Dealing with separation and divorce is one of the most trying and difficult emotional crises men and women can experience. Earlier hopes and dreams are destroyed. There are feelings of defeat and loneliness, guilt, a mixture of sorrow and anger. Mostly there is a fear of facing an unknown future.
Because of the emotional trauma, a person who is either contemplating a separation or in the midst of a divorce is in danger of making wrong decisions, decisions which can translate into long-range, even permanent suffering. Thus, the first question you should ask yourself is: Is there any chance that we can save our marriage? If you think that you still love your spouse and want to try to save the marriage, then you should discuss marriage counselling with your spouse. Is he or she willing to meet with your priest, minister or rabbi? With a marriage counselor? If you do not know a clergyman or mental health professional who is experienced in marriage counselling, call our office. We can usually refer you either to a clergyman of your religious faith, or to a social worker, psychologist or psychiatrist who is experienced in marriage counselling. Usually, you will know within 6-8 sessions whether or not there is a realistic possibility of saving the marriage.
If you have come to the conclusion that divorce is the answer, then you must first separate the emotional aspects from the need to establish and implement long-term economic goals because. . . .
A divorce is final . . . so you must plan to do it right
Assuming that after much careful consideration you have reached the conclusion that divorce is the best alternative for you, then you also realize that the decision to divorce can be a positive, not a negative. It is not the end of one life, but the beginning of two others. The time to plan the rest of your life is NOW. Because the economic consequences of divorce are as final as those of a death, "Divorce Planning" is as important as estate planning. Nothing of an economic nature should be left to chance because nothing is more difficult than trying to change the economic details of a divorce after it is final.
You must be able to focus on the important issues and to work effectively with your lawyer. Getting answers to the questions in this guide can help you make informed decisions before and during the process, decisions which can improve the qualify of your life, for the rest of your life.
The first step toward getting answers about your separation and divorce is to know what questions to ask. You should put all of your questions and concerns in writing before you even consult your lawyer. Spend plenty of time on this task because it could be the difference between a successful result and a disaster you may regret. We have some ideas for you to consider because putting your questions and concerns on paper will:
(a) separate your emotions from the practical issues which you must face;
(b) give you a clearer picture of your future needs;
(c) allow you to become organized and focused on the important issues;
(d) give your lawyer a clear perspective of your needs and goals so that an effective strategy can be planned . . . And then you can be told if your goals are unrealistic, if you want too much, or not enough.
1. List the overall goals you want to achieve and briefly describe how you feel they should be attained.
2. List, in descending order of importance, the issues which are most important to you.
3. List, in descending order of importance, the issues which you think are probably most important to your spouse.
4. Write a brief, frank history of your marriage with dates, employment histories, and other relevant information. 5. If you or any child has a disability, make sure to describe it.
6. Document the contributions and sacrifices both you and your spouse have made during the marriage. Try to be fair in your appraisals, not one-sided, although you may feel that way. Your lawyer needs your candor in order to arrive at an objective appraisal of your case so you can be advised properly.
7. Gather, copy, and sort all tax and financial records you can find.
8. Go through your checking records over the past two years. Then Categorize and list the deposits and your monthly expenses. Note expenses which may be paid semi-annually or annually . . . like property taxes and insurance . . . and be sure to note all increases. A detailed budget is very important.
9. Itemize all benefits which may be provided as a result of employment . . . such as pensions, automobiles, health insurance plans, life insurance, etc.
10. List all assets you know of. Note when each asset was acquired, the approximate cost of each, and your estimated current replacement value of each.
After you have completed these tasks, assuming you still want to proceed to the next step, then is the time to . . .
Hiring a lawyer is much like finding a physician. Bedside manner is great and may make you feel good now, but you must secure a long-term result. So research the lawyers in your area and choose a professional who handles matrimonial matters on a regular basis. You may want to interview more than one lawyer before you make a decision. Remember: There are no guaranteed results . . . so find a lawyer who objectively addresses the issues. Make sure you feel comfortable with your lawyer . . . and be sure to meet the staff members who will be involved with your case. Although your lawyer will spend a relatively short time in your life, the results of your divorce will be with you for the rest of your life. So . . .
Your relationship with your lawyer must be one of trust. Anything you tell your lawyer one on one is privileged . . . That means your lawyer is duty-bound not to repeat your confidences. The same holds true for the lawyer's support staff. You should be totally honest with your lawyer. Your lawyer will sort through the factual information you provide, apply those facts to the law of the state in which you live, and give you advice accordingly. Because of the complexities involved, you must expect that your lawyer will rely upon experts in such fields as taxation and valuation so your case can be effectively prepared.
In most divorces, the lawyer:
(a) evaluates the facts of your case, the legal issues involved, your legal rights and your obligations.
