Divorce: Everything You Need To Know But Were Afraid to Ask

Volume DIVORCE
1 EVERYTHING YOU NEED TO KNOW
BUT WERE AFRAID TO ASK

AVVO.COM PRESENTS

DIVORCE
EVERYTHING YOU NEED TO KNOW

BUT WERE AFRAID TO ASK

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Table of Contents
OVERVIEW ..................................................................... 6

THE TOP FIVE SIGNS YOUR MARRIAGE IS IN TROUBLE .......................... 7

BASICS ........................................................................... 9

NO-FAULT DIVORCE ................................................................................. 10

UNCONTESTED DIVORCE VS. CONTESTED DIVORCE ............................ 12

SIMPLE DIVORCE / SUMMARY DIVORCE BASICS ................................... 14

COLLABORATIVE DIVORCE ...................................................................... 16

DIVORCE MEDIATION............................................................................... 18

CHOOSING A LAWYER ................................................ 21

HOW TO HIRE A DIVORCE LAWYER ......................................................... 22

HOW TO PREPARE FOR (AND GET THE MOST OUT OF) YOUR FIRST

MEETING WITH A DIVORCE LAWYER ...................................................... 27

DOCUMENTS TO GATHER FOR YOUR ATTORNEY IN A DIVORCE ......... 31

BUDGETING AND ORGANIZING RECORDS DURING A DIVORCE.......... 33

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COSTS .......................................................................... 38

HOW MUCH WILL MY DIVORCE COST & HOW DO I SAVE MONEY ON

IT? ………………………………………………………………………………………………39

FIVE TIPS THAT WILL HELP SAVE MONEY ON YOUR DIVORCE ............. 43

HOW TO PREPARE YOUR FINANCES IN THE TIME OF DIVORCE ........... 47

DIVORCE AND TAXES ................................................................................ 52

PROCESS...................................................................... 55

PROPERTY DIVISION .................................................. 67

COMMUNITY PROPERTY DIVISION VS. EQUITABLE PROPERTY DIVISION

IN DIVORCE ............................................................................................... 68

WHAT IS NON-MARITAL PROPERTY? ...................................................... 71

DIVORCE PROPERTY SETTLEMENT: TIPS FOR PROPERTY DIVISION ..... 75

DIVIDING PROPERTY IN A DIVORCE: WHO GETS THE FAMILY HOME? 78

DIVIDING RETIREMENT PLANS IN DIVORCE .......................................... 80

DIVIDING A BUSINESS IN A DIVORCE ..................................................... 84

DIVORCE DEBT AND CREDIT ISSUES ....................................................... 87

UNDERSTANDING BANKRUPTCY AND DIVORCE ................................... 91

HIDDEN ASSETS AND DIVORCE ............................................................... 93

PAYING ALIMONY (SPOUSAL SUPPORT) ................................................ 98

ALIMONY PENDENTE LITE ....................................................................... 99

REHABILITATIVE ALIMONY .................................................................... 101

FACTORS AFFECTING SPOUSAL SUPPORT (ALIMONY) AWARDS ....... 104

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ALIMONY (SPOUSAL SUPPORT) MODIFICATION ................................ 107

ALIMONY (SPOUSAL SUPPORT) TERMINATION .................................. 109

CHILDREN AND DIVORCE......................................... 113

HOW TO TELL YOUR CHILDREN YOU’RE DIVORCING ........................ 114

WAYS TO HELP YOUR CHILDREN GET THROUGH A DIVORCE ........... 117

PARENTING PLANS ................................................................................ 123

HOW DO I CALCULATE CHILD SUPPORT? ........................................... 125

FAMILY LAW - RELOCATION WITH CHILDREN ..................................... 128

AFTER DIVORCE ........................................................ 132

ENFORCING YOUR DIVORCE DECREE .................................................. 133

APPEALING YOUR DIVORCE DECREE ................................................... 136

PARENTING CONSULTANTS POST-DIVORCE ....................................... 138

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Overview
Whether you're just starting the divorce process or you're in
the midst of a custody battle with your ex-spouse, we have
you covered. Here you'll find everything you need to know
about divorce, property division, alimony, and choosing a
divorce lawyer.

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The Top Five Signs Your Marriage is in Trouble
Written by: Nathan Templeton Anderson, Litigation Lawyer

1. You Dream of a Life Without Your Spouse
It is not uncommon for us all to wonder “what if”
during our day-to-day lives, but when you start
thinking about how your life would be better without
your spouse, you’ve definitely got a sign that your
marriage is in trouble.
2. You Keep Things to Yourself
I’m surprised at how often clients come in and tell me
that they simply quit communicating their needs and
concerns to their spouse. When your marriage has
reached a point to where it's not worth it to “bother”
your spouse with your concerns and needs, this is
another sign the marriage is in trouble. Open
communication is a key to any successful relationship,
and holding things back from your spouse is quite
unhealthy to the marriage.
3. You're the Only One Working on the Marriage
If you feel that your spouse is not putting the same
amount of effort into the marriage, then feelings of
resentment and anger can really kick in. Anger
sometimes fuels people to make rash decisions;

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however, feeling a lack of reciprocal effort is a definite
sign the marriage is on rocky grounds.
4. Your Marriage Lacks Intimacy
Sex is an important part of any healthy marriage. If
one spouse seems uninterested in sexual intimacy
with the other, this is a sign the marriage is in trouble.
Even more so, if one spouse is withholding sex as a
form of “revenge,” then this too indicates a storm is
brewing.
5. The Bad Outweighs the Good
This one ties in closely with all the other signs. If you
feel there is more trouble in paradise, then there are
some issues that need to be confronted.

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Basics
The kind of divorce you want and how well you and your
spouse can agree on issues will affect the choice to hire an
attorney, and what type of services you need from them.
Learn more about the different types of divorce and
determine which one is right for your circumstances.

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No-Fault Divorce
No-fault divorce is the most common type of divorce case,
and is available in all states except New York. A no-fault
divorce is one where the spouse seeking a divorce doesn't
have to prove the other spouse did something wrong, but
instead gives a reason recognized by their state, such as
irreconcilable differences.

Getting a no-fault divorce
If you are seeking a divorce, a no-fault divorce may save you
money as you do not have to sue your spouse and prove that
he or she caused the marriage to break up due to an issue
such as adultery or spousal abuse. However, some states
require the couple to live apart for a period of time before a
no-fault divorce can be granted.
If the couple agrees on how to divide their assets and
on alimony, child support, and custody issues, they may
save money by representing themselves, or by using a family
mediator to hammer out the details of their divorce. If there
is disagreement about these issues, you will want to get a
divorce lawyer to represent you in court.

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No-fault vs. fault divorce
In some states, you can still pursue a fault divorce, where the
spouse seeking the divorce must prove that his or her spouse
is at fault for breaking up the marriage. Typical grounds for a
fault divorce are cruelty, adultery, desertion, imprisonment
for a period of time, and inability to have sex if that wasn't
known before the marriage.

While no-fault divorce is far more common and easier to
obtain, some people choose a fault divorce. They may not
want to wait through their state's required separation
period. In some states, they may receive more of the assets
or more alimony by proving fault.

If you choose a no-fault divorce, your spouse cannot stop
the divorce. In a fault divorce, however, the spouse could
prevent the divorce by proving the charge against them is
untrue. The person accused of the fault could also stop the
divorce by proving that his or her spouse in some way
condoned or provoked the activities that put the spouse at
fault. An experienced divorce attorney can help you
determine which type of divorce is right for you.

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Where to file for divorce
Ideally, you will want to file for divorce in the state where
you live. All states require that you reside in the state before
filing for divorce there, though the length of residency
required varies from state to state. Divorce proceedings may
drag on for some time, so you will save on travel and lost
work time if the divorce court is near you. If you suspect
your spouse may file for divorce in another state, you may
want to take the lead and file in your home state.

Uncontested Divorce vs. Contested Divorce
When people think of divorce, many usually envision a nasty
battle in court over every last stick of property—even the
ugly wedding china no one really wants. However, what they
may not know is that approximately 90% of divorces are
uncontested. What this means is that the parties involved are
able to settle their differences without even going to trial.

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Uncontested divorces
In an uncontested divorce, the spouses reach mutual
agreement on relevant issues like alimony, child custody,
child support, and asset division. The court doesn’t get
involved because the two parties manage to settle all their
issues without litigation. Because of this, uncontested
divorces usually save significant time and money compared
to contested divorces.

Contested divorces
By contrast, two spouses go through a contested divorce
process when they’re unable to reach an agreement on
issues even after trying alternatives like mediation. When
this happens, the divorce case then goes before the court
where the judge (or jury) makes the final call on each issue.

Whereas having an attorney isn’t always necessary for an
uncontested divorce, getting an attorney for a contested
divorce is probably a prudent measure. This is because the
issues involved are usually complex and may involve
navigation of technical legal procedures. In general,
contested divorces tend to be much more stressful, take
much longer to complete, and also cost more due to attorney
fees.

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Simple Divorce / Summary Divorce Basics
If you want a divorce and you and your spouse have no
children and no property together, then you may want to
consider getting a simple divorce (aka summary divorce,
summary dissolution). A simple divorce is the cheapest type
of divorce and also the quickest to complete.

