FREQUENTLY ASKED QUESTIONS ABOUT FINANCIAL ISSUES IN DIVORCE

Q: How much child support will I receive/pay?
A: In New York State, as in most states, child support is determined by formula. The formula depends on the number of children living with you under age 21, your income as well as your spouse's income, the amount of Social Security and Medicare tax you paid and local city tax paid if you live in New York City or Yonkers. The formula is fixed for the first $80,000 of your and your spouse's income, and then is subject to judicial discretion for addition amounts. Child support is equal to the following percentages of gross income as adjusted above: 17% for one child, 25% for two children, 29% for three children, and up to 35% for five or more children. I generally project several child support scenarios as part of the divorce financial planning process.

Q: Will I be entitled to alimony (required to pay alimony)? Note: New York calls it maintenance but other states and the IRS call it alimony; some states call it spousal support.
A: While child support is determined by statute, the Court determines the amount of alimony you will receive. The New York State Domestic Relations Law includes such guidelines as the length of your marriage, your marital lifestyle, your income and the ability of your spouse to pay, your age and heath, the likelihood that you will obtain gainful employment, as well as a catchall…any factors that the Court feels are relevant. There are two types of maintenance: rehabilitative (short term) or permanent (until retirement or life). It is unusual for anyone with a short-term marriage (under 10 years) to be awarded permanent maintenance. Keep in mind that no two cases are the same. I recommend that you speak with an experienced matrimonial attorney who practices in your locality to understand what a typical maintenance award would be for your situation.

Q: Will I have to give up my pension?
A: Pensions and retirement plans are marital assets if they were earned during your marriage and must be shared with your spouse. Pension accumulated from earnings prior to your marriage are generally separate property. If you want your pension and your spouse wants another asset, it is possible to keep your pension by using the other assets to offset the value of your pension. My job as a financial planner is to look at any proposal you are offered and make sure you are getting a fair deal.

Q: Can I keep the house at least until the kids grow up?
A: This is a great question that requires careful study. A house has a high cost to maintain, mortgage payments may be significant, and a lower earning spouse may lose favorable tax deductions. Finally, you may be giving up other assets with greater growth potential. As a divorce financial planner, I work with you to determine your priorities, income and expenses, taxes and lifestyle options so you will have all the information you need to make an intelligent decision.

Q: I have a bank account in my name. Is it considered separate property (I don't have to share it with my spouse when I get divorced)?
A: Assets acquired during the marriage, no matter whose name they're in, are typically considered marital property. In New York State, the increase in value of separate property could also be considered marital if it was actively managed during your marriage. There are certain exceptions to this rule. Property acquired through gift or inheritance, property that you brought into the marriage, awards from personal injury cases, and property excluded thought a prenuptial agreement. Finally, separate property, which you put in joint name with your spouse, is considered a presumptive gift and becomes marital property. Each state has its own set of rules governing separate and marital property. It is important that you discuss any issues of separate and marital property with a matrimonial attorney who practices in your state.

Q: Am I entitled to part of my spouse's Social Security check?
A: Yes, if you were married for 10 years or more, than you are entitled to one-half of your spouse's Social Security income as long as you are not currently remarried. Your spouse's check is not affected; he/she still gets their full check. You have a choice between your check and or your spouse's…whichever is higher. This benefit is available by going into your local Social Security office and presenting the appropriate documents to certify the length of your marriage. For people requesting early social security benefits, we use the lower benefit account for the early years and switch to the larger benefit account at normal retirement age.

Q: When will I get my day in Court?
A: Probably never. Less that 2% of all divorce cases actually go to trial in the United States. Most cases are settled in conferences between your lawyer and your spouse's lawyers or in pre-trial conferences with the Judge. A judge will only hear your case if you can't reach an agreement. As a Divorce Financial Planner, I want to work with you early on in your case. By the time we get to the conference stage, I will have a clear idea what we need to support your post-divorce lifestyle, how much your spouse can afford to pay or needs for support, and where the money can come from. My experience is that when my client has their numbers in order, we can make a convincing case to get the money we need.

Q: What is a QDRO and why do I need one?
A: A QDRO (or Qualified Domestic Relations Order) is the legal document sent to the plan administrator of your spouse's pension plan that orders them to divide a pension account as part of a divorce. Your divorce contract (Judgment of Divorce) signed by the judge may authorize the division of pension assets but does not put that request into effect. Without a QDRO you will have to get your share of the pension from your ex-spouse every month when they get their check. If he or she remarries in the interim or dies before the date the pension is due to start, you may get nothing at all. There are many nuances that go into a QDRO that make it a document that can work to your benefit (versus a neutral document). In order to protect your assets, I recommend that you consult with a qualified specialist in this area.

Q: What if I want to use Mediation or Collaborative Divorce. Can you still help?
A: Yes, I work with Divorce Mediators and Collaborative Law Practitioners. Alternate dispute resolution is appropriate when both spouses want a fair and equitable solution, there is full and honest disclosure of financial assets, and there is no spousal abuse. Often I work with the less financially savvy spouse to help her/him understand the financial issues so they can be on equal footing during the negotiations. That often includes prioritizing financial goals and developing a workable post-marital budget. At times, I work with both spouses during mediation sessions to take the emotion out of the financial issues. That process includes a reality check, since there is only so much money to go around, and minimizing taxes through efficient allocation of tax deductions to create additional cash flow.