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Divorce and Money Topic #1 – Divorce is coming – what to do?

Divorce is coming – what to do?

(If you are divorced, please share your thoughts about divorce and money)

My wife and I have been married for almost three decades, and have never gone through a divorce, so I have no personal experience on this subject. However, I have counseled many couples and single people who have experienced divorce and money problems.  I am offering few pieces of advice to whomever needing to read this post.

Let me say this first: I AM NOT GETTING A DIVORCE.  AND I DO NOT advocate divorce. I believe a couple should stick with the vows they made when they were betrothed. When you walked up and the preacher said, “For better, for worse, for richer, for poorer,” and you get married, you’d be willing to take a bullet for her/him or you shouldn’t have married her/ him.

But divorce is a part of reality, and people are not perfect. Statistically, the number-one cause of divorce in North America is money fights and money problems. A study from Citibank found that 57% of divorced couples said money fights were the primary reason they didn’t get along. There are many other reasons for divorce other than money, including abuse, infidelity, addiction, socially unacceptable behavior, mental issue, etc, etc. The list is endless. But one common thread is that a divorce turns a marriage into a business transaction. If you are already heading for a divorce, or a divorce is in your past, there are things you can do before or after a divorce.

Before the divorce: If you seek pastoral and counseling help, and one or both is not willing to change, and the divorce is 99.9% final, then, and only then, I suggest the following:

  • Separate joint checking account into separate checking accounts.
  • Start re-titling joint possessions: credit cards, loans (mortgage, auto, home equity, family loan, etc.). Some of these will require refinancing, which may be very difficult, if one or both has bad credit score. In that case, selling the large asset may be wiser. You definitely don’t want to be burdened with your ex’s debt. I hear many horror stories in which the wife decides to keep the house owned jointly, loses income, and foreclosing, dragging both names down the credit score spiral.
  • Start building up your full emergency fund ($15,000 to $20,000) in a simple money market account so that an emergency does not turn into a big money problem later.
  • Any inherited asset, not comingled, stays with the recipient of inheritance. If comingled, then you need to be civil about how to divide it up.
  • Make sure that beneficiary names for various documents (will, durable power of attorney, insurance, 401(k), IRA, Roth IRA, annuities, etc.) are changed to reflect the proper names. If you plan to re-marry, you don’t want your insurance proceeds to go to you ex.
  • Prepare this year’s tax.  You will need to help each other on this no matter how much you dislike each other’s gut.

After the divorce is final: If you sat down with the divorce lawyer(s), came to mutually agreeable understandings about the split, and have signed all of the divorce decree, then do the following:

  • Be very careful that you don’t medicate all this pain you’re going through with spending. That would make you human, but it puts the wrong medicine on the wound. About 70 to 80% of the ladies that go through this process want to stay in their home, even if she can’t afford it. Take a good look at the house payment and see if it works.
  • Based on your divorce decree, move in the direction of two separate lives and negotiate on their COMBINED retirement fund, social security income, taxable assets and equities that exist between them.
  • DON’T make any LARGE purchases (over $500) unless you talk to someone you trust and will keep a cool head for at least 6 months. Don’t talk to ANY sales agents who try to sign you up for insurance, annuities, or IRA rollover, unless you’ve had a number of years of trusted transactions. You can always spend the money later when cooler head prevails. Don’t rush into any big purchase.
  • Keep the four walls intact: Food, shelter, utilities, and transportation. You will be busy enough to keep these walls upright. If money becomes tight, pay the four walls first, then medical, auto, home insurance premiums second, and unsecured loans very last (or not at all – if money runs out).
  • If you don’t have a budget, start one, the sooner the better.  Set aside money for the emergency fund and the four walls, and what ever is left over, pay down your debt.  The debt is what kills most divorced spouse’s financial life.

Next post will cover additional advice on divorce.

http://money.gather.com/viewArticle.action?articleId=281474979375533

The Divorce Process And Its Steps

Marriage is a bond that connects two partners together binding them in a life long relation which is sacred.This relation is hampered as a result of certain reasons which ends the bond between the two.Partners are emotionally hurt and eventually decide to divorce ending this sacred bond.Certain steps need to be followed so that they do not feel the emotional and financial stress.

