Six Essential Actions Before Moving Out of the Marital Home in Divorce

The decision to leave the marital home once you decide to divorce should not be taken lightly.

Leaving the marital home can have significant legal consequences.  Therefore, to protect your legal rights, below are 6 essential actions to take before moving out.

1.          Document the marital income

Before moving out of the marital home, it’s important to document the sources of household income earned by both you and your spouse.

Knowing the current income of each spouse is essential for the divorce including for child support and alimony.

Since it’s generally easier to access the documents and income sources while still in the home, this should be done right away.

If you’re a salaried employee, this includes pay stubs and tax returns.

If you’re self-employed, this also includes documents such as bank account and credit card statements, business records, and loan applications.

Once you move out, it might not be as easy to gain access to these documents.  It can also be extremely costly for lawyers to obtain.

2.          Create a monthly budget for current household expenses.

Once you’ve assessed and documented the marital income, determine the current marital finances by creating a budget.

The budget should detail the current income and household expenses.  Likewise, the budget should be documented by gathering bills, financial statements, and other documents showing the current household expenses.

You will need this budget to complete your Case Information Statement, which is a financial statement required to be filed with the Court.

3.         Make a list of marital assets and debts.

When dividing marital assets and debts, it will be essential to have an accurate list that includes current values and balances.

Accessing the source documents for the marital assets and debts is generally easier while still in the home, and generally less costly if done by lawyers after you move out.

Here is a checklist of significant divorce documents to gather before moving out.

4.          Prepare a custody and parenting time plan.

It’s extremely important to have a written child custody and parenting time agreement in place before moving out of the home.

If you anticipate being the non-custodial parent, moving out could create a new status quo where you could potentially end up with less parenting time with your children.

As much as moving out affects you and your spouse, there is an even greater effect on the children.

Chances are your children can feel the tension between you and your spouse.  As a result, they can experience ongoing anxiety from not knowing what will happen.  Having an agreed-upon written custody and parenting time agreement can go a long way to putting your children’s minds at ease.

5.     Identify what you will take with you.

Decide which items in the home you will take with you.  Make sure to get agreement you’re your spouse in writing to avoid costly legal disputes.

Legally, you are generally expected to maintain your current contribution to the household and living expenses even once you move out.

This is not the time to increase your standard of living.  Therefore, you should not make major purchases on expensive furniture, vacations, or vehicles.   You should spend only what is necessary.

6.     Assemble the team.

You will need trusted advisors to help you make the best financial decisions possible in the divorce.

You should first consult with a lawyer who focuses on divorce and family law.  An attorney can help create a strategy and recommend any additional professional advisors who would be helpful in the divorce.

Moving out of the marital home is a very important decision with potential legal consequences.  Therefore, this decision should not be taken lightly or without preparation.

Are You Paying Too Much Child Support to Your Former Spouse When Your Child Goes Away to College?

If you’ve been divorced for a number of years already and now it’s time for your child to go away to college (or your child is already away at college full-time), chances are the child support payments you make to your former spouse should be changed.

In New Jersey, divorced and divorcing parents are generally obligated to financially support their children until each child becomes “emancipated.”  For a child who attends college full-time, he or she becomes “emancipated” upon completing full-time attendance at college or reaching age 23 – whichever occurs first.

By the same token, the New Jersey child support guidelines are intended to apply only to children younger than 18 years old or otherwise still in high school.

Divorcing parents also have a separate, though related, obligation in New Jersey to contribute to the cost of college for their children.

So, if your child support obligation in your divorce agreement was calculated under the New Jersey child support guidelines, your divorce agreement likely requires child support payments to be “reviewed,” “revisited,” or “recalculated” when each child graduates from high school.

Therefore, you should first check your divorce agreement to see whether it specifies how child support will be recalculated and how college costs are to be paid.

Otherwise, New Jersey child support laws require the court to determine the amount of child support for a child away at college full-time on a case-by-case basis by considering the factors listed in N.J.S.A. 2A:34-23.

To save fees and avoid the inherent uncertainty of a court decision, many divorced parents prefer to negotiate an out of court settlement with the help of their family lawyers to agree on the appropriate amount of child support and how much each parent will contribute to college costs.

