Most people that are seeking a divorce will consult with an attorney or multiple attorneys to see what their rights are, how assets and debts will be divided, how custody and visitation will be decided and estimates on child support and spousal support. This is a smart thing to do because you do not want to go into such an important and life changing event that will have such an impact on your future. However, once the divorce judgment is entered the planning should not stop. In fact, since you know how the assets and debts are divided and you know what child support or spousal support has been ordered, the planning should really begin again. This article will give some suggestions of areas that need additional attention after the judgment has been answered.
The first thing to know about spousal support is the tax consequences. Unlike child support, spousal support has tax consequences for both the payor and payee. Spousal support is income to the person receiving it so it is taxable. That means, if you are receiving spousal support you want to make sure that you will not owe at tax time and if you do that you keep money aside for payment of taxes. As such, it is smart to consult with a tax specialist to determine the tax consequences for the amount of spousal support you receive. For people that are paying the spousal support it will be tax deductible for you.
If a Gavron Warning was issued which is in most cases you want to make sure you are doing what you can to become self-supporting. Every divorce is different so there is no bright line rule on how much time or what needs to be done to satisfy the requirement. Obviously, if you have been a stay-at-home mother for 25 years, taking care of 3 children, the circumstances will be different than a spouse who has been married 10 years, with no children and worked for most of the marriage.
Lastly, if there is a termination date for spousal support you want to ensure that you have employment. Although courts can extend spousal support, it is again on a case-by-case basis and is generally tough to do. For example, if you have been married 4 years and are receiving spousal support for 2 years, it will be extremely difficult for you to extend it even if illness or termination of employment occurs.
“Co-parent, co-parent, co-parent!” This is extremely important. Your children will benefit if both parents are co-parenting and WILL suffer if you are not. If you have not taken a co-parenting course I would take one. Unfortunately, if you have to go back to court and modify custody, you need to know if there is a Montenegro Order. If there is a final custody order ( Montenegro Order) than a significant change of circumstances must be found to modify custody. If there is no final custody order than “best interests” standard applies. Lastly, parents should keep a calendar regarding visitation so if you do go back to court you can remember when you had visitation and any issues that arose during visitation. Keeping a calendar is a great way to remember.
Trust and Estate Planning
You and your spouse may have had a trust or will when you were married but those were likely terminated during the divorce proceedings or did so as a result of the judgment. As such, the divorced spouse needs to address estate planning all over again. It is even more important because if you die, you do not have a spouse who would likely receive the assets. Therefore, you want to ensure that either your children or someone else gets your assets as you want them to receive them. If you received real property as a result of the divorce you should strongly think of drafting a trust. Although the cost may seem high to create a trust, the cost that your estate saves when you pass is astronomical.
Are Terms of the Judgment Satisfied
Make sure you are satisfying all the terms and obligations of the judgment and marital settlement agreement. If you have questions, than go back to the attorney you had or seek consultation from one to ensure you are doing what you are suppose to be doing. Judges can be very hard on people that have not performed their obligations under the judgment or marital settlement agreement. This can be very costly.
If a retirement plan such as a 401k needs to be divided it will need to be done by a Qualified Domestic Relations Order. Court and Marital Settlement Agreements will sometimes have specific language stating what needs to be done and who needs to pay for it. However, QDROS are not created by themselves so parties need to be on top of it to ensure they get done. Most family law attorneys do not draft QDROS which means you will have to go to a company that specializes in them. This will cost additional money.
If you get married again it may be beneficial to have prenup. Second divorces do not get easier but chances are you may have more assets coming into the second marriage or just do not want to go through the division of assets. Prenups are probably the most difficult topic to bring up to your fiance but it can be the smartest thing you ever do.
Although the above is by no means an exhaustive list but hopefully it is food for thought for life after the divorce judgment. Being prepared is never a bad thing so ensure that you are for life after the divorce.
DISCLAIMER: The above article is for informational and educational use only. It is not intended to be legal advice in any way. If legal advice is needed you should seek the assistance of an attorney.