(b) advocates your side in all aspects of the process.
(c) negotiates for a settlement which provides the full benefits to which you may be entitled and which is fair to all involved.
(d) advises you about your legal rights and provides competent referrals concerning the many non-legal issues which arise as a result of separation and divorce.
You must figure out the rest of your economic life. . . . Today. And you need an economic life management plan. . . . Today. Financial and insurance arrangements, in particular, require the most detailed and careful attention. It would be unfair and unrealistic to expect your lawyer, or any one individual, to be an expert on every subject involved in achieving a successful result. Thus, you should expect to receive from your lawyer referrals to experts who can competently assist you on such issues as securing credit, controlled investment and insurance planning to meet your needs, real estate, skill evaluation and employment counseling, mortgages, and other non-legal matters.
The following are some of the main points to go over with your lawyer. Remember, no lawyer can give you definite, precise answers because there are none. Lawyers' opinions are generally based upon ranges of probability which, in turn, are based upon the facts which you provide. Don't be afraid to ask about:
1. The Potential Results of Divorce Proceedings
(a) What are the chances of achieving your most important goals? You must then decide which ones you are willing to negotiate or abandon.
(b) What is the range of possible results?
(c) What are the strong and weak points of your case?
(d) What is the worst result that can be anticipated based upon the information you have provided?
(e) What is the approximate length of time to complete a separation or divorce action in your locale
(1) if settled? (2) if litigated in court? (3) if appealed?
2. The Family Home
(a) Will the family home be sold in order to divide the equity? If so, what arrangements can be made for alternative housing for you, your spouse, and for your children?
(b) Estimate how long will it take before the home will be put on the market for sale?
(c) Estimate how long will it take to sell the house for what it's worth? What is the real estate market in your locale?
(d) If there is a move, who will pay the packing and moving expenses and when? (e) What is the best way to deal with school changes for children?
(f) Are there ways for one spouse to retain the house through total refinancing, a second mortgage, an equity line of credit, a home equity loan, or another means by which one spouse can buy out the other's share?
(g) Upon sale, how will the insurance and tax rebates be divided?
(h) What are the tax consequences if the home is sold and the equity is not reinvested within the specified time? How can these consequences be avoided?
(i) Are there special tax rules if one or both owners are over 55 years of age?
(j) How can personal property be fairly evaluated?
3. Auto and Homeowners' Insurance
(a) When one spouse leaves the home, will the current automobile insurance cover both spouses and any children who may be driving or will it be necessary for one spouse to purchase another policy immediately?
(b) Will the departing spouse need to buy a tenants' insurance policy to cover personal property taken into an apartment or will the current homeowners' policy extend to that property?
(c) If there is a move, will the homeowners' policy cover any perils which may occur during the move? If not, what are the options to protect the property during the move?
(d) What limits and deductibles will best protect you when new coverage is purchased?
4. Health Insurance
(a) If both husband and wife are not covered by group health insurance by separate employers, how long will the working spouse's health insurance provide coverage for the non-working, non-insured spouse, if at all? If there is coverage, at what cost? Do state laws in your locale supersede federal guidelines? What about coverage for the children?
(b) When and how are these elections made?
(c) How are the rising costs of health care coverage handled?
(d) If there is a pre-existing condition which might make it difficult for the non-working spouse or children to secure health coverage, what options are available?
(e) If the spouse or one or more children are disabled, what are the options?
(f) If one spouse was or is in the military, what rights does the other have to military medical benefits? What if there is no military installation nearby? How are these matters handled?
5. Alimony and Child Support
(a) What is the maximum length of time alimony and child support can be paid in your locale?
(b) What is an estimate in your case?
(c) What if the dependent spouse or a child is disabled?
(d) What public benefits are available for disabled children?
(e) If the paying spouse becomes disabled or dies, are there ways in which the payments can be continued?
(f) What about cost of living increases?
(g) Will the property settlement affect the amounts paid or received as support or alimony?
(h) Does a non-working spouse have an interest in the working spouse's social security upon retirement or death?
6. Education for Spouses and Children
(a) Who is responsible for post-high school education for deserving children?
(b) How can the projected cost be determined and how can the award be protected if the supporting spouse dies or becomes disabled? Who pays for this protection?
(c) What financial aid by way of grants or loans may be available and from where? How can a family qualify? Should available aid be considered in structuring an agreement?
(d) Ask the same questions regarding the education of a dependent spouse who needs to become trained to enter or re-enter the work force.
(e) What about disabled children. . . Will they need special types of planning? And what is available in the public sector for them?
7. Life and Disability Insurance
(a) Can and should the obligated spouse be required to secure long-term disability coverage in case of an unexpected inability to work?