Requirements of a summary divorce
Each state’s laws may have slightly varying requirements for
a married couple’s eligibility for a summary divorce, but they
usually include some version of the following conditions:

 No children
 A short marriage (typically 5 years or shorter)
 Little or no property/debts owned together
 Total value of marital property is less than a certain
amount (usually about $35,000)
 Each spouse’s total separate property value is less
than a certain amount (usually same ceiling as marital
property)

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Benefits of a simple divorce
Benefits of a simple divorce compared to a traditional
divorce:

 Much cheaper. The costs usually only encompass the
filing fee, and minimal attorney fees if you hired
representation.
 Few or no court appearances. In some states a court
doesn’t require you to make an appearance at all,
whereas courts in other states may have you show up
just once or twice.
 Extremely quick. Since couples filing for a simple
divorce have no children and very little to no
property, a big portion of what usually takes up most
of the time in normal divorces is cut out. In some
states a simple divorce can be completely concluded
in about one month if all the paperwork is filed on
time.

Check with your specific state's laws to find out more if
you're interested in seeing whether you can get a
simple/summary divorce. If a simple divorce isn't
appropriate for your situation, then you may want to check
out information on uncontested divorce or contested
divorce.

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Collaborative Divorce
Collaborative divorce occurs when spouses and their lawyers
commit to negotiating a settlement agreement without going
to trial. This increasingly popular approach brings each
spouse and their specially trained collaborative lawyers
together in face-to-face meetings to work out their issues.
Often, a collaborative divorce is simpler, quicker to achieve,
cheaper, and less acrimonious than a traditional
divorce trial.

How collaborative divorce works
Each spouse hires his or her own lawyer experienced in
collaborative law. In a series of four-way meetings, the
lawyers facilitate communication between the husband and
wife regarding child custody, property distribution, alimony,
and other issues. Each party identifies its goals and
priorities and listens to the other's point of view.

Documents that clarify issues are disclosed to ensure
complete transparency. The spouses and their lawyers work
as a team to solve problems and brainstorm solutions until
they reach a mutually beneficial settlement agreement. This
agreement is put in writing and presented to a family court
judge for signature and inclusion in the final divorce decree.

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If the husband and wife fail to reach a settlement and the case
goes to court, the collaborative lawyers are legally bound to
withdraw from the case. Each spouse will need to hire new
lawyers for litigation.

Collaborative divorce versus divorce mediation
The critical difference between collaborative divorce
and divorce mediation is that a mediator can't provide legal
advice. A mediator helps spouses identify issues, examine
options, and reach resolution without advocating for either
side. If either spouse needs advice in regard to a particular
issue, they must turn to a lawyer.

However, both mediation and a collaborative approach help
reduce the emotional strain of divorce and keep decision-
making in the divorcing couple's control. They create
conditions where a couple can continue to have a civil
relationship. This is especially important when divorcing
couples have children and plan to share custody.

When to get a collaborative divorce
A collaborative divorce is a good option if both you and your
spouse are committed to working together. If one party
refuses to share important information, or is unwilling to be
open and flexible, a collaborative divorce won't work.

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Furthermore, if there is a history of abuse, serious mental
illness, or financial misconduct, a collaborative divorce isn't
an option.

Divorce Mediation
In some states, divorce mediation is an alternative to going
to trial to decide the issues of a divorce. In others, divorce
mediation is required before a divorce trial can begin. In
divorce mediation, a mediator meets with a husband and
wife and acts as an impartial third party to facilitate an
agreement. Often, mediation is a quick, less costly way to
resolve disputes and reach a mutually beneficial outcome.

How divorce mediation works
In divorce mediation, couples choose a mediator (or the
court appoints one) to discuss their cases. The mediator is
often a lawyer or retired judge, but is not required to
be. Over a single or several formal sessions, the mediator
meets with the husband and wife separately or, at times,
separately with the husband and wife and their lawyers. The
mediator helps each party clearly define their issues and
priorities and freely express their emotions and points of
view. Each party presents documentation that clarifies and
substantiates his or her issues. The mediator then

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encourages both parties to identify common goals,
brainstorm options and accept compromise.

The husband and wife evaluate their options and decide
upon workable solutions. The process concludes with a
written mediation agreement, sometimes called a
Memorandum of Understanding, which outlines all the
details that the mediation has covered.

It's important to note that a mediator tries to guide couples
to reach an acceptable settlement. He or she does not give
legal advice or make decisions for the couple. Both the
husband and wife should have their lawyers review the
mediation agreement before signing it. Once it's signed, the
court uses the mediation agreement to create the final
divorce settlement.

Benefits of divorce mediation
With divorce mediation, the husband and wife have control
of the major decisions that affect their post-marriage life.
Litigation, on the other hand, leaves the decisions up to the
court. In states that do not require divorce mediation, many
couples still choose it in order to bypass the uncertainty and
costs that come with litigation.

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Divorce mediation doesn't simply decide who gets what. It
takes into account the unique issues that underlie the
couple's conflicts. The process is intended to resolve
differences and create a situation where a relationship can
continue. This is especially important where divorcing
couples have children and plan to share custody. In fact,
many state courts mandate mediation in child custody
disputes.

When to seek divorce mediation
If your state does not already require divorce mediation, it
may be a wise choice if you and your spouse seek joint child
custody, or agree about parenting issues, and plan on a fair
distribution of property. Divorce mediation creates a less
adversarial environment for your children and helps you and
your spouse put together a co-parenting plan based on
mutual interests.

Divorce mediation is also recommended after a divorce has
dragged on for some time, to reduce additional costs and
delays.

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Choosing a Lawyer
If you've decided that you need a divorce lawyer, you may
want to check out these tips. Find out how to choose a good
divorce attorney, get the most of your consultation, and
what documents to prepare for meeting with your lawyer.

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How to Hire a Divorce Lawyer
Written by: Marshall William Waller, Divorce / Separation Lawyer

I’m Thinking about a Divorce: What Do I Do Now?
Developing a plan of action for handling your divorce is not
all that hard to do. Sit down with a pad of paper and list the
issues that you feel you will be dealing with during the
divorce. The major issues are: child custody, child support,
spousal support (alimony) and property division. Do you and
your soon-to-be ex-spouse agree on any of these issues?
The more you agree upon the less there is to fight about, and
the less there is to fight about, the less costly the process
will be, both financially and emotionally. On the issues where
you have agreement, write down in simple and clear terms
exactly what you and your spouse agree on. Don’t leave
anything out; if you wonder whether or not a detail is
important, it is.

Should I Hire an Attorney Or Should I Go it Alone?
If you are financially able to afford an attorney, you will
almost always be better served by hiring a professional to
represent your interests than by trying to do it yourself. This
has nothing to do with your ability to learn the information
and procedures needed to present your case. Indeed, many

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attorneys who find they getting a divorce do not represent
themselves, not even the divorce attorneys.

I Don’t Know Anything about Attorneys. What Kind of
Attorney Should I Hire?
Most people spend more time buying a new car than they do
picking out an attorney to represent them in one of the most
emotionally trying and difficult times of their lives. You
should first gather up all the information and personal
referrals you can from friends, family, co-workers and other
people who went through the same thing that you are about
to go through and who were happy with their attorney.

Next, research and review the qualifications of attorneys in
your area on the Internet. Then, go out and interview
lawyers. Make sure the attorney practices in the area of
Family Law. Be aware that some lawyers these days advertise
themselves as being the “best lawyer” or “super lawyers,” but
these self-aggrandizing titles have the potential of creating
an unjustified expectation about results the lawyer can
achieve.

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Should I Go to War with My Ex-Spouse?
A divorce should not be a war. The quickest way to burn
through your savings, your children’s college funds, all of
your assets, and everything that you have worked so hard for
throughout your life, is to go to war with your spouse. It is
such an easy thing to do; many good and decent people are
drawn into that without even realizing what is happening. It
is said that criminal lawyers see bad people at their best and
family lawyers see good people at their worst. Don’t be one
of the good people who end up behaving “at your worst.”
Nobody will win, except the attorneys.

What Is a Certified Family Law Specialist?
Not every family law attorney is a Certified Family Law
Specialist, and depending on the complexity of your case,
you may not always need a specialist. Certification requires
extensive education and experience in the field of family law.
In California, to become certified as a Family Law Specialist
by the Board of Certification of the state Bar of California, a
lawyer must pass a second specialized bar examination in the
subject area. They must demonstrate that they have a certain
level of experience handling a sufficient number of family law
cases with varying degrees of complexity.

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It normally takes years of family law practice for an attorney
to acquire the experience of the various types of family law
cases required by the Board of legal specialization. Theuy
must also undergo a positive peer review process and
maintain a minimum number of hours of continuing
education in the family law field.

What Can I Expect at the First Meeting with the Lawyer?
This initial consultation gives you both the opportunity to
screen and evaluate one another. You need to have a sense
of trust and confidence in the attorney.