The divorce steps are listed as follows

1.Filling the divorce papers and submission of these papers with the court clerk

2.Sending the petition to the defendant

3.The filling of defendant’s answer as well as counter-claim

4.The default legal procedures

5.Mediation process

6.Hearings with the presence of the lawyers

7.Trails

8.Issuing of final divorce decree

The divorce process starts with the plaintiff filing the complaint papers in the court. In case of contested divorce sometimes the other spouse is unaware about the filing of complaint. The petition needs to be sent to the defendant. As per the state divorce laws, the defendant has certain defined period of time to reply to the divorce notice. The defendant needs to reply to the petition within stipulated time period otherwise the divorce is granted in certain states. The defendant can reject the petition by not filing the answer or file a reply to agree so that the divorce process can proceed or file a reply with disagreement with reference to some points mentioned in the petition.

The court may ask for the divorcing partners to undergo mediation to save their marriage. The mediator would conduct several meeting with the divorcing partners to understand the reason of divorce and help them save their marriage. If the divorcing partners have children from their marriage, then the court may ask for counselling sessions for the children as well. It is vital to be aware about all the procedures that would be followed by the court, so that one can calculate the cost of their divorce and do not bear any financial loss. When the couple are opting for an uncontested divorce or property divorce it is the court which decides about the distribution of property between the spouses. To face the court hearing, one needs to hire knowledgeable divorce lawyers, who can understand their case and represent it in the best possible way.

The divorce process and its step may difficult for a layman to understand, but it is job of the lawyers to explain these details to their client. After the court estimated all the factors related to divorce, the court issues the final divorce decree.

http://www.streetarticles.com/divorce/the-divorce-process-and-its-steps

How to Get a Copy of Divorce Papers

The records of divorce are vital and will be required in the future after a divorce is granted.

The need to have a copy of divorce papers with you is to avoid problems later. The copiers are legal documents. Your divorce procedures are over only when a divorce decree is issued.

Besides the divorce decree is needed if you want to change your name after divorce in the documents like bank documents, driving license and the company documents. If you have to remove an ex-husband from the insurance policies and bank accounts, these documents may be needed.

In the divorce decree the issues regarding divorce are mentioned. These are important. The records of divorce are a proof of your legal separation from your partner and will be required if you want to marry again. So it is necessary to have a copy of the divorce records with you.

The records of divorce are obtained from the court which granted the divorce for you. It is not a big task to access the records of divorce. The lawyer responsible for the case will provide you the required documents. One copy will be given to the divorced couple. One copy will be kept with them. This is done for future reference. Sometimes the need may arise.

Private vendors who work online can also have easy access to the records of divorce and are able to send these documents online to people who request these documents. This is also an easy method to obtain a copy of divorce papers.

Another method of obtaining these papers is to visit the country court where the divorce was granted and obtain the required documents. The only thing is that the copy obtained thus is a paper and not an electronic copy. This method is preferred by many people because they are able to get a tangible copy.

However not all people are able to get a copy of divorce papers through the court. Only some are given permission to take the documents this way. For this they need to carry a copy of the court-order when they go to collect the documents. You are supposed to show them identification with two forms. These are the utility bills and a photo identity. Instead of the utility bills a government letter can be used.

No- fault divorces are different from the at-fault divorces. The latter occurs when the reason of the divorce is the actions by any one of the couple. The actions may be committing crime, adultery, lying etc.

So remember that the documents are important during various instances for your future life and don’t avoid them. They have to be maintained carefully. As you have realized now obtaining a copy of divorce papers is not at all difficult. The required information can be obtained from the internet and there are professionals to help you.

There can be situations when you do not have the records and you urgently require a copy of divorce papers. In that case you can get help from an online search.

http://www.infobarrel.com/How_to_Get_a_Copy_of_Divorce_Papers

Dealing with Jointly Owned Property in a Divorce – An Interview with Shari-Lynn Cuomo Shore

Married people not only share their lives emotionally and have children in common, but often, jointly own property and assets. Joint ownership of a home, for instance, can make a married couple feel connected to each other, like partners in life, even if one party contributed more financially to the house. However, given the high rate of divorce, this unity can often sour, and issues of jointly-owned property can make a divorce complicated and acrimonious.

The way jointly-owned property should be divided, or in some cases, held equally, after a divorce may vary according to the laws of particular states, who contributed more, if one spouse was “at fault” and other factors. Shari-Lynn Cuomo Shore, who has a practice at the Wolf & Shore firm in Hamden, Connecticut, has vast experience in settling issues of joint property prior to and after a divorce and discusses property issues that arise in divorce proceedings.