Here are 5 steps when negotiating an out of court settlement with your former spouse on child support and payment of college costs:

1.          Gain cooperation from your former spouse.

Approach your former spouse in a conciliatory manner about discussing a “concern” you have about your son or daughter.

This can get you both on the same page as to the values you both believe are important in raising your son or daughter.

For example, it might be important that your child develop a “work ethic” by contributing to his or her own spending money, car expenses, etc.  This tends to promote confidence in your child, a sense of responsibility, and help your child develop positive financial habits for the future.

Likewise, you might highlight the benefits to your former spouse.  For example, the more you’re contributing to child support when your child is away at college, the less you might have to contribute to the actual costs of college.

2.          What are the expenses being incurred for your child each month?

Ideally, you and your former spouse should each identify the amount of “child-related expenses” and “college-related expenses” incurred each month.   “Child-related expenses” might include, for example, medical insurance to cover your child, clothing, automobile expenses including insurance, entertainment, and food while at home.  Do not include monthly expenses that are part of college costs.  For example, food while your child is away at school is typically included as “room and board” college costs.

College expenses would include, for example, tuition, books, and room and board.  You should first look to your divorce agreement to see if it designates which expenses are considered “college costs.”

3.         How much money is available from financial aid, college savings accounts (e.g., 529 accounts) or other resources, and from any contribution from your child?

For child-related expenses, if your child is working or otherwise able to contribute financially to his or her own expenses such as car payments, entertainment, and other expenses, estimate how much your child might reasonably be able to contribute each month.

For college expenses, after you’ve applied any funds from financial aid and/or college savings accounts, determine the balance left to be covered.

4.          How much income and expenses do you each have?

Ideally, you and your former spouse should each complete and exchange “Case Information Statements” and most current income tax returns.

Then, calculate each parent’s percentage share of your total combined income to come up with how you might apportion the balance of expenses between each of you.

For example, assuming you and your former spouse earns a combined total income of $200,000 per year, with one parent earning $150,000 and the other $50,000.   Here, the parent earning $150,000 earns 75% of the combined income ($150,000 divided by $200,000) and the other parent earns 25% of the combined income.  Your family lawyer can help you calculate these percentages.

5.          Determine how much you and your former spouse will each contribute to the remaining child and college-related expenses.

One option for apportioning the balance of expenses left to be covered in #3 above is you and your former spouse to share the expenses based on each parent’s share of combined parental income.   For example, the parent who earns 75% of the combined parental income might pay 75% of the expenses.

The key, however, is to come up with a plan that you and your former spouse can agree upon.  This also helps take the pressure off your child by having predefined responsibilities for each of you, including your child.

For additional information or questions about child support for college-age children, please call or contact us for a personalized one-on-one consultation.

 

Children and Divorce: What Your Children Are Most Likely Thinking (If Not Saying) and What to Do About It

When you and your spouse decide to divorce, it’s common to experience a range of emotions and uncertainty.

And when you have children, it’s also common they will experience their own emotional whirlwinds.

As parents, we tend to worry about our kids.  And when kids are going through such a difficult tumultuous life change as divorce, you might become that much more protective to ensure their emotional well-being.

You might, therefore, wonder what your children are thinking or what to say if they ask you certain questions about your divorce.

Or you might notice your child has more stomach aches or headaches than usual.

Or perhaps your son or daughter has become socially or emotionally withdrawn, moody or aggressive.  You might also notice that your child’s performance at school and grades have declined.

Older children might tend to avoid being home, especially if both parents live together in the home.

As a family lawyer for over 20 years and a former teen of divorced parents, I know all too well the many ways divorce can affect children.

Here are four of the most common thoughts and fears that children have about divorce – even if they don’t say it directly.

1.          “It’s my fault.”

One of the most common worries is that your son or daughter may be the cause of your divorce.

The first thing to do is to assure them the divorce is not their fault.   That you both love them and always will.

You can help your child avoid feeling ashamed by your divorce by making it clear the divorce is not a reflection on them.

You might say that you and your spouse made the decision together (even if you didn’t ) and you both feel it is the best decision for the family (even if you don’t).

2.          “Maybe you’ll get back together.”