Don’t be afraid to ask questions: Where did you go to school?
How long have you been practicing this kind of law? Do you
know my spouse? Do you know my spouse’s attorney? How
many of these cases (like yours) have you handled? Do you
have any specialties or specializations? What percentage of
your practice is devoted to family law? How many family law
cases have you taken to trial? How many have you won? (As a
point of personal observation, be wary of the attorney who
says he or she has never lost a case. That usually means they
are not taking very many of them to trial). Have you ever
been sued for malpractice and, if so, why? Has anyone ever
filed a complaint against you with the state bar?

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What Should I Expect Regarding Fees?
This initial consultation gives you both the opportunity to
screen and evaluate one another. You need to have a sense
of trust and confidence in the attorney.

Don’t be afraid to ask questions: Where did you go to school?
How long have you been practicing this kind of law? Do you
know my spouse? Do you know my spouse’s attorney? How
many of these cases (like yours) have you handled? Do you
have any specialties or specializations? What percentage of
your practice is devoted to family law? How many family law
cases have you taken to trial? How many have you won? (As a
point of personal observation, be wary of the attorney who
says he or she has never lost a case. That usually means they
are not taking very many of them to trial). Have you ever
been sued for malpractice and, if so, why? Has anyone ever
filed a complaint against you with the state bar?

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How to Prepare for (and Get the Most Out of)
Your First Meeting with a Divorce Lawyer
Written by: Monica H Donaldson Stewart, Divorce / Separation Lawyer

Prepare a list of questions in advance.
Before your appointment, prepare a list of questions
regarding your situation. The most frequently asked
questions we encounter are 1) How long will this take; and 2)
How much will this cost. Do not be afraid to ask any
questions, even if you think they are silly or minor. Be
prepared that the attorney may not be able to answer all of
your questions immediately. Many of the answers will
depend on the information you provide. You may not like all
of the answers you receive. If you get the sense that an
attorney is only telling you what you want to hear, it is
probably not the right attorney for you.

Take some time to review your finances before your
appointment.
If you have been the spouse to maintain the household
finances, make sure you have a general idea of your marital
assets (e.g. house, cars, bank accounts, retirement accounts,
stocks/bonds, etc.) and marital debts (e.g. credit cards,
personal loans, lines of credit, mortgage(s), etc.). If you have

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not had access to this information, your attorney can request
that the other spouse provide the information. Try to gather
details regarding both party's incomes (e.g. copies of
paystubs, prior years tax returns, etc.).

Finally, be prepared to discuss a budget of what your
combined household expenses have been vs. what you
anticipate your expenses will be after separation. Do not
hold back information - an attorney cannot effectively
represent you without full, accurate information.

Arrive a few minutes before your appointment is scheduled
Usually, attorneys will expect you to complete intake
paperwork prior to the start of your appointment. If you can
request this paperwork in advance, you can save some time.
Otherwise, arrive early and make sure you have basic
information such as both parties' full names, contact
information, employment and income information, dates of
birth and social security numbers. Further, if you have
children, you will need their names, dates of birth, and
addresses for the past 5 years.

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Bring any paperwork that has been filed
If you have already been served with paperwork, bring it with
you so your attorney can review it and provide you with
specific information rather than having to speculate based
on what the papers "might" say. Further, if you have been
served, make your appointment as soon as possible. There
may be deadlines for responding to the paperwork and if you
fail to meet the deadline, your rights may be affected.

Ask your attorney to discuss a budget for your case
Unless you are quoted a fixed/flat fee (unusual in divorce
cases), it is impossible at the first meeting for an attorney to
definitively say how much the case will cost. Every case is
different, and there is no way to predict how complicated a
case might become. Nevertheless, there are certain steps
that will occur in any divorce action, and your attorney
should be able to give you a sense of how much time should
be involved in each of these steps. If you have limited
resources, be sure to make this clear to your attorney so you
can have the "money" conversation before it becomes an
issue down the road.

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If you don't get a good feeling, this is not the lawyer for you.
You must feel comfortable with the person you choose to
represent/advise you. Your attorney will know everything
about your life and will be counseling you on how to conduct
yourself during the course of your case and beyond. No
matter how highly recommended someone comes, if you
don't think it is a good "fit," move on to someone else.

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Documents to Gather for Your Attorney in a Divorce
Written by: Alan Scott Funk, Divorce / Separation Lawyer

Here is a list of the main source documents used in a divorce:
1. Real property records.
o Local address
o Legal description
o Copy of the most recent real estate assessor's
statement
o Information as to any outstanding mortgage,
deed of trust or real estate contract
o Exact name(s) in which title is held
o Estimated value of property
2. Bank records
o All bank accounts of either party or businesses
owned by either party
3. Tax returns and supporting documents both personal
and business
4. Pay stubs, W2, K1, 1099
5. Balance sheets and profit / loss statements for self-
employed, or parties with ownership interest in a
business
6. Contracts showing right to income in the future

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7. Investment account records with sufficient
information to assess tax consequences of sale of
stock after award. If tracing is an issue, continuous
records without a gap are necessary
8. Promissory notes, including those showing obligation
and those showing right to income
9. Purchase / sale agreements - car
10. Statements for retirement benefits, and copy of
Defined benefits plan, or other documents describing
rights

11. Shareholders agreements, and other corporate
documents for closely held businesses
12. Lists, loan applications, or other documents showing
assets owned by either party
13. Present and prior Wills
14. Trust instruments with party either grantor, trustee
or beneficiary
15. Gift tax returns (all)
16. Credit card statements
17. Real and personal property tax bills
18. Deeds to property

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Tips for Budgeting and Organizing Records
During a Divorce
Written by: Constance Pifer Brunt, Divorce / Separation Lawyer

Divorce can be a very stressful and confusing time. Being
organized and gathering the information needed to make
educated decisions is critical. This transition can also be
financially challenging, requiring preparation for the
necessary budget adjustments.

Gather Important Records
When contemplating or beginning a divorce process, one of
your most important tasks is to gather the records and
documents that will help develop a complete picture of your
family’s financial situation. In order for you to make solid
long-term decisions about the distribution of assets, the
payment of debts and management of the family’s cash flow,
it is critical to have comprehensive, accurate and current
information.

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What Records Will I Need?
Although each family’s situation is unique, here are some of
the more common records that should be accumulated:
 Income tax returns for the past 3 years
 Most recent paystubs
 Employment contracts
 Statements of employment benefits
 Current statements for all retirement plans and IRAs
 Copies of all stocks, bonds, savings bonds, CDs,
options, employee stock ownership plans, etc.
 Current statements for all bank or credit union
accounts, investment accounts and mutual funds
 Life insurance policy declaration pages & current
statements of value
 Deeds to all real estate
 Current statements for all debts
 Vehicle titles and registration documents
 Homeowners and auto insurance policy declaration
sheets
 Current financial statements, tax returns, partnership
or shareholder agreements for businesses
 Any prenuptial agreements

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What About Personal Papers?
In addition to financial documents, you should locate and
secure in a safe place these important personal papers:
 Birth certificates for the entire family
 Social security cards for everyone
 Marriage license or certificate
 Military paperwork
 Passports
 Wills, trusts and other estate planning documents
that have been created

Get Your Budget in Order
Separating or divorcing families almost always experience
significant financial strain as they restructure into two
separate households. Lifestyles of intact families are usually
premised on a single household, often with two incomes. The
addition of extra expenses for a second residence can
uncomfortably stretch the family’s resources.

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How Can I Prepare For The Financial Transition?
Here are some ways to prepare for this transitional period:
 Develop a budget, listing all expenses. Reviewing
credit card statements and check registers for the last
year can help in this task.
 Cut non-essential spending by identifying expenses
that can be reduced, eliminated or postponed.
 Examples might include dining out, clothing
purchases, gym fees, and entertainment expenses.
Try to pay cash for any purchases, reducing credit
card use.
 Identify your fixed, necessary expenses such as rent
or mortgage payments, car payments, utilities, food,
medical insurance and expenses, etc.
 Review all outstanding debt to see if some can be
eliminated or minimized by transferring balances to
lower interest-rate credit cards or loans.
 Try to accumulate a cash reserve. This can be a
lifeline if you lose your job or have difficulty receiving
support payments. It will also help you fund the cost
of divorce proceedings and prepare for a secure
financial future.

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Summary
Separation and divorce can be a scary time emotionally. It
can also be a very financially challenging lifestyle change.
Preparation and thoughtful budgeting can ease the
transition. It is also important to seek legal advice as early as
possible to avoid costly mistakes and to help you to plan
most effectively for this huge change in your life.

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Costs
To most people, divorce can be painful not just emotionally,
but also financially. Below you'll find a wealth of information
on how to manage your divorce costs. Discover great tips
such as how to keep your legal fees from breaking the bank
and how to get your finances in order at the time of divorce.

