No really, you keep it: The one asset that neither party wants

In this time of recession and falling home prices, neither party wants to keep the house anymore. As this article illustrates, there are options to break the We Can't Afford the House deadlock. Word to the wise: simply quit claiming the house to your spouse does not get you off the hook for the mortgage. Make sure you are protected credit wise and against a possible foreclosure in the future.

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Lousy spouse? There's a website for that

In a previous post, I discussed why posting details about your divorce on Facebook is not a good thing. For those of you who just can't get away from blogging, there is a website where you can do so and attempt to remain anonymous. I say attempt because there is no way to keep information anonymous when you post it on the internet. For those of you in the middle of a divorce, keep in mind that anything you post can and, if located by your spouse or his/her lawyer, will be used against you in Court.

Legal disclaimers aside, the website is lousyspouse.com. Its mission statement is to provide support to anyone going through the divorce process. And this includes a forum for venting about everything divorce-related- including your attorney.

DO IT YOURSELF DIVORCE PART TWO: GATHERING THE ESSENTIAL FINANCIALS

In the first article about do it yourself divorce, I discussed what to do before getting started. The next step in the do it yourself divorce process is very important in deciding whether this is right for you.

Florida divorce law requires that parties getting divorce file financial affidavits and list all of their assets and liabilities. In order to draft a complete Marital Settlement Agreement, you need to know everything you own and everything you owe. This would include all bank accounts, credit card statements and retirement accounts. It is highly recommended in do it yourself divorce situations that you obtain current statements for each and every account that you and your spouse have, whether the account is in one or both names. In a do it yourself divorce situation, you and your spouse should be on good enough terms that you share this information with one another. All of this information must be listed on a financial affidavit and both parties must sign under oath that they have provided full disclosure to one another of all assets and liabilities and that the information provided is truthful and accurate. You will need this information to decide how you are going to divide your assets and liabilities.

Once you have a Florida financial affidavit and all information about your assets and liabilities, questions may arise. Is an asset or liability marital or nonmarital? How do you split credit card debt? What happens with a retirement account that began before the marriage? What about pensions and profit sharing? A divorce lawyer can advise you about whether an asset or liability is marital or non marital. This is one of the things that should be addressed in your initial divorce consultation. Credit card debt can be a tricky issue if both parties names are on a specific credit card and the debt is to be split. In a do it yourself divorce situation, you need to think about how you are going to divide this debt and how you will protect yourself and your credit if your spouse does not pay his or her share. When it comes to retirement accounts and pensions, you may want to consider hiring a financial professional to perform a valuation of the account, pension or profit sharing. You should also speak with your divorce lawyer about your obligation to divide these assets or your rights to a portion of these assets.

The Florida financial affidavit also requires that both parties list their incomes. What happens if you do not know your monthly income? This is a common question for business owners or those who are paid by commissions. In those situations, it is important to speak with a financial professional, such as an accountant, to get advise regarding how to calculate your monthly income. If you have questions about how much your spouse earns, you should address these questions with a divorce lawyer or an accountant.

These are just a few examples of questions and issues that may arise during the do it yourself divorce process. The financial portion of a divorce may be the most challenging aspect in the do it yourself divorce process. The important thing to keep in mind is that many decisions you make in this part of the process may be binding and non-modifiable so it is crucial that all of your questions are answered before you proceed. If you have questions or concerns about these or other financial aspects of your divorce, speak with your divorce lawyer or accountant before making any decisions about dividing property, assets and liabilities.

Yours, Mine and Ours

One of the most popular misconceptions I hear is about separate accounts. Many people seem to believe that by simply placing an account in their own name, it is non-marital property. I also hear the same rationale for debts, especially credit card debts. Many people seem to believe that, if a credit card is in the name of one spouse only, that debt belongs to that spouse. This is not always the case.

Under Florida law, a marital asset is anything acquired or enhanced during the marriage regardless of how it is titled. Basically, every dollar earned during a marriage belongs equally to both parties. If one spouse has a separate account and deposits his/her paycheck that was earned while the parties are married into that account, the account now has marital funds. Even if the account was opened prior to the marriage and was, at one time, a non marital asset, there is now an issue with commingling of the funds in that account. The same may be true for retirement accounts.

When it comes to credit card debt, just as money earned during the marriage belongs to both parties equally, debts that were acquired during the marriage are the equal burden of the parties. At least, this is the starting presumption. There are several factors that can affect whether the debt is marital and how it should be divided, and paid for, especially when it is in the name of one party and not both. And it is also important to keep in mind that, even if a Court Order or settlement agreement states that a party is responsible for a debt, this will not stop a creditor or collection agency from collecting from the party whose name is attached to the debt. If the debt cannot be transferred to the party who will be responsible for it, there must be some safeguard in place to protect the party holding the debt in case the other party does not pay.

The above is intended for general information purposes only and should not be considered legal advice. It is highly recommended to consult with an attorney before making any decisions or signing any settlement regarding the division of assets or liabilities.

The Seven Deadly Sins of Divorcing Men

Seven Deadly Sins of Divorcing Men

In the last article, I listed the seven common mistakes women make in the midst of a divorce. Men are also prone to errors that can have a lasting impact on their divorce settlements or lives beyond the final judgment. Below is a list of the seven deadly sins of men, or Dad’s, or Ex-Husband’s, whichever the case or appropriate label may be.