(b) If so, in what amounts, who will pay the premiums, and what is the anticipated cost? (c) What coverages, if any, should be purchased on the life of the dependent spouse? On the children?
(d) Who owns the cash values of existing policies and how can they be used?
(e) What are the tax consequences of ownership of policies, transfers of policies, payment of premiums, and collection of insurance proceeds?
(f) What happens if a spouse is uninsurable? What arrangements can be made to assure existing polices are continued?
8. Credit and Debts
(a) How can credit be established for someone who has never had credit? (b) If an account is used by both spouses during the marriage, does that mean that both have credit ratings and credit histories?
(c) How can one obtain his or her credit history and a credit report?
(d) Can one spouse be penalized because the other has not paid debts incurred during the marriage?
(e) How will debts created during the marriage be divided and paid?
(f) What about tax liabilities?
9. Pensions and IRA's
(a) Is one spouse entitled to a division of the other's retirement? If so, how does this work? (b) How are pensions and IRA's valued and divided? What are their tax consequences and when do they attach?
(c) Can these sums be used immediately without penalty? If not, what is the penalty?
(d) What about military pensions?
(e) What rules apply in your case as far as distributions?
10. Management of Your Money
(a) What is an asset allocation plan? Is it warranted in your case?
(b) How can high-risk investments and "churning" of an account be avoided? ("Churning" is a practice whereby trades are made in an account not for the benefit of the holder of the assets but to earn commissions.)
(c) How can a plan be arranged for a particular need without the risks of high fees, commissions, and high-risk financial products?
(d) What are annuities and how might they assist in assuring a steady flow of revenue?
11. Estate Planning (a) Is a will valid after a divorce? Should a will be prepared immediately upon separation to insure that the estate will not pass to an estranged spouse?
(b) How should the estate be structured to provide for minor children?
(c) What kinds of trusts are available? Can insurance policies have trusts as beneficiaries? Who should serve as custodian?
(d) If a disabled child is involved, what special concerns must be faced in estate planning?
(e) Can custodianship of children be passed by will?
(f) What about living wills and the donation of organs?
(g) Is there protection from an estate being used up for nursing home and out of hospital care?
12. What is All of This Going to Cost?
You will probably be asked to pay a retainer and to sign a contract before a lawyer will handle your case. This is normal; however, you should discuss and understand these issues before you enter into this relationship. Therefore, in your first meeting with your lawyer, you should ask:
(a) How the lawyer's fees are computed? What is the best estimate of the range of fees? What are the probable expenses to handle your case? How are fees payable?
(b) Will a legal secretary, legal assistant, or paralegal be assigned to your case for preparation purposes? If so, don't feel that you are getting "second class" treatment. These people are well-trained professionals in their work and their services are billed at rates less than it would cost for your lawyer to do the same thing.
(c) Will other experts be necessary in your case? CPA's, business analysts, or others often needed to help your lawyer by determining valuation, taxation, and other issues. Find out the range of these fees, how the fees are charged and how they are payable.
Now that you have asked the important economic questions and received some of the answers, you should then ask yourself and your lawyer several additional questions before you make final decisions:
1. Are all of my goals really worth the cost?
2. Is the time, stress, and cost of a full blown war worth it? Or is there a way in which to fairly resolve the most important issues more quickly?
3. Will the cost of getting an optimum result really mean that my net result will be less?
Lastly, we suggest a list of "DON'Ts" which you may choose to utilize to your best advantage in planning your divorce and following through with the advice of your attorney.
1. DON'T take the process lightly. It is very serious and the outcome, to a large extent, will affect you for the rest of your life.
2. DON'T forget that court proceedings generally involve judges who make decisions based upon the facts presented by your lawyer and your spouse's lawyer. Your believability and demeanor is important in influencing the judge's discretion. Use common sense and be honest.
3. DON'T burn the bridges between you and your spouse, especially if children are involved. Direct your energies toward assisting in the preparation of your case and constructive goals rather than destructive ones.
4. DON'T think your lawyer is a miracle worker who can solve your problems overnight. It has taken you years to get to this point. There are no easy solutions in matrimonial matters.
5. DON'T make any threats or antagonize. This will only serve to intensify an already emotionally-charged relationship.
6. DON'T reveal to anyone, even close family members, your communications with your lawyer. Your relationship with your lawyer is privileged; however, if you choose to talk about it, you may waive this privilege . . . and you may give away the strategies of your case.
7. DON'T forget to keep your diary and any communications from your lawyer in a private place.
8. DON'T rely upon the advice of friends who "have been through it" as to what you should get, what you should pay, or what is fair. Each case is different. Rely upon your chosen attorney.
9. DON'T be afraid to ask questions if you are unsure. You are entitled to know. Then ask your lawyer: "Is there any question I should ask, but did not?"