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How Much Will My Divorce Cost AND How Do
I Save Money On It?
Written by: David Alexander Browde, Divorce / Separation Lawyer

How Do the Charges Work in a Divorce Case?
Lawyers in divorce cases work for an hourly rate, usually
billed in tenths of an hour. That's because most states do not
allow any other form of compensation - contingent fees in
divorce cases are usually prohibited by state law. Atop your
lawyer's fee will be fees charged by the Court - these vary by
state but usually are less than $500 even in the most bitterly
contested divorce cases. In New York there is an Index Fee
(currently $210) at the start of the case, and several other
fees along the way, including separate fees for the Request
for Judicial Intervention ($95), the Note of Issue ($30) and
any motions along the way ($45 each). Think of these fees as
tolls taken by the State Court system as your case travels
through the courthouse. In a truly uncontested divorce the
Court fees may total as much as the fees you pay your
attorney. In a contested case the legal fees will be the largest
factor in the cost.

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How Expensive Should My Lawyer Be?
Lawyers charge fees based on their experience and upon
what they think the market will bear. Depending on where
you live, lawyers who work on divorce cases usually charge
hourly fees that range anywhere between $150 and $1100 -
no kidding, there are top level divorce attorneys who can and
do charge well above one thousand dollars an hour. Your
next question will likely be "Can you tell how good an
attorney is by the amount they charge?" The answer is what
you'd expect: no. In choosing an attorney you should look
not just at the hourly rate but at how efficiently they work,
what their reputation is and, most importantly, whether you
can communicate effectively with the lawyer. Does the
attorney understand your situation? Has he or she dealt with
these issues before? Do the solutions and tactics being
proposed make sense? Are they likely to be cost effective?

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What Drives the Cost of the Divorce?
What drives divorce costs dramatically higher is one thing
and one thing only: disagreement between the parties. If the
husband and wife can agree on the key issues, such as
grounds, custody, child support and property division, all
that remains is drafting of documents. But when there are
battles, negotiations, debates - all those things take time.
And as noted above, the lawyers are charging by the tenth of
an hour. So, if both sides are represented by attorneys (and
they should be!) a debate over who gets to keep the painting
in the living room or Aunt Sally's wedding present can
quickly become far more expensive than the painting or
buying a new toaster oven. That's not to say that key issues
and disagreements shouldn't be fought out - either in
negotiation or litigation - but simply a word to the wise. It
often makes sense to settle economic issues rather than
litigate them.

Why Can't My Lawyer Tell Me Now How Much it's Going
to Cost?
A good question, with a simple answer. Your lawyer can't
predict what the other side is going to do. If there's reason
prevailing, issues can be resolved inexpensively. However, if
emotions are running high (and, understandably, they often
are in divorce cases) then there can be bumps in the road to

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your divorce. Each of those bumps can cause delays and
increase costs, as issues come up that have to be resolved,
delaying resolution of the case and adding to the legal fees.

What Can I Do to Keep My Divorce Costs Down?
This could become a guide all by itself, but the primary
points to remember are:

1. Be organized. Your lawyer will need documents and
information in order to negotiate and prepare your
divorce. If you have that information available, you
can save time and money.
2. Try to control your emotions. Divorce is a difficult
thing for many people, but try to see this aspect as a
business deal. You've already dealt with the
emotionally difficult issue of breaking up. Now you're
just dividing the dishes.
3. Be reasonable. Litigating issues is expensive. If you
can reach an agreement, do so. Save the fights for the
really important things.

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4. Communicate honestly with your lawyer. Ask
questions when you have them. But make sure you've
given accurate answers to the lawyer's questions, in
order to avoid expense and delays when the other
side comes up with something that surprises your
attorney.

Five Tips that Will Help Save Money on Your Divorce
Written by: David Alexander Browde, Divorce / Separation Lawyer

Divorce is almost always a painful experience. But you can
limit the pain to your finances if you remember one basic
principle: your lawyer is working on an hourly basis. That
means that to save money you will want to minimize the
number of hours the lawyer spends working on your case.
Your mileage may vary, and some of the suggestions in this
guide may not be appropriate for your case. But for most,
these guidelines will steer you away from the pitfalls that can
result in extra expense on the way to escaping a failed
marriage.

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1. Be organized
Organize your personal information in advance. Have the
statistical information ready: full names of adults and
children, social security numbers, dates and places of birth,
date and place of marriage, whether it was a civil or religious
ceremony. If you have all this information in advance, your
lawyer will be able to plug it in to the multiple places the
statistical stuff is needed as you move towards your divorce.
Get your tax returns and other financial information ready. If
child support or spousal support is at issue you'll need up to
three years of tax returns as well as your most recent check
stubs to show current income.

2. Control your emotions
Divorce is a difficult thing for many people, but tries to see
this aspect as a business deal. Sure, you'll have to deal with
the emotionally difficult issue of breaking up. But try to deal
with the legal aspect as just dividing the dishes. Think of this
as #2-A: be reasonable.

Litigating is expensive, so you should always try to resolve as
much as you can with your spouse before bringing in the
lawyers. If you can resolve issues like custody, visitation and
holiday schedules, property distribution or grounds for a
divorce, you're cutting down on the time it will take to finish

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the negotiations the lawyers will be doing. Remember, when
the lawyers are negotiating, the clock is ticking – at least
double time. The lawyers can help you get past issues on
which you disagree, but if you're arguing over little things,
the cost of the argument will be more than the cost of
replacing whatever wedding present you think you should
have.

3. Unless you need instant answers, e-mail your attorney
with questions rather than asking them on the phone
That way you'll get a complete answer that you'll be able to
absorb at your own pace, rather than trying to take notes on
a conversation and perhaps having to repeat things that you
don't understand when they're spoken rather than written.
Don't let your lawyer get caught by surprise. That means
don't be embarrassed, tell your lawyer the unvarnished truth
about everything you're asked. The attorney won't be judging
you, but you and the attorney will be the losers if the other
side contradicts something your attorney has put forth as a
fact.

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4. Try to limit the amount of hand holding you need
Of course divorce is an painful process, an emotional
rollercoaster. You'll need to talk to your lawyer about any
number of important issues. Ask questions whenever you
have them, and don't be shy about making suggestions if you
have them. But if you can get your emotional support from
friends rather than your attorney, you can save significant
amounts of money.

5. Above all, remember, you can be penny wise and
pound foolish
Saving money on legal fees isn't a good idea if the result is a
bad outcome. But if you can use some of these suggestions
you'll find that your legal costs are lowered substantially over
the course of a contested divorce.

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How to Prepare Your Finances in the Time of Divorce
Written by: Maury Devereau Beaulier, Divorce / Separation Lawyer

Close Joint Accounts
If a divorce is imminent, you should immediately contact
joint-credit-card companies in writing to freeze or cancel
your joint accounts. You do not want to be responsible for
your spouses' new credit card charges, particularly when
those charges may include attorney's fees. This protects
your credit. It is important to remember that, although a
creditor may freeze a joint account, the outstanding balance
must be paid off before the account can be closed.

You may also wish to close your joint bank accounts. If any
proceeds are removed, keep a carefully accounting where
the money is placed or how the proceeds are spent. You will
undoubtedly be asked for that accounting as part of the
divorce process. You can save yourself time and money by
keeping accurate records.

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Establish Your Own Credit
Make sure your name is listed on all household accounts and
investments. Establish at least one credit card in your own
name. This will help to create an individual credit history.
When you are on your own, you will have a better chance
qualifying for loans, mortgages and credit cards. These are all
important considerations after a divorce.

Keep Non-Marital Assets Separate
Non-marital assets are not part of the assets divided in a
divorce. Instead, they are considered the asset of either the
husband or the wife and generally awarded to that person in
a divorce proceeding. Categories of non-marital assets
include: property you inherit; proceeds from personal injury
awards (eg. Worker's compensation or accident proceeds);
items owned prior to marriage; and gifts to one party rather
than the family.

If non-marital assets are commingled with assets purchased
or improved during the marriage, it may not be possible to
claim the asset as yours in the event of divorce. However,
some "tracing" of non-marital assets may be possible. For
example, if a non-marital asset is sold during the marriage
and the proceeds from the sale are used to purchase another
asset, it may be possible to "trace" a non-marital interest in

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the new asset. For example, if a car owned before a marriage
is sold during the marriage and the proceeds are used to buy
a new car.

Review Your Financial Holdings Regularly
Maintain complete and separate records of your financial
holdings such as bank accounts, IRA's, 401K, land purchases,
and stocks. This includes assets in your spouse's name as
well. You may wish to maintain copies of these records at
your place of employment or in a safety deposit box in your
name. Records have a way of disappearing after a divorce has
been started.

Time Your Divorce
The timing of your divorce may carry with it a significant
financial impact. For example, in a single income family, the
non-working spouse may not have earned enough money to
qualify for Social Security at the age of retirement. However,
if spouses are married at least 10 years and don't re-marry,
the non-earning spouse may qualify for Social Security
benefits based on the ex-spouse's earnings when both reach
the age of 62.

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Video Tape Assets
You should photograph of videotape the contents of your
home including any garages, sheds or out buildings, to
record the assets and fixtures contained in each. In any
divorce, it is possible that one party may be required to
relocate from the family residence. Once you relocate, it may
be difficult to recall all of the assets and furnishings that are
contained in the house. If you forget them, there is a good
chance that they won't be factored into the values that each
party receives in the property settlement.

Don't Leave the Marital Residence
In a custody case, leaving the marital residence may impair
your ability to successfully seek custody of the children or an
award of the real estate after the divorce. By relocating, you
create a sort of status quo that courts are often reluctant to
disturb.

