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Archive for the ‘money’ Category

In a Divorce, Don’t Forget the Details

Posted on September 21st, 2016 by The Red Headed Lawyer

in-a-divorce-dont-forget-the-details

If you look up “what are the most stressful life events,” divorce is second – right behind death of a spouse.

In some ways both are synonymous. Each involves a death of sorts, and there is something else these events have in common. Both will require you to make critical, potentially life-altering decisions at a time when your mental capacity is taxed by stress. But in both cases, the decisions will need to be made quickly and thoughtfully, because most will be irrevocable.

Everyone can list the major decisions involved in a divorce:

  1. Child custody
  2. Disposition of marital home
  3. Visitation
  4. Support payments
  5. Division of major assets/liabilities

These have to get resolved and they are on everyone’s radar from day one. But in the heat of “battle,” don’t lose sight of those other issues that, if left unaddressed, can cause additional expense, emotional pain, and wreck havoc with future relationships.

Credit Cards

Chances are, if you’ve been married for a number of years you have joint credit cards with your spouse. It is often simpler to pay these off before the divorce heats up. It doesn’t really make sense to have your attorney negotiate with opposing counsel over a $300 Target balance, but if you forget, it will need to be on the table. And even when there is no balance, if the card was issued jointly it could be a problem down the road. Call the company to determine how you can remove a currently authorized user. Sometimes it’s fairly easy and sometimes not, but it must be done. Remember that removing a user is better than closing an account completely for credit score purposes, but sometimes you won’t have a choice.

Utilities

This situation will be similar to the credit card scenario. Utilities (including phone, cable and Internet) are often joint obligations. Obviously, whoever is to remain in the house needs to have the control and the liability. So check them – the departing spouse should assure that he/she is no longer connected to the utility accounts. You may to have to jump through a hoop or two to remove a name, but it will be worth it.

Club Memberships

Some club memberships include a credit account. Even if yours doesn’t, at some point you’ll need to separate yourself from your ex so Sam’s, Costco, and others treat you as an individual with (in same cases) a new address. Besides, do you really want your ex to know about your shopping habits?

Netflix, etc.

This can become an issue, particularly if it’s not resolved early before things get heated. Consider what might happen during a custody battle if your viewing habits suddenly became public information. It might be embarrassing, or it could (depending on what you watch) become a morals issue used against you in court to take away your child(ren.) Tread carefully during custody discussions – you don’t want anyone to think your home activities create hazards for children.

Gag Orders

It is common in a settlement agreement to include language stating that one spouse cannot slander or speak badly of the other. This is usually to maintain the relationship with a child or children. But don’t forget that slander can apply to others. What if your ex-spouse decides that his or her new favorite activity is bad-mouthing the person in your current relationship? It’s hard to prove in court, but the parties will know exactly what is happening. Unless it is prohibited, either specifically in the document or by some broader statement, a situation could develop where your friends, relatives, and kids become a sounding board for your ex’s complaints and comments. Don’t let this happen – be sure you protect yourself.

There are many more areas of entanglement that must be severed prior to divorce. Go through your wallet or purse and look at everything – chances are you will find more. Gym memberships, anything that is autobilled like yard service, reward program points – the sooner you address these the better. By paying off bills, separating or closing joint accounts, dropping users, and protecting yourself from torment, you save time and money during your divorce. It is also easier to resolve these issues early before emotions take over.

Feel free to contact us if you have any questions on settlement agreements or divorces.

Money and Marriage Can Be Happily Ever After

Posted on March 23rd, 2016 by The Red Headed Lawyer

money-and-marriage-can-be-happily-ever-after

Money and marriage. Like oil and vinegar, they don’t mix well unless you take the time to shake things up a little.

One of the earliest acknowledgements that personal finance was fraught with danger was by the Apostle Paul. He told his young disciple Timothy that “the love of money is a root of all kinds of evil.” And Paul was single, so maybe he was sugarcoating it a little. Dr. Phil (who is married) is more succinct, firing a warning shot over the whole institution of matrimony with “Money can ruin your marriage.”

Strong words that happened to be spoken 2,000 years apart. What are newlyweds to do? How can such dire warnings be addressed?

Communication and Expectations.

When you think about the sequence of events that occurs when two people fall in love, discussing a family budget does not even rank. This is not because the parties don’t consider family finance important, it’s because they consider it very important and personal.  As everyone knows, “it’s personal” is a commonly used excuse for keeping a secret, but when committing to a new life with a partner, there can’t be secrets. How do two people confront this topic early, in an honest and non-confrontational way so feelings are not hurt and mutual cooperation is preserved?

The recommendation is pretty unanimous among marriage counselors, bloggers, and reporters, including Chris Arnold of NPR – make a budget.

In his March 8 story “How to Keep Money from Messing Up Your Marriage,” Arnold writes that there are deep-seated feelings to be addressed when two people combine financial forces. Maybe one person is handling more of the home responsibilities and working less. Maybe there are children involved and one career is being sacrificed more than the other. Or perhaps the split of household expenses has become unequal over time.

If something is bothering one party and the other doesn’t know, this is a recipe for problems. So hold a family summit and get all the financial issues on the table. Figure out how much your household expenses and other mandatory outlays are (a good exercise for everyone) and how they should be paid. List the non-mandatory but very important expenses (like contributions to retirement or savings accounts) and decide how to find these. Then, tackle what might be the most important category – personal expenses. Agree on how much of the monthly pot each of you gets to call your own.

It doesn’t sound that critical, but consider this, as pointed out in the NPR story. What happens when one party needs to approach the other for spending money? Is that a healthy way to maintain a life partnership, or have things suddenly gone parental?

There can’t be unequal partners in any sort of marriage, so decide on some basic rules. Each party gets a certain amount of money twice per month that is theirs and does not have to be reconciled. Either party can make purchases up to a certain amount without checking with the other. Then, agree on how credit card balances will be jointly handled.

Communicate with full disclosure, and then agree on rules so expectations are set. Commit to a periodic review of the rules to be sure to account for changes in circumstances.

Get this right, and Dr. Phil won’t be.