It’s very common for kids to be hopeful that you’ll stay together after all.

They might watch how you interact together –  and if it looks like you’re getting along, they can become hopeful you’ll get back together.

If your decision to divorce is final, it’s important to tell that to your children.

It’s generally best to be firm, yet gentle.  They’re likely to experience their own grief about the divorce.

3.          “You might stop loving me too.”

Younger children in particular might worry if they do something bad or you get mad at them, you’ll stop loving them and perhaps even leave them too.

They might be on their best behavior around you.  Or become reluctant to express an opinion you might disagree with.

Whether or not your child comes out and says it, it’s important to reassure your son or daughter that you will both always be their parents and always love them no matter what.

4.          “I’ll need to leave my school and friends.”

It’s very common for children of divorcing parents, regardless of age, to worry about moving away and leaving their friends behind.

Children generally tend to thrive on consistency, structure, and routine.

Therefore, it’s a good idea for you and your spouse to first develop a custody and parenting time plan or agreement together.

At a minimum, this should include where the children will primarily live, whether they will stay in the same school or district, and how often and when they will they spend time with each of you.

For more information on custody and parenting time agreements, see this post.

Then, once you have a custody and parenting plan, you and your spouse (ideally together) can give your children the details they want and need to know to put their minds at ease.

It’s extremely important that your children know they can always come to you and tell you whatever is on their minds.

As difficult as it can be when going through your own emotional turmoil with divorce, knowing your kids have the answers they need can go a long way towards easing the transition for everyone.

Thank you for reading!  To receive up-to-date divorce tips, answers, and developments in the law, subscribe to our weekly blog.

 

Five Actions to Protect Your Retirement in Divorce

You’ve worked diligently for years and accumulated a healthy nest egg for retirement.  But now it appears divorce is a real possibility.  Naturally, you’re concerned about whether your spouse has a claim on any of your retirement benefits.

The short answer, as with any legal question, is that it depends.

Generally, in New Jersey, all assets acquired during the marriage, regardless of which spouse holds title, are subject to being divided in divorce.  This doesn’t necessarily mean fifty-fifty, however.

The amount each spouse ultimately receives is generally determined on a case by case basis by applying a number of factors listed in the New Jersey Equitable Distribution Statute.

In any event, here are 5 actions you can take right to protect your retirement in divorce:

1.          Make a list of all retirement accounts you have. 

These would include traditional pension “defined benefit” plans, such as police and fire, teacher’s pensions, or other types of government pensions, and “defined contribution” plans, such as 401k plans and IRAs.

2.          Determine whether you started any retirement plans before you were married.  

Generally, the portion of a retirement plan started before the marriage would be exempt from dividing with your spouse.

Therefore, if you started a particular retirement plan before the marriage, you should obtain copies of statements from closest to the date of marriage.

The earlier in time before the marriage you started in the plan, the more it might make sense to use an accountant to quantify the value of your premarital interest – and any gains on that interest.

3.          Determine the current value of each retirement plan.

For traditional pension plans, obtain the most recent statement of accrued benefits.

These are typically sent to you annually or twice per year by your plan administrator.  You should also be able to access them online.

For “defined contribution” plans, obtain copies of your most recent statements. 

4.          Calculate the marital value of each plan.

Marital assets are generally valued as of the date on which the divorce complaint was filed with the Court.

Consult with your lawyer to determine whether to hire an outside accountant or actuary to calculate the present value of the marital portion to be divided.

5.          Determine any retirement accounts of your spouse with comparable value.

If your spouse has any retirement accounts in his or her name, determine if any are of equal or comparable value to yours.

If so, the retirement assets can be distributed by “present value offset. ”

This means that the spouse who earned the retirement account keeps it and the other spouse receives another marital asset of equal value in return for waiving his or her interest in the account.

The same method can be applied to other marital assets of equal or comparable value to your retirement plans.

It’s very important, however, to obtain competent tax and legal advice when distributing retirement in divorce.  If the division is not done properly, there can be a steep price to pay in taxes, penalties or an unintended amount of the asset going to your spouse.

If you are concerned about dividing your retirement or other marital assets in divorce, please contact us to schedule a personalized consultation.