the division is necessarily equal. Tax is an important consideration during property division, and it is something that many couples overlook. Income and expenditures can change dramatically after a divorce, and if one spouse is a much lower income earner, it may be advantageous for that spouse to get assets that will have a lower tax associated with them. If a spouse with a lower income ends up with the large family house, for example, they may end up with a tax burden on that property that they cannot afford.

Retirement accounts are also important to keep in mind during a divorce. These accounts are usually factored as part of the property to be divided when the court issues a qualified domestic relations order. Taxation is again a factor here. If one spouse is awarded part of the other spouse’s retirement benefits then they can withdraw that money from the account and roll it over into a new account without the normal early withdrawal penalty that would be applied.

A couple can continue to file their taxes using the joint return status until the actual divorce papers are signed and the order is issued. This can allow both spouses one final term of lower tax before they must file as single.

Source: Nerd Wallet, “Divorce: Making Sense of the Confusion“, J. Kevin Stophel, June 03, 2014

Director deals with major divorce

Wisconsin movie fans may be familiar with director Michael Moore and his current divorce, which one source has characterized as “vicious.” Moore and his wife of 23 years, Kathleen Glynn, are undergoing a split. Sources did not name a specific reason for the divorce, but a major point of contention will be Glynn’s use of marital funds to build an expensive vacation mansion on a lake in the couple’s native Michigan.

Moore’s attorneys are alleging that the building of the house has done considerable damage to his reputation. To back up their assertion, his lawyers have called in two of Moore’s agents, one of whom is the book agent who secured several of Moore’s successful book deals. The agents will attest to Moore’s niche role in Hollywood and how having ownership of the luxurious house has impacted his image as a man of the people.

The attorneys will also be introducing into evidence various news articles about the house, including one that describes it as a sign that Moore is hypocritical. The couple also owns eight other properties in various locations. The divorce proceedings will deal with this aspect of property division, as well as a decision on how to split the millions of dollars earned during the couple’s time together.

For those who are about to undergo divorce for the first time, it may be extremely difficult to determine what to expect. For these people, it may be helpful to talk to a lawyer who has experience in divorce law. The attorney may be able to explain what to expect and help guide the client through the process.

Source: Fox News, “Director Michael Moore enmeshed in vicious divorce“, June 08, 2014

Pets as property in divorce proceedings

Wisconsin residents who are going through a divorce with pets involved may be wondering what rights they might have regarding the ownership and custody of those pets. According to the law, a pet is a piece of property just like any other possession.

However, the way pets are handled in a divorce varies among judges. Some judges are starting to recognize that people view their pets as more than just property and act accordingly. They may award the pets to the person who has been their main caregiver and to whom the pets are most bonded.

Some judges remain unsympathetic to the plight of divorcing pet owners. In order to retain pet custody after a divorce and avoid unnecessary emotional trauma, individuals concerned about the fate of pets they are bringing into a relationship may wish to include the pet in a prenuptial agreement. Postnuptial agreements can also be arranged for pets that couples obtain after the marriage.

Individuals should also be aware that beloved pets may sometimes become the targets of domestic violence. One woman spent three years fighting for custody of her dog, and six months after the three-day trial that decided the case, the dog died. The woman’s attorney has alleged the death was suspicious.

In 2013, a New York court made state judicial history by permitting a couple the right to oral arguments regarding pet custody, though the case was ultimately settled out of court. With the laws around pet custody uncertain, pet owners may wish to consult an attorney regarding their pets before, during and after marriage.

Source: The Daily Beast, “Divorce Is Going to the Dogs, Literally“, Keli Goff, June 20, 2014

Legal fees owed by ex-spouse of former Dodgers owner

Wisconsin residents dealing with concerns over property division in their divorce cases may be interested in reading about a June 24 judgment handed down in a case involving former Dodgers owner Frank McCourt and his ex-wife, Jamie McCourt. At the time of the couple’s divorce in 2012, Mrs. McCourt was awarded luxury residences that were purchased during the couple’s marriage of almost 30 years. She was also awarded $131 million without tax obligations. However, Mrs. McCourt later claimed that her husband undervalued the baseball team at the time of the divorce. The team sold in the same year for more than $2 billion.

A superior court judge ruled in the case in September, rejecting the claims. Mr. McCourt’s attorneys pursued repayment of their legal fees for contesting the challenge, an amount of nearly $2 million. Although Mrs. McCourt’s attorneys argued that these fees were excessive, the same judge ruled that language included in the divorce judgment is clear about the obligation of any party contesting the result to reimburse the other’s legal costs. The judge additionally noted that she was involved in the team’s operations and that she had access to and help from many attorneys and accountants prior to the settlement being completed.

As the judge indicated, the language of the divorce judgment denoted an intent to end the matter at that point, and the parties had the opportunity to consider the terms carefully. It is important to understand the implications of a divorce judgment before accepting it, and a party who does not understand the terms may want to seek the assistance of an attorney for clarification.

In some cases, there may be issues in which a spouse has not fully disclosed the value of an asset, resulting in a judgment that may later seem unfair. In such a case, an attorney may assist in exploring the options for pursuing remediation.