Freeze or Cancel Joint Credit Cards
If a divorce is imminent, you should immediately contact
joint-credit-card companies in writing to freeze or cancel
your joint accounts. You do not want to be responsible for
your spouses' new credit card charges, particularly when
those charges may include attorney's fees. This protects
your credit. It is important to remember that, although a

50

creditor may freeze a joint account, the outstanding balance
must be paid off before the account can be closed.

Collect Information Related to Children
In any case that involves children, custody disputes are a
distinct possibility. As a result, documents relating to your
children may be critical to support your contention
regarding medical issues, care during the marriage, or who
was the parent providing their primary care.

Some items you may wish to obtain or retain include: Family
photographs including those depicting family vacations or
the children's extracurricular activities; Social Security,
Student Body, and State ID cards; Medical records and
prescription information including the names and addresses
of any treating physicians or counselors for the children or
the parties; Report cards and school records.

Hire an Experienced Divorce Lawyer
It may be very important to hire a good lawyer early in your
divorce planning process. An experienced attorney can help
you avoid mistakes that could later cost you in your divorce
proceeding. By choosing an attorney early in the process,
there is less of a chance that you will be caught off guard and
wind up playing catch up on the issues. There are many

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lawyers to choose from so it is important that you ask
important questions in order to choose one that is
knowledgeable and right for you. Ask about their experience
in family practice and specifically divorce. Ask the attorney
to explain the legal issues as well as the legal process in your
particular county.

Divorce And Taxes
Written by: Mary G. Commander, Divorce / Separation Lawyer

Transfers Between Spouses
Under the general rule, transfers of property between
spouses and former spouses is not a taxable event if it is
"incident to the divorce". If the transfer is NOT made
pursuant to a written separation/divorce agreement or
decree OR the transfer takes place more than 6 years after
the end of the marriage, there is a rebuttable presumption
that it was not related to the cessation of the marriage. The
burden then would shift to the taxpayer.

Spousal Support (Alimony)
Under 26 U.S.C. Section 71, spousal support is taxable income
to the payee, and a deduction to the payor. Certain
requirements must be met: It must not be designated as or in

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reality be "child support"; it must be received by or or behalf
of the payee; it must end on the payee's death and it must be
payable under an existing agreement or order. The parties
cannot file a joint tax return, and they cannot be members of
the same household.

House Payments
Especially in temporary orders, one party may be required to
make payments on the former marital residence while it is
occupied by the other party. If the payor spouse is the sole
owner of the house and is solely liable on the mortgage that
he is paying, then he cannot deduct the payment as spousal
support. If both parties own the house and are liable on the
mortgage, one-half will be treated as spousal support. If the
payee owns the house the mortgage payments are spousal
support.

Attorney's Fees
Attorney's fees that are incurred to obtain or defend spousal
support are deductible. If a party is required to pay the other
party's attorney's fees as "spousal support", these fees are
deductible. It may be necessary to segregate out which
amount of an attorney's bill relates to spousal support for tax
purposes.

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Tax Refunds
Nothing is held hostage so often in divorce cases as the
income tax refund check. Generally speaking, just because
the parties file a joint return does not mean that they are
entitled to share equally in the refund amount. Instead, this
is determined by the income earned by each as if they filed
separate returns.

Dependents
The custodial parent is the one who can claim the child(ren)
as a dependent. This can be given to the other party by
execution of IRS Form 8332. If both parents claim the child,
you WILL be audited.

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Process
Most divorces tend to follow similar procedures. Check out
the Legal Guides below to learn what to expect in the
divorce process from beginning to end, both inside and
outside the courtroom.

Just keep in mind that there may be some variation in the
process across different states. This is because the divorce
process is dictated by the laws of the state in which you file
for divorce.

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The Complete Divorce Process

Cases vary state to state
The length of your case may depend on the state and county
that your case is filed in. It often depends on how crowded
the court docket may be and often may take a year or more
for your case to get to trial.

Jurisdiction
Before a divorce is filed, you must determine where the
matter will be heard. Different states have different rules for
bestowing jurisdiction. In many states, a party must have
lived in that state for 180 days prior to filing. If there are two
possible jurisdictions, it may benefit the party filing to serve
the Divorce documents first to choose jurisdiction in their
state. That is the primary benefit of serving and filing first.
There is little benefit to serving and filing first other than to
prepare in advance and to choose the jurisdiction.

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Summons
A divorce case is usually commenced by serving on the other
party a Summons and Petition for Divorce or Legal
Separation. In some states, a divorce is also called a
Dissolution of Marriage. Service in most states must be
complete by actually personally serving the other party or a
person who resides in their home who is considered to be of
suitable age and maturity.

In most states, a party may not serve their own divorce
papers. The Summons is a generally document announcing
that a divorce or legal separation action is being
commenced. In some states, that document also indicates
that from that point forward neither party may dispose of
marital assets, change insurance coverage or modify any
other significant holdings except for the necessities of life.

Petition
The Petition has two parts. The first part is a statement of
facts which sets out basic facts such as the identities of the
parties, whether they have children and what assets they
may hold. The second part of the Petition seeks relief such as
an award of custody, spousal maintenance or child support
and a division of assets and debts. The Petition is often
tailored to seek the maximum relief. It is a positioning paper

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that will often seek as much relief as the proponent could
possibly seek.

Answer and Counter-petition
The opposing party has thirty (30) days in most states to
submit an answer to the petition. The Answer is very simply
the opposing party’s statement of facts and their request for
relief. Often the service of an Answer is waived. This is often
done to save the parties the cost of an additional filing fee
should the matter be settled. However, if a waiver or
extension is not granted by the opposing party and an
answer is not filed within thirty (30) Days, the original party
may seek a default. A default means that the original moving
party may request the relief requested in their petition
without opposition. Late answers are often accepted since
Courts prefer determining cases on their merits rather than
by default.

Temporary Hearings
A temporary hearing may also be called a “Pendente lite
hearing”. Such hearings may be scheduled by either party by
filing a Motion supported by an affidavit.

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Temporary/Pendente lite hearings are designed to resolve
issues while the divorce is pending such as who will have
temporary custody; temporary support and/or maintenance;
where the parties are going to reside pending the resolution
of the case; protection from harassment and domestic
violence; injunctions against financial improprieties; use of
assets. In most states, temporary hearings should not affect
the final outcome. However, from a practical perspective,
temporary hearings can be very important since Courts
often favor a policy of maintaining the status quo. Temporary
orders may be changed if there is a substantial change in
circumstance during the pendency of the divorce to make
the change in the temporary order necessary.

Mediation
Many courts require the parties to attempt to mediate their
disputes before the matter is submitted to the Court. One
exception to this rule may be where domestic abuse has
occurred. Mediation may occur between the parties of with
attorneys present. Mediation means that the parties visit
with a qualified neutral who will attempt to get them to
resolve their differences. In mediation, the neutral is not an
advocate and still not provide legal advice. Most discussions
that occur in mediation are not admissible in Court under
the public policy consideration that favors a free exchange of

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information between the parties to help them resolve their
differences.

Co-parenting Classes
Many states have adopted a policy that requires parents to
attend co-parenting classes where children are involved. The
goal is to teach parents how to minimize the impact of
children involve in a divorce. In most cases, the parents need
not attend together. Some states also require that children
of a certain age attend a class to teach them the skills to deal
with divorcing parents. This is not embraced in all states and
is primarily found in Northern states.

Advance Case Review
Many states have a hearing that is called an advance case
review or early case resolution meeting or Case Management
Conference. In such a hearing, the parties meet with the
Judge assigned to the case or a referee to discuss the issues,
or what discovery may be necessary. This is the parties first
chance to resolve the case or portion of the case.

Discovery
Discovery refers to the "investigation" phase of the case. It is
primarily dedicated to identifying the contested issues, a

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determination of assets, income and debt of the parties. This
exchange of information can be conducted informally with
eth parties agreeing to freely exchange the information or
formally, through the submission of formal documents that
require answers under oath.

Interrogatories
Interrogatories refer to a form of discovery where written
questions are submitted to the opposing party to a lawsuit.
These questions must be answered in writing under oath or
under penalty of perjury within a specified time (usually 30
days). Objections may be made to questions that are
overbroad or unlikely to lead to admissible evidence. Most
states limit the number of interrogatories that may be asked
without the court's permission to keep the questions from
being a means of oppression rather than a source of
information.

Document Requests
A request for production is another part of the discovery
process. Either party may send a request to an opposing
party or witness for relevant documents related to the
proceeding. You may wish to review our list of Documents
that may be relevant to your case. Generally, documents
requests require that the party served provide any and all

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documents requested that they have in their possession
within a specified period of time (usually 30 days). If you do
not possess the documents requested, you do not have to
acquire them if it is not easy to do so. The opposing counsel
may acquire those documents through other remedies such
as subpoena or by having a party sign a Release of
Information.

Releases of Information
The opposing party may send a release of information to the
other party seeking to acquire documents from a third party
that is relevant to the case. Examples of documents that may
be requested include bank statements, medical records,
financial records, work schedules and income information.