Many people think that, in a divorce, property is usually split 50/50, but this is not always the case. What are some cases in which the property should be split down the middle and cases when it shouldn’t be divided this way?

Shari-Lynn Cuomo Shore: While the general presumption is 50/50, the actual distribution of property depends on a variety of issues which may vary state by state. For instance, contribution to said property can affect the distribution, the length of time of the marriage, whether or not there is a prenuptial agreement (and whether that is valid) and whether a party is at fault for the marriage.  To clarify, many states are “no fault” marriage states, but if the dissolution proceeds to trial and evidence of, for example, an affair, or abuse surfaces, often the offending party is considered “at fault” and gets less than one-half of the marital estate.

One example where property would probably be split 50/50 is in the case of a longer marriage (say for example, 20 years or more), where either both parties worked throughout the marriage and contributed to the upkeep of the household, or even where one party worked full time but the other took care of the house, raised the children, etc.  An example of a case where the property may not be equally divided could be an instance in which one party entered the marriage with large amounts of money and enough furniture to furnish the entire house.  Even though those assets would become marital property at that point, if the funds were never accessed by the other party, or the furniture wasn’t used, desired, kept up, etc, by the other party, especially in a shorter marriage, the party who entered the marriage with the assets may also leave with such.  Of course, these are generalizations and each case must be analyzed individually.

Is it the best option to sell a jointly owned home and split the money from the sale? What if the couple wants to hold onto the home and jointly own a home after a divorce? How can spouses protect themselves if they jointly own property after a divorce?

SCS: In general, it is not in anyone’s best interest to own property with a person they have divorced.  While there may certainly be exceptions, people generally obtain a divorce because they cannot agree on major issues, have different viewpoints, etc.  Therefore, it would not be an intelligent decision to own anything together or have any type of investment/business venture in common.  Depending on the value of the house, the desires of the divorcing parties and whether or not there are children, selling a jointly owned home and dividing the proceeds may be the best option.  However, if there is very little equity in the house, or if one party desires to stay there, especially if it involves moving school age children versus keeping them in the same school district, it may be a better option for one party to retain the home. If this is the case, the party vacating the residence should either sell or quit claim his or her interest to the other party (again, depending on the equity in the home). And then if both parties are listed on the mortgage, the parties should agree on a short time frame in which the party retaining the home will be required to refinance so that the mortgage is then solely in his or her name. This will then prevent the party vacating the residence from having a debt/liability for a property in which he or she has no interest.

Do long-term separations complicate things in terms of property that is acquired during the separation but before the divorce?

SCS: A long-term separation may complicate division of property that is acquired during the separation period but before the divorce for a few reasons.  For example, separated parties often begin using separate bank accounts, hiding assets, etc.  The problem with this is that the parties are still technically married and thus, the property obtained (at least in most states) during this time frame is still a part of the marital estate, but the parties are more likely to fight for it and/or want to retain it individually.

If a couple still owns property after a divorce, are there legal problems that can arise when one party wishes to renovate or add onto the property? How is this dealt with?

SCS: While I would not recommend this option, yes, problems can certainly arise.  If for some reason, the parties decide to jointly own a property after a divorce, there should be sufficient terms in the divorce decree to address concerns such as renovations, additions and even the eventual sale of the property.  Essentially, if the parties cannot agree on these terms, if the divorce decree did not provide for them, or if they wish to do something other than what the divorce decree mandates, they would have to reopen the divorce with a post-judgment matter and ask that the court enter an order. Alternatively, some people seek mediation prior to going back to court to address these concerns and hopefully come to an agreeable resolution.

What are other issues about jointly owned property in a divorce that you see often? What are your thoughts as to the best resolutions?

SCS: There are all kinds of issues with jointly owned property that occur in a divorce, but there is not necessarily a best resolution, because it is all dependent upon the specific facts of the case.  We always tell our clients that the court is concerned only with the best interest of the children, not with what the parents want.  That being said, most attorneys, and nearly all courts, will not “litigate pots and pans.”  We advise clients that they should take a step back from the situation and try to view it as a neutral third party and really evaluate their priorities.  Sometimes, there are sentimental reasons for retaining property, sometimes there are financial and other times, it is simply to “get back at” the other party.  Once a client can assess the reasoning behind wanting to retain something, we can then help them figure out how they should fight for it and if it is, in fact, a priority.

Alex Levin is a writer for Seeger Weiss, a plaintiff’s firm specializing in consumer protection law.