Source: ABC News, “Judge Favors Frank McCourt in Divorce Fees Fight“, Anthony McCartney, June 26, 2014

Divorce and division of property

Wisconsin residents may be familiar with a major aspect of divorce, the division of real estate. Numerous scenarios can present themselves when a divorce occurs. If a spouse wants to stay in the house and the vacating spouse wants the initial down payment returned, the property can be refinanced to come up with the money. If a house was purchased with a down payment of $100,000 and if only $60,000 can be raised to buy out the spouse because of a decrease in property value, one option is to make up the difference with gift funds, coming from family in most instances.

If a spouse is attempting to buy a house, and the spouse and ex are still legally married, a spouse can release interest in the transaction by signing a quit claim deed. As in most conflicts, keeping the lines of communication open between spouses means that amicable settlements are more likely to ensue.

It is important to monitor credit reports and make sure that debts fairly represent what is owed by each spouse. When there is much acrimony in a divorce, it may be advisable to consult an attorney. A divorce settlement has a long-term effect on a relationship and family, and even extended family, so in most cases, it is best to secure representation.

There is more to divorce than the division of property, and each divorce is unique. Rather than risk a fair and equitable settlement, a family law attorney can assess each element of the case and provide guidance. When there are alimony and child custody concerns, many assets, out of state property and pension plans, an attorney can assist a client to obtain the best settlement terms.

Source: Credit.com, “How to Divide Your House in a Divorce“, Scott Sheldon, July 09, 2014

How does community property work during divorce?

Wisconsin is one of a handful of states that observes “community property” law, which is a way for splitting spouses to deal with the tough task of dividing assets during a divorce. So what does community property mean, and how does it work?

Community property means that when a married couple splits their marital assets during divorce, each spouse is granted a 50 percent stake in each asset. There are slight variations in the specifics of the community property laws from state to state, but this the general rule of community property.

So then the next logical question is “what qualifies as community property?” Well, any asset you or your spouse acquired during the marriage unless it was earned as a gift or as part of an inheritance is considered community property. Your home, your income, interest earned on business ventures, furniture: all of it can fall under the umbrella of community property. However, any assets obtained after the date of separation do not count towards community property.

There are wrinkles to community property laws. For example, there have been cases where “semi” or “quasi” community property has been determined. This describes cases where property that was separate at the beginning of or during a marriage has become communal over the course of time.

Knowing that Wisconsin is a community property state, divorcing couples need to be prepared for this way of dividing assets and property. It can be a complicated process, but it doesn’t have to take you by surprise.

Source: FindLaw, “Community Property Overview,” Accessed Aug. 20, 2014

A few things to consider about prenuptial agreements

There was a time — and it wasn’t even that long ago — when prenuptial agreements were considered a taboo subject that few married couples should consider. The contract was seen as a couple thinking about divorce before they even said their vows, and even if it was something they wanted to consider, the general thinking was that only couples with significant assets should agree to a prenuptial agreement.

But the perception of prenuptial agreements has changed quite a bit over the years, and they are now viewed as important contracts for not only divorce, but also the health of the marriage as well. So what is a prenup? It is a contract that essentially creates new rules that pertain to your divorce (should one occur) instead of the ones that would apply without the presence of that prenup.

A prenup is also especially important in a community property state, like Wisconsin, where assets become shared marital assets once you tie the knot. A prenup can designate that certain assets (may they come about in the future, or may they be current shared assets) or exempt from the community property rules.

In addition, a prenuptial agreement can evolve and change as the marriage goes on. Just because you sign it before your wedding day doesn’t mean that the language contained within the contract will remain constant throughout the marriage. You can alter and update the prenup over the years, and you can even sign a postnuptial agreement to address new issues — or to generate a similar document to a prenup if you didn’t sign such a contract prior to your wedding day.

 

The pet custody problem, and how to solve it

When it comes to divorce, there are many major issues that come into play that the spouses are prepared for. There are also numerous major issues that spouses aren’t prepared for when they deal with a divorce. Somewhere in the middle of these two realms is pet custody, an increasingly prominent divorce issue that can often throw spouses for a loop when dealing with their divorce.

Pets usually fall under the distinction of property, which, right off the bat, makes the situation very complicated. Since a pet usually is considered property, it is not uncommon for the pet to be given to just one of the spouses in property division. Sometimes the spouses want it this way; other times they don’t.

A good way to avoid this dilemma is to agree to a pet custody agreement early in the divorce process. This nips the issue in the early portions of the divorce, saving you time, stress and anxiety, while also ensuring that you get to see your pet.

If a pet custody agreement can’t be reached, then a messy situation arises where the spouses may have to prove to a court why they deserve the “property” in dispute. The spouses would likely try to establish their case by showing receipts for pet supplies and training. They could also call on witnesses who have knowledge of the spouses’ relationship with their pet. Photos and other documentation can play a role as well.

Pet custody is a serious issue, and it really does behoove the splitting parties to consider a swift and amicable solution to the problem.

Source: USA Today, “Pets increasingly at center of divorce battles,” Cameron Saucier, Aug. 24, 2014