Requests for Admissions
Either party may submit to the other a Request for
Admission seeking admissions on certain facts relevant to
the proceeding. Much like interrogatories and document
requests, the responses must be returned within a specified
period of time and must be made under oath (notarized).

Depositions
A deposition can be a more expensive form of discovery. It
allows a party to subpoena and depose any individuals who

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may have information relevant to the case. This includes
parties and non-parties alike. In a deposition, the party being
deposed appears at the attorney’s office or a neutral location
to answer questions put by the other side's attorney
regarding the facts of the case. Depositions are under oath
with a court reporter present so that everything that is said
is recorded. A deposition is scheduled to pin a witness down
to certain facts and to discover all possible documents and
witnesses related to a case.

Failures to provide discovery
The penalties related to a failure to respond to discovery or
to appear at a deposition may be severe. The opposing party
may file a motion to compel discovery and/or seek sanctions
related to that failure. Severe sanctions may include
establishing facts related to a case. That means that the
Court disallows an opposing party from presenting an
evidence or testimony at trial to contest an issue where
discovery was not provided. Default is the most severe
sanction where the Court allows a party to proceed as if the
entire case or any individual issue is uncontested. The Court
may also award attorney’s fees to the party that submitted
the unanswered discovery. If you require additional time to
respond to discovery, you should request the same in writing
including a specific time line when it can be completed.

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Experts
Experts are often employed to determine certain facts.
Those experts may be jointly agreed upon by the parties,
which can save on the cost of having individual experts
testify at trial. However, where that is not possible, each side
may hire an expert to contest an issue and require their
testimony at trial.

Common experts include: custody evaluators; financial
planners to determine future economic circumstances;
business evaluators to value businesses; real estate
appraisers to value real estate; personal property appraiser
to value furnishings and other assets (generally an
auctioneer experience d in home goods); vocational
evaluator to determine earning capacity; psychologists to
testify to mental health issues.

Settlement
A divorce or legal separation case may be resolved at any
time the parties come to an agreement on the issues. In such
cases, the parties would sign a Marital Settlement Agreement
or some other form of stipulation resolving their issues. This
can occur right up to the point of trial.

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Trial
If you are unable to settle your case with your spouse, it will
go to trial. Some states have a trial by jury. Other states have
a trial by judge. At trial you each tell your story to the judge.
It is told through your testimony, the testimony of other
witnesses, and documents called exhibits. st trial, the moving
party (usually called the petitioner or plaintiff) presents their
case first. The call their witnesses who are subject to cross-
examination by the opposing party. When the plaintiff or
petitioner rests their case, the Respondent or Defendant
presents their own case with witnesses and evidence, each
subject to cross examination by the opposing party.

Appeals
After a divorce, either party has a right to an appeal if they
disagree with e Judge’s ruling. The time lines for appeal are
severely limited. As a result, you should consult with a lawyer
in your state regarding those time lines.

Modification
Whether the issues in your divorce are settled by you and
your spouse or are decided by a judge, some things in your
judgment can be modified (changed) by a judge after a

65

hearing. Usually, child support, alimony, child custody, and
child visitation can be modified, but only if one of you can
show that there has been a change in circumstances.

Enforcement
If you or your spouse disobeys an order that the court makes
in your divorce judgment, you may file a Motion to compel
compliance. Such motions are generally for contempt and
require the service of an Order to Show Cause and a Motion.

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Property Division
Depending on how contentious your divorce is, the process
of dividing all of your marriage assets can be anywhere from
relatively painless to extremely complicated. Thankfully,
most divorcing couples are able to reach an agreement on
their own without resorting to legal warfare. Here you can
learn the basics of how property, other assets, and debts are
divided in a divorce.

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Community Property Division vs. Equitable
Property Division in Divorce

The issue of how to divide property comes up in most
divorces, which is why it’s important to know if you live in a
community property state or an equitable property state.
The way your state handles property division depends on
which of these property systems apply. The exceptions to
this happen when there was a prenuptial agreement, or if the
parties to the divorce draft an agreement that divides the
property according to those specific terms.

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Equitable property
Most states are equitable property states (or separate
property states). Under the equitable system, a court divides
marital property according to what it considers to be
equitable, or just, to both parties. This is why an equitable
division isn’t necessarily always a 50-50 split. In some of the
rarer circumstances, one spouse can end up with almost all
of the assets if this is what the court deems as fair.

In equitable property states spouses are generally awarded
property in proportion to how much they contributed to the
marriage. Often, the spouse who earned more will receive
the larger portion of the property and assets because they
contributed more financially to the union.

However, a court often balances things out by taking other
factors into consideration as well. Some of examples of these
factors include the length of the marriage, the earning
potential of each spouse, the standard of living established
during the marriage, the value of a stay-at-home spouse who
took care of the children, etc.

The court evaluates the financial ability of each spouse when
considering marital debt and liability distribution.

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Community property
Community property law only applies to these nine states:
California, Arizona, Idaho, Nevada, Louisiana, New Mexico,
Wisconsin, Washington, and Texas. (Puerto Rico also falls
into this category.)

In a community property state, a court looks at all assets that
were acquired during marriage and then divides them
equally between the spouses during divorce. All assets are
divided equally regardless of who owns title to them. For
example, both spouses are considered to own all money
equally even if one spouse doesn’t work. The only time when
marital assets aren’t split equally is if a prenuptial agreement
was in place.

In addition, community property laws also apply to all joint
debts and liabilities because these count as marital property.
This means that all debts and liabilities are equally divided
between both spouses.

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What is Non-Marital Property?

In a divorce, some assets may be considered non-marital
and, as a result, are not divided in a divorce proceeding.

What is the marital estate?
In a divorce, the parties divide up what is called the "Marital
Estate." The marital estate includes any assets or debts that
the parties own at the time of the divorce. Each spouse is
deemed to have an equal interest in marital assets or debts.
This is true no matter how property is titled or held and no
matter which spouse's job paid for the asset or which party
incurred the debt. That means the marital estate includes a
401K account or credit card debt that is in your spouse’s
name alone.

In fact, marital property is inclusive and encompasses 401K
plans, stock plans, stock options, real estate, frequent flier
entitlements, bank account proceeds, couches, chairs, cars,
utility debts, credit card debts and any other form of asset or
liability.

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What are categories of non-marital assets?
Some states have classifications of property that are
exceptions from the marital estate that is divided. These
assets are often called non-marital assets. Any non-marital
assets that you possess remain yours and any non-marital
assets of your spouse remain his/her assets. Among states
that take this approach, some listed non-marital
classifications include:

 Premarital. Any asset acquired before the marriage (if
the asset was encumbered by a loan that was paid off
during the marriage, it may only have a partial non-
marital value).
 Prenuptial Exclusions. An asset excluded by a valid
prenuptial agreement;
 Personal Injury Proceeds. Personal injury
settlements are generally considered personal to the
injured party and are non-marital in nature. Some
states also include Social Security benefits, Worker's
Compensation and Disability in this category;
 Inheritance. Any proceeds or assets from an
inheritance;
 Gifts. Any asset acquired as a gift to one, but not both.

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Losing Non-Marital Status
It is possible for non-marital assets may have both a marital
and non-marital value. In some cases, non-marital assets
may lose their non-marital characteristic. This can occur in
several ways:

 Commingling: If non-marital proceeds are co-
mingled with marital proceeds so that is becomes
difficult to identify the non-marital asset, the non-
marital characteristic may be lost. For example,
placing non-marital proceeds in a joint bank account
may not immediately eliminate a non-marital interest.
However, if marital proceeds are added to the bank
account or if proceeds from the account are paid out
for regular living expenses, it is more likely that the
non-marital value will diminish since it is impossible
to determine which proceeds came out first - the
marital proceeds or the non-marital proceeds.
 Marital Improvements: Additionally, spending marital
money (any money earned by either party during the
marriage) to improve a non-marital asset may also
create a partial marital interest in an otherwise non-
marital asset. The increase in the value of the asset
attributable to the improvement is likely to be
considered marital.

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 Appreciation: The Courts make a distinction between
"active" and "passive" appreciation. Passive
appreciation of a non-marital asset remains non-
marital. Passive appreciation occurs when an asset
increases in value without any action by the parties.
For example, if the value of real estate increases
without the parties improving the property, it is
considered passive. Active appreciation is a marital
asset. Active appreciation occurs when the value of an
asset increases because of an act by the either of the
parties during the marriage. Capital improvements to
real estate during a marriage may create a marital
interest since a capital improvement is likely to add to
the property’s value. Manipulating a stock account or
transferring a mutual fund from one account to
another resulting in an increase in value may also be
"active appreciation" which creates a marital interest
in an otherwise non-marital asset.

Tracing Non-Marital Value
Non-marital assets may often be "traced" into later acquired
assets giving the party with the original non-marital interest
a non-marital interest in the new asset. For example, if one
spouse owned a vehicle before marriage and that vehicle is
later traded in for a new vehicle during the marriage, that

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party may be able to trace a non-marital interest in the new
vehicle. Tracing is really the process of establishing a
sufficient paper trail to claim a non-marital interest in a
subsequently purchased asset.