1. Fighting for principle: “I will go to court at all costs” and “it is the principle of the thing” are two statements I hear from male clients in negotiations gone south or cases headed to trial. While I never have and never would tell anyone to go against their principles, I caution divorcing clients about the price tag attached to their principles and whether the value gained is worth what is lost as a result. Anyone who finds themselves fighting for “the principle of the thing” should ask themselves what they are really fighting for and if the “at all cost” is worth it.

2. Underestimating child support expenses: Florida’s child support guidelines are supposed to be the anticipated amount each parent should contribute towards the support of their children. But I have seen few, if any Moms or Dads who feel the child support number is “just right” or even right at all. On Dad’s side, there is a common misconception that child support payments are used to fund the now extravagant lifestyle of Mom, rather than benefit the children. In the average household, this is simply not the case. In many instances, child support covers food, clothing, housing and all those little extras that come along, such as school field trips, projects, lunch money, etc. As all parents know, those expenses really do add up. Unless Dad is a professional athlete or celebrity, the guideline amount, while not exactly right in either party’s mind, will not allow Mom to purchase diamonds and firs.

3. The joint custody battle: Websites are devoted to this topic and it’s a popular question in my office as well. When Dad comes in and states that he wants joint custody, I always ask what that means to him. I then ask if he’s comfortable committing to living within a short distance from mom and the kids until they reach 18. In a good number of cases, rotating custody works quite well. But there are those who do not understand the concept or who think they are limited to either “joint” custody or being the “weekend dad”. Unless there are extraordinary circumstances to justify sole custody, Dad remains a decision maker, stays in frequent contact with the kids and continues to coach soccer, softball or any other activities he enjoyed with the kids, with or without “joint custody”. There are many alternatives in between the seemingly all or nothing positions and it is important that Dad know about and consider these options before taking a stance or declaring a “custody battle”.

4. Taking control: While more and more marriages involve equal income earners, or Mom’s outearning Dad’s, this is a popular mistake made by divorcing Dads in what are usually labeled “traditional marriages.” Dad is the breadwinner and decision maker. This Dad may not want to give Mom her share of assets or child support or alimony, whatever the case may be, as Dad believes Mom will not be financially responsible. This Dad forgets the Declaration of Independence portion of divorce- the concept that both parties live separate and free. Mom is responsible for herself, and the kids if the kids live with her. Courts do not allow Dad to monitor Mom’s spending and do not require Mom to account to Dad for this spending. The judge will impose this requirement and fighting for it is a sure way to lose.

5. The alimony dilemma: There are many alimony jokes for a reason. No one likes to pay it. This includes men and women, who are paying alimony more and more these days. But, in that “traditional” model again, its Dad paying alimony to Mom, or, in cases where there are no children, Ex-Husband paying Ex-Wife. Florida law provides guidelines for whether alimony will be paid. In some facts and circumstances, alimony is a given, and, in some of these instances, permanent alimony is guaranteed. I’ve had clients who would do anything to “buy out” this alimony obligation and some that just had to accept it as reality. In some financial circumstances, it is possible to make a lump sum buy out of alimony. The question is whether it is in the parties best interest. This, of course, depends on the facts and circumstances. The no alimony at all costs Dad/Ex-Husband should seek the advice of a trusted attorney to and, in many instances, an accountant, to find out the options or whether there are options in the alimony dilemma.

6. Separated and not equal: This, again, addresses the “traditional” situation of Dad as breadwinner. Dad worked and brought home the paycheck. Mom may have stayed home and raised the kids. Or maybe someone else raised the kids. Or maybe there were no kids and Mom, or, rather, Ex Wife, just stayed home. This Dad/ Ex Husband thinks that since he earned more than Mom/ Ex Wife that he gets a greater share of the assets. In the majority of cases in Florida, what was earned by the marriage, by Dad, Mom, Ex Husband, Ex Wife, interest, appreciation or otherwise, is marital and what is marital is divided equally. If Mom worked less than Dad, or Ex Wife did not work at all, spouses are equal partners in the marriage. Dad may hate it, Ex-Husband may hate it even more, but this is the likely outcome.

7. Not giving an inch to avoid the extra mile: This mistake is similar to the principle argument that can derail settlement or prolong a case beyond what may be necessary. There are often issues which are minor in the big picture but which become emotional sticking points. When clients negotiate, they are asked to give up certain things and make concessions in order to reach an agreement. What can happen is that Mom/Ex Wife is “sweating the small stuff” as discussed in the previous article and asking for one seemingly little extra that Dad/Ex Husband doesn’t want to give, if for no other reason than that Dad/Ex Husband feels he has already given too much. A fine example of a disagreement that isn’t worth the time spent arguing it is the division of frequent flier miles, which have minimal cash value. But when this one last request for ½ of the hard earned miles comes in at the end of a long negotiation, it may often turn into a sticking point and cause both sides to spend more money discussing the item than what its really worth. In some instances, there is greater value saved by giving in than the value that is lost by continuing to disagree.

Divorce is undoubtedly emotional and men and women, generally speaking, react differently in the face of the emotional crisis. While the reaction is understandable, the financial and prolonged emotional consequence can be avoided in some instances. The key to avoiding these mistakes lies in knowing when to advocate for something and knowing when to give in.