Top 3 Money Stressors During a Divorce
Divorce Lawyer in New Jersey
Divorce can be highly stressful and emotionally draining experience for the parties involved. However, there are three common divorce topics that are found to be the most contentious. And all three have to do with money. These are division of assets, spousal support or alimony, and child support. Ensuring an experienced divorce lawyer in New Jersey is on your side will keep things more favorable.
1. Division of Assets
The first issue most spouses tackle is the division of assets. Whether it was many years ago or relatively recently, you and your spouse made a vow to share your lives – and that means sharing things, too. Lives are never joined at one clean seam, but entangled – and so too objects and other assets become entangled with an individual’s identity. While you might want a “clean break” from your marriage, it’s rarely that simple when it comes to the division of possessions and assets.
The division of assets starts with a discovery process, in which both parties exchange financial information. That doesn’t mean you stop at bank statements: potentially anything could be “discovered,” or requested, including property holdings, cars and boats, gambling winnings, retirement accounts, bonus packages, stocks, and even frequent flier miles. This might involve getting depositions from employers or other parties with relevant information, or subpoenaing information from investment houses and insurance providers. After the discovery process, both sides come to the table with an offer, and negotiation begins. If the parties can’t come to an agreement, the case may proceed to a trial.
New Jersey is an “equitable distribution” state. That means that any assets acquired between the date of the marriage and the date one party filed a complaint for divorce are subject to be distributed “equitably” – which can often mean 50/50, though that isn’t necessarily the case.
Income, bonuses, retirement accounts, and property can be distributed. The list runs much longer – you’d be surprised by things that the court considers part of the marriage “pot.” An experienced divorce lawyer in New Jersey can help you figure out what assets in your case might be subject to distribution.
Some property will not be subject to distribution. Inheritance will stay with the inheritor. That includes money and stocks as well as things like furniture and other heirlooms. Items clearly associated with one spouse’s hobby will go to that spouse – for example, golf clubs, easels and paints, hunting trophies, etc. Collections that appreciate, however – like antique cars, coins, or artwork – count as investments, and will be subject to equitable distribution even if they are the exclusive passion of only one spouse. Everyday cars will also be split. If one spouse drives a BMW 7 Series and other drives a Gremlin, the court will add the value of both cars and divide that sum by two. It doesn’t matter who keeps which car, then: both are entitled to half the value of both combined.
It’s important to keep in mind that debts are subject to equitable distribution as well as assets: that could include mortgages, loans, and credit card debt.
In any high-asset divorce case, both parties will undergo a full and thorough asset search, including assets held out of state or overseas. You may end up hiring a CPA or forensic accountant to study your spouse’s bank statements and tax filings to look for discrepancies and red flags. (It’s unwise to hide assets – if found out, you’ve weakened your position in the eyes of the court, making yourself appear untrustworthy.) Most other countries will accept the jurisdiction of a divorce proceeding in New Jersey, but some don’t.
- In NJ, all marital assets are subject to equitable distribution.
- Debts are subject to equitable distribution as well as assets: that could include mortgages, loans, and credit card debt.
2. Spousal Support or Alimony
Alimony isn’t involved in all New Jersey divorce cases, but it is an important element in many. The three biggest factors determining alimony are the length of the marriage, the lifestyle a couple shared during their marriage, either party’s legitimate financial need, and the other party’s ability to pay. If both parties are earning close to the same income, there will not generally be any alimony. There are other factors commonly considered, too – for example if one spouse is raising young children, or if one spouse is elderly. Following recent legislation, New Jersey recognizes two types of alimony.
- Limited duration alimony: One spouse will continue payments for a finite, prearranged period.
- Open duration alimony: Various triggers and conditions will determine the length of time one spouse makes payments to the other.
Alimony payments rarely exceed the length of the marriage. There is no established formula for deciding the amount and duration of alimony payments, but in most cases, New Jersey judges will order alimony payments for about half the length of the marriage, and take ¼-⅓ of the difference between the two parties’ incomes as a starting point – but this comes from custom, not an official statute.
In New Jersey, if one party fails to abide by an alimony order, the other party can file a motion with the court to seek the enforcement of that order. This can result in the incarceration of the negligent parent, the suspension of that parent’s driver’s license or other professional licenses, and an order of contempt.
- Not all New Jersey divorce cases require a spouse to pay spousal support.
- The factors determining alimony are length of the marriage, lifestyle during marriage, financial need, and ability to pay.
3. Child Support
Child support is one of the more difficult areas of family law, and disagreements over child support can turn contentious and bitter, in some cases lasting long after former spouses have finalized their divorce. The question of what’s financially fair and equitable is complicated when the interests of a third party – the child or children – come into play. An experienced divorce lawyer in New Jersey can help answer some of your questions about child support, and anticipate some of the common concerns that arise.
Different states have different rules and guidelines governing child support. New Jersey courts use two sets of guidelines, or “worksheets,” one for “sole parenting” and one for “shared parenting”. If one party’s gross weekly income exceeds $3,500, the guidelines may serve as a starting point, but the judge will have greater discretion to mandate additional child support on a case-by-case basis.
If your children are very young, you might not have put much thought toward your child’s college education before you began divorce proceedings. Your first step should be to talk these issues out with your spouse and respective attorneys in mediation. New Jersey law requires that a child exhaust opportunities for scholarships, grants, and student loans available prior to parents being obligated to contribute toward college costs. If the court mandates a contribution, it would be calculated in proportion to their respective incomes, based on the ability to pay.
In New Jersey, child support is the right of the child, not the right of the parent. In theory, then, child support is not waivable. However, if you do not seek to enforce the child’s right to court-ordered support, that would have the same effect was “waiving” the support.
Child support payments in New Jersey will continue until a child is legally “emancipated,” which usually occurs at the age of 18. In most cases if a child is enrolled in a two or four-year college, he or she will not be emancipated until graduation. However, the parents have significant say here: some factors could allow for emancipation while a student is still enrolled in college; and in some cases, parents will agree to allow a child five years to finish college.
If your former spouse has stopped paying child support, you can notify the family court; the judge will sign a warrant for his or her arrest, and jail your former spouse until he or she has paid the full balance of missed child support. The court also can seize the negligent party’s passport and suspend driver’s or other professional licenses.
- New Jersey courts use two sets of guidelines, or “worksheets,” one for “sole parenting” and one for “shared parenting”.
- In New Jersey, child support is the right of the child, not the right of the parent. In theory, then, child support is not waivable.
If you or a loved one is going through a high-asset divorce, please be sure to contact Brian Freeman, an experienced divorce lawyer in New Jersey to protect your interests and those of your child to the best of your ability.