Often, presenting a persuasive property case depends on
clear cut documentation, and expert testimony.

Divorce Property Settlement: Tips for
Property Division
Every divorce has unique factors, but nearly all divorces
involve many of the same issues, such as property division.
Although property is one of the biggest sources of
disagreement in divorces, the vast majority of divorcing
spouses are able to reach a compromise outside of court.
In general, you’re more likely to be satisfied with your
property division if you negotiate it yourself.

If you and your spouse can’t come to an agreement then a
judge will make the decisions for you. Remember that no one
knows better than you what your financial needs are and
how best to meet them, so it’s probably prudent to see if you
can work out an agreement yourself. Here are some common

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negotiation guidelines that can help you reach a property
settlement without litigation.

Preparing before negotiation
 Review your state's property laws. Before you sit
down at the negotiating table, you may want to take a
look at your state’s property divorce laws. Knowing
what you’re lawfully entitled to will help you ensure
that the division is fair when negotiating the terms of
the agreement.
 Define your financial needs. Next, consider your
financial needs, and define your overall goals for the
negotiation. Major components of your financial need
include: your income, earning capacity, age, health,
number of children, retirement plans, etc.
 Know where you stand financially. It’s also important
to look at your asset-to-debt ratio. You may or may
not be legally liable for debt incurred during your
marriage, so it pays to be informed. If you are liable
for the debt, the creditor will still require you to pay
even after your divorce. Getting a complete picture of
your true financial situation through an inventory will
help you establish a good benchmark of what to
expect. Typically, the division of property includes
assets like your marital home, household items,

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vehicle(s), insurance, retirement plan(s), any
businesses, securities (stocks, mutual funds, bonds,
CDs, etc.), cash, and collections and other valuables.
Using a property checklist can help you take a
complete inventory of everything. Attorneys usually
have these checklists, so make sure to ask yours for
one.

The negotiations
 Traditional negotiations. Traditional style
negotiations usually involve each spouse’s attorney.
Each side presents their respective interests until an
agreement is achieved. The negotiations may span
several meetings between both parties and their
lawyers. In difficult cases when the parties are unable
to agree, the lawyers may draft the terms and
negotiate on behalf of their clients.
 Mediation. This process is a good choice because it is
non-adversarial, thereby allowing a husband and wife
to come to an agreement on their own through the
assistance of a neutral third party. Usually the third
party has experience with conflict resolution and can
help reduce hostilities significantly on both sides.
 Collaborative divorce. Both parties sign an agreement
beforehand which commits them to reaching a

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settlement; if a settlement is not reached then the
lawyers withdraw from the subsequent litigation. The
parties may use experts or specialists to help them
reach mutual agreement on issues.
 Other alternatives. If you and your spouse just can't
agree on how to split the property, then you may find
these other methods useful (like silent auctions,
taking turns from a list, etc.).

Dividing Property in a Divorce: Who gets the
Family Home?
Written by: Suzanne Griffiths, Divorce / Separation Lawyer

Always check your state's specific laws
How courts determine which party gets the family home
varies state to state. Remember to always check your state’s
specific laws. For example, a Colorado court may rule
differently on the matter than a court in another state. All of
the following scenarios are examples of how a Colorado
court could handle allocation of the family home.

Parent with primary care of children
When considering the division of property, courts consider
the economic circumstances of each spouse at the time the

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division of property is to become effective. The Court must
consider the desirability of awarding the family home or the
right to live therein for reasonable periods to the spouse
with whom any children reside the majority of the time.
Therefore the parent who has primary care of the children
has the advantage.

Financial feasibility
A court may also consider whether it is financially feasible
for the primary parent to maintain the home, refinance the
mortgage and pay the obligations related to the home.

No fault divorce vs. fault divorce states
Whether your state is one that grants divorces based on
fault, could possibly affect the court’s decision. For example,
Colorado is considered to be a “no fault” state. What this
means is that if one of the parties is having an affair or has
abused the other, the court cannot take that information
into account when allocating the assets. However, a court in
a state that allows divorces based on fault might possibly
assess the situation in a different way.

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Gift, inheritance, or owned prior to marriage
If the family home in a divorce was received by gift,
inheritance or was owned before the marriage then it will
generally be awarded to the spouse who received the gift or
inheritance or who owned the home prior to marriage.

Additional factors
Other factors that a court will consider in allocating the
family home include the contribution of each spouse to the
acquisition of the marital property, including the
contribution of a spouse as a homemaker.

Dividing Retirement Plans in Divorce

Deferred compensation refers to pension plans, 401K plans,
IRAs and other retirement assets. Such plans are divisible as
part of a property settlement in divorce regardless of which
party is named on the plan. How they are divided depends on
the value and nature of the asset. Perhaps one of the worst
scenarios in a divorce is when retirement assets are
transferred to a former spouse but the original owner is

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liable for liable for the taxes, including penalties for early
withdrawal.

Types of Retirement Assets
There are three main kinds of deferred compensation plans.
1. Savings plans include retirement assets such as IRAs,
401(k) Plans, ESOPs, and Thrift Savings Plans.
2. A defined contribution plan is one in which the value
of the plan is determined in part by the amount of
contributions made into the plan. The money
contributed may be invested and grow.
3. With a defined benefit plan, an employee is provided
a monthly payment starting at retirement age and
ending at the end of his/her lifetime.

Dividing Savings Plans
Dividing Savings Plans: Savings plans such as an IRA are
considered "cash" plans since they may be liquidated before
retirement age. They are divisible as part of a divorce.
However, before any division may occur, a custodian of the
account must receive and review a certified copy of the
court order dividing the plan. Additionally, the spouse
receiving a portion of the plan must fill out documents
relating to the manner of payout.

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IRA proceeds may be cashed out and paid directly to the
receiving spouse or they may be "rolled" over into a new IRA
in the name of the receiving spouse. However, the tax
consequences related to cashing out the plan may reduce
the plan proceeds by more than thirty percent (30%) for
taxes and early withdrawal penalties.

Dividing Defined Contribution Plans
Valuing and Dividing Defined Contribution Plans. The
valuation of a defined contribution plan can be determined
by multiplying the account balance by the percentage of
vesting. This is a relatively simple way to value the plan and
determine marital value. Generally, such plans may be
divided currently with each party receiving one half of the
current vested value.

Dividing Defined Benefit Plans
Valuing and Dividing Defined Benefit Plans. With a Defined
Benefit Plan, generally the participant's benefits cannot be
liquidated prior to retirement age and the non-participant
spouse may receive a retirement plan in her name
representing her marital interest in the participant's plan.
This plan is generally subject to the same terms and
conditions of the original plan.

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Often, the Participant may choose a payment method from
several options. The chosen method will affect the amount or
timing of the payments to both the participant and any
receiving spouse. This may mean that retirement benefits
are received when the original participant decides to retire,
not when the recipient spouse retires.

A defined benefit plan may be divided in one of two ways:

1. Cashing Out/Present Value Calculation. First, a
recipient spouse may elect to receive money
effectively cashing out his/her interest in the plan. To
cash out, a present value of the plan proceeds must
be determine. "Present Value" is the current value of a
future benefit. In simple terms, a dollar that you
receive today is more valuable than a dollar you
receive next week since you may invest the dollar or
deposit the dollar and accrue interest. Therefore,
retirement benefits that are received at retirement
age would have a lower value if paid in a lump sum
currently. Often, a calculation or of present value
requires an actuary or accountant.

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2. Division of Future Benefit. Rather than using a
present-day cash value, a defined benefit plan may be
divided by dividing the future stream of income. This
is accomplished by drafting a Qualified Domestic
Relations Order (QDRO). This is a court order which
instructs a pension plan to pay an Alternate Payee (or
former spouse) a portion of retirement benefits
accrued by a Participant due to an equitable
distribution agreement in a divorce. With this
method, the court retains jurisdiction until the
benefits are paid.

Dividing a Business in a Divorce
Property division in divorce can become fairly complex if one
or both of the spouses owns a business. The income
generated by a business is usually significant, so there’s often
some conflict over who gets the business, or how it will be
divided in the divorce settlement. Even if the business
belongs to only one spouse, chances are that the business
counts as marital property, which is why it’s still subject to a
divorce property settlement.

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Business valuations
One of the first and most important steps to take is to get a
business valuation. Even if your soon-to-be ex tells you that
they’ve been earning X amount from the business every year
and that the business is worth Y amount, don’t take their
word for it. Always keep in mind that they don’t necessarily
have your best interests at heart, so you should take basic
precautions to protect yourself. This includes getting an
independent appraisal, or engaging a joint appraiser with
your spouse.

Calculating the value of a business isn’t exactly a science,
which is why in most cases two different appraisers will
assess different values to a business. However, the Institute
of Business Appraisers (IBA) and the American Society of
Appraisers (ASA) have issued standards for valuing
businesses, which means that appraisers tend to follow a
similar general procedure. This helps ensure that even if two
different appraisers arrive at different values, the two value
amounts should be fairly close to each other.

