Articles Posted in Alimony

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Attorney Matthew R. Arnold answering the question: “How long does getting a divorce take?”

Though almost all couples exchange vows promising they will remain together ’til death do us part, many assume that divorce ends the eternal commitment. Sadly, in a number of states where permanent alimony laws remain on the books that is simply not the case.

A recent survey by US News and World Report found that permanent alimony laws still exist in several states, including New Jersey, Oregon, Vermont, Connecticut, West Virginia, Florida and right here in North Carolina. Thankfully a number of those states, including New Jersey and Florida, are currently considering some much needed alimony reform.
Charlotte Divorce Separation Lawyer Attorney Charlotte North Carolina 2.jpgIn fact, the Florida Senate recently passed a measure backed by the group known as Floridians for Alimony Reform, which would end permanent alimony. The measure not only ends the practice of permanent alimony, but would also allow for long divorced couples to reopen their divorce settlements and change long established financial arrangements.

The measure, which passed last month by wide margins, puts a cap on the amount of alimony that can be paid based on a person’s income. It also would allow the spouse paying the support to file a petition with a court to terminate or lower alimony payments when the paying spouse reaches retirement age. The law also includes protection in some exceptional cases where the spouse receiving the alimony is not able to support themselves due to some serious handicaps.

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Alimony Lawyers and Attorneys in Charlotte NC North Carolina.jpgEveryone knows that the world has changed a lot over the last several decades. One of those ways is the increasing earning power and presence of women in the workplace. Today, women make up almost half of the American workforce. Despite this big change in terms of financial empowerment, alimony laws across the country have remained fairly static. The fact that spousal support laws don’t appear to be keeping up with the times have prompted some to push for changes to the law to ensure that alimony laws reflect the economic realities of today’s job market.

Some groups, especially advocates for men, believe that the existing support laws are outdated and in desperate need of revision. After all, many of the laws were first passed in the 1960s and 1970s. The laws were initially meant to offer support to the spouse earning the least amount of money, almost invariably women. Today, such payments can seem anachronistic, especially given the opportunities for women to start high-earning careers.

These frustrations with alimony laws have led legislators in several states to try and place limits on existing laws or rewrite old ones. Legislatures in Pennsylvania, New Jersey and Oklahoma are considering putting time limits on alimony awards and even legislating against alimony in cases where both spouses are on relatively equal financial footing. An article in the Wall Street Journal even mentioned a similar push here in North Carolina to alter some provisions of the states alimony laws.

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Alimony Lawyers in Charlotte, NC.jpgThe family law practice area has seen the current economic climate lead to a huge increase in the number of modifications for existing child support and alimony awards. People are losing jobs, losing homes, taking pay cuts, losing bonuses and other compensation that was previously used to determine such financial support awards. This can be an especially big problem in cases where one party has received an alimony award and relies on those monthly payments to meet their basic living expenses.

If someone retires, gets injured, loses their job or is otherwise unable to make alimony payments, and your alimony is not designated as “non-modifiable” you may very well receive a discounted alimony payment on an ongoing basis or it may be eliminated all together. Even if the alimony award is non-modifiable, if the person responsible for making alimony payments loses a job and has no assets or means to pay, your chances of being able to hold someone in contempt for non-payment of alimony are slim. Given those potential concerns and the current state of our economy, those who are entitled to any form of alimony really should consider the idea of “lump sum” upfront payments so that they can avoid the issue of an alimony award being terminated or reduced based upon unfortunate circumstances arising in the future.

If there are assets, especially cash assets, available during the initial divorce proceeding it makes sense to at least consider how much of those assets could be distributed to you in a settlement in exchange for a reduced alimony payment. No one knows what the future holds and getting your money up front is a way to reduce potential risk down the road. Lump sum alimony does come with the responsibility of being smart with the money you get up front and making sure the lump sum lasts. This requires you being savvy and meeting with a financial planner or other adviser to manage your money properly.

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Army Seal.pngA disabled veteran has filed a petition before the U.S. Supreme Court asking the justices to decide whether states can instruct divorce courts to count a veteran’s disability benefits when determining spousal support. Peter James Barclay, an Air Force veteran, also asked the Court to determine whether federal law prevents states from considering VA disability benefits communal property to be divided like other joint marital assets.

When Barclay divorced his wife in 2010 the divorce court judge considered the value of his VA benefits when awarding his wife $1,000 per month in alimony. His only income at the time was the $4,400 per month he received from the VA and Social Security. Barclay remains on disability due to post-traumatic stress related to his job as first responder to the 1995 Oklahoma City bombings. He witnessed the full horror of the attack, having to cart away dead and wounded. As a result, he’s unemployable and able to draw federal benefits.

His attorney is now attempting to have the United States Supreme Court decide whether Title 38 U.S. Code, Section 5301(a), which says that VA disability benefits are immune from “taxation”, claims of creditors, attachment, levy and seizure,” doesn’t also prevent them from being included in alimony calculations.

Barclay’s attorney readily admits that most states follow the example set by the divorce court judge in his case. This is based on the Supreme Court’s Rose decision which says that VA benefits are payments intended to compensate both the veteran and his family. Barclay disagrees; in his petition he claims that his disability pay is meant to compensate him for his loss of income. Barclay makes the reasonable point that if a veteran has a spouse the VA compensation tables award a higher disability payment and if the veteran gets divorced the extra payment stops. This mean the spouse should not be able to claim the base amount which remains unchanged regardless of marital status.

Barclay’s attorney also points out that Arizona recently passed a law shielding veterans’ disability benefits from alimony calculations. His petition mentions the two other states – Texas and Vermont – where VA disability benefits paid in lieu of retirement are not subject to division as property or to alimony calculations.

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Money Bag.jpgWhen North Carolina couples are confronted with the possibility of divorce once the emotional pain subsides, many begin to think about their financial wellbeing. There are some things you can do to help ensure that your assets are protected as divorce looms. Lynette Khalfani-Cox, a financial expert with AARP, gives the following suggestions:

Get the right family law attorney. Going through the phone book or randomly calling numbers will cast too wide of a net. Referrals from friends and family members are a good place to start and, given the high divorce rate, it’s likely you’ll know someone who’s been through the process.

Once you’ve reached out to an attorney it’s a good idea to have an in person meeting. Meet with them to make sure everything feels right; that they understand your particular needs and concerns and are skilled enough to do the work you need accomplished. If you trust them then listen to your instincts, if you get a bad vibe then it’s time to move on.

Don’t rely on mediation. Ms. Khalfani-Cox says that mediation is a good first step but that it should only be considered early on, to help get a feel for the tenor of the divorce. Making nice is what many women are prone to try to do and mediating your way out may not be the best way to protect your interests. A mediator’s job is to reach a resolution, not necessarily one that’s right for you.

Khalfani-Cox says the agreed upon settlement can be very one-sided and the mediator may not intervene. Only a good attorney can help tell you what’s reasonable and customary and what to realistically expect.

Set up separate accounts. One of the first things on the agenda should be shutting down the credit cards. No one needs to worry about one party going on a shopping spree and leaving the other with a hefty bill to pay.

Mortgages can’t be simply split up, there’s a process that must be gone through. Bank accounts can and should be divided right away. Also don’t forget that both parties are liable for credit card debt if they signed for the card, regardless of what agreement you have with your ex. If you were on the card and your ex doesn’t pay the company will come knocking on your door.
Know your assets and debts. Sit down and make sure you understand where you’re at financially. Calculate assets and debts. Take special attention when going through retirement accounts, pension, deferred compensation plans, etc. Things can get confusing and you’