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What actually happens to the business?
Here are some common scenarios for businesses after a
divorce:

 One spouse buys the other one out. One spouse gets
the business, and makes payments over time to the
other to compensate financially.
 The spouses separate different facets of the
business. Each spouse receives a part of the business
to operate how they want. For example, a couple with
2 different branches of a business may choose to
divide the business so that each gets one branch
office.
 They keep working together. Sometimes couples are
able to remain business partners even after a divorce,
but this is fairly rare.

No matter the size of the business, it’s always a good idea to
engage an attorney who is experienced in complex property
issues to help you determine what’ll happen to the business
in your divorce.

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Divorce Debt and Credit Issues
It is a common misconception that a court in a divorce can
relieve one party from the financial obligations incurred
during the marriage. Although the Court may require one
party to pay a joint debt, that ruling does not prevent a
creditor from pursuing either party for an unpaid debt. The
creditor is not a party to the divorce action. The Court has
no authority to modify the terms of the contract that was
executed with the creditor.

Even in cases where the parties have an amicable
relationship and reach an agreement on the issues, danger
lurks. Problems with joint debts are often the result of
mistakes and ignorance rather than an intent to harm the
other party. As a result, if you aren't careful to protect your
rights as part of your divorce and if you do not place
protections into a divorce agreement, your finances may be
adversely affected for years.

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Dangers
 Even a debt that is current may affect your ability to
qualify for new credit since the outstanding debt will
appear on your credit report;
 Unpaid joint debt may adversely affect your credit
rating and impair your ability to acquire new loans;
 An unpaid joint debt may result in collection efforts
and costly court appearances; • An unpaid joint debt
may result in the entry of a Judgment against you;
 An unpaid joint debt may result in garnishments or
liens.

How can I avoid these difficulties?
 Pay Off Debt. Any joint debts should be paid off. This
is the most practical and bullet proof solution. If the
parties do not have the liquid resources to pay off
existing joint debts, they may wish to consider selling
other assets or tapping into other financial resources
to settle the debt. Obviously, this is the most effective
way to eliminate the debt and prevent future
collection issues.
 Transfer Debt. Joint debts may be divided by
transferring the debt solely into the name of the party
responsible. This can often be accomplished by

88

satisfying the debt with a credit card in that party’s
name. This may be more difficult with larger
obligations like a homestead mortgage.
 Sell Assets. Sell any assets that are encumbered by a
joint security interest. This specifically includes real
estate. It is important to remember that transferring
the title of the asset into one person’s name does not
eliminate responsibility for the debt. If you take your
name off of title, whether the asset is a car or a house,
you are removing ownership but not loan
responsibility.
 Refinance the Debt. Have one spouse refinance the
home in his/her own name. If one spouse is going to
keep the house, you should insist upon new financing.
The mortgage company will not simply remove one
party from the responsibility for the loan. As with any
new financing, the party seeking to refinance will be
required to qualify financially. Often, the financial
impact of the divorce may make qualifying difficult. In
such cases, it may be possible to find a relative willing
to co-sign on the new loan.
 Include Protective Language. Clearly, the best way to
resolve joint debt issues is to eliminate the debt or the
joint nature of the debt. Sometimes, however, those
options are impractical. In such cases, you must be

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very careful to place protective language into the
divorce agreement or to specifically request
protective language from the Court at trial. This is a
last resort and an imperfect way to resolve joint debt
issues. Often, protective language allows recourse
against a party that fails to pay court ordered debts,
but does not prevent damage to other party’s credit.
The language used must be carefully crafted to
comply with state and federal law. Any omission may
result in language that is unenforceable and
ineffective.

Protective language may include:
 Requiring the party obligated on the joint secured
debt to remain current and in the event that a
payment is not made in a timely matter, require that
the secured asset be placed immediately on the
market for sale;
 Allowing the party that is not obligated to make
payment on any delinquent debt in order to protect
his/her credit rating and to seek reimbursement in
addition to interest and attorney’s fees from the other
party;
 Establishing the allocation of joint debts as an integral
part of the financial settlement and support payments

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in the divorce proceeding which renders the debts
non-dischargeable in bankruptcy.

Understanding Bankruptcy and Divorce
Written by: Richard George Fonfrias, Divorce / Separation Lawyer

Spouses often use bankruptcy differently
Some spouses use bankruptcy after a divorce has been
finalized as an offensive weapon to delay or prevent having
to refinance a mortgage. Other couples file bankruptcy
before a divorce to simplify the debts before they separate.
So how you use bankruptcy depends on your goals in the
divorce. Generally it’s wise to file a bankruptcy before
divorce so you know how the debts are going to be handled.
When one spouse files a bankruptcy after the divorce,
creditors usually come after the other spouse to satisfy
jointly incurred marital debts. This means that one spouse’s
bankruptcy filing could send the other spouse into
bankruptcy.

The bankruptcy includes everything
Your bankruptcy estate is everything you own and owe at
the time the bankruptcy is filed. When spouses file
bankruptcy, all property acquired during the marriage is

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included and potentially available to pay debts. Your
bankruptcy estate is everything you own at the time the
bankruptcy is filed. Once the bankruptcy is filed, the court
issues an immediate stay to stop creditors from collecting
debts. Your spouse will still have to pay child support or
alimony; however, they may not have to perform other tasks,
such as refinancing to remove one spouse from the
mortgage.

I am involved in a case now where the wife is under a court
order to refinance and remove her husband’s name from the
mortgage. For the last several years she has not complied
with the order. The wife filed a bankruptcy to restructure
her debts and the divorce court is powerless to force her to
complete the refinance.

Property settlements
Whether the bankruptcy court discharges a divorce property
settlement will depend on whether the debtor can show they
cannot pay the debt and still take care of themselves, their
dependents, and their business. Generally, property
settlements are not dischargeable in bankruptcy. Exempt
property is protected and not available to be sold to pay
debts. Each state where a bankruptcy is filed has its own

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exemptions. For example, in Illinois each filing spouse can
“exempt” $15,000.00 of home equity.

Protect Yourself
An effective way to protect yourself against your spouse
filing a bankruptcy is to take lien on property your spouse
gets in the property settlement. This makes you a secured
creditor. If later, they file a bankruptcy you can repossess the
property to pay the debt.

Hidden Assets and Divorce
If you know you’re going to be getting a divorce soon, then
you may want to start tracking marital finances. Not only is
this necessary to your divorce, it’s also a prudent measure to
take so you can see if your spouse has any hidden assets
tucked away. Being attentive to the relevant financial details
can help ensure that your divorce settlement is fair to you.

Overview of hidden assets
A hidden asset is one that isn’t readily visible in normal
accounting records because all usual signs of ownership
have been concealed through complicated measures.
Diligence and thorough preparation go a long way towards
tracing assets which are deliberately disguised by a spouse.

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Information and involvement are critical for discovering
hidden assets.

Hidden assets are mostly liquid in nature; examples are bank
accounts, stocks, bonds, and mutual funds. The reason why
they’re usually liquid is because this type of asset can be
easily transferred into the name of a relative, friend, or
business entity. Sometimes the funds are transferred into
accounts in offshore banks where they cannot be touched
under the laws of the country of residence.

Hidden assets and divorce settlements
Hidden assets are especially important in divorce
settlements because one of the parties in a divorce may have
tried to hide certain assets. If a court doesn’t know about an
asset, it can’t force that person to share it with their spouse.
Since both spouses lawfully have claim to all marital property
for purposes of a divorce settlement, hiding assets is illegal.

Tracking down hidden assets
A good way to start the task of tracing hidden assets is to
establish a methodical plan to study all financial records. In
general, look for things that don’t add up. For example, if an
asset is initially present in documents but suddenly seems to
have disappeared then it’s possible that it was diverted into

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some other unknown account.

Here are more examples of good places to look. Old financial
statements may help identify suspicious transactions. ATM
activity can throw light on cash which may have been placed
in some hidden account. In particular, getting a credit report
on your spouse is a good idea because it may contain
information on financial accounts or credit unknown to you.

Some clues to find hidden assets:

 Income that isn’t reflected on financial statements
and tax returns.
 Cash kept as travelers checks: Locate by tracing bank
account deposits and withdrawals.
 A custodial account set up in the name of a child.
 Investment made in certificate "bearer" municipal
bonds or Series EE Savings Bonds: Since these are not
registered with the Income Tax Authorities, they do
not appear on account statements.
 Artwork, antiques, gun collections, hobby equipment,
original paintings, expensive carpets and tools: Have
everything appraised, and don’t forget to check your
spouse’s work office for items.

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 Debt repayment to a friend which actually was never
a debt.
 Delayed disbursements of bonuses, stock options and
accounts receivables till after the divorce.
 Expenses incurred towards gifts, travels, tuition fees
or rent of a friend.
 Retirement accounts that were never disclosed.
 Deliberate devaluation of property: Allowing rental
property to remain vacant or unrepaired so that
divorce allocation is done on the basis of the devalued
price.
 Payment of excess income tax and subsequent filing
for the tax refund after the divorce.

If you are fairly sure that your spouse has hidden assets, then
it may be a good idea to engage an experienced attorney to
help you find them.

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Divorce: Everything You Need To Know But Were Afraid to Ask

Divorce: Everything You Need To Know But Were Afraid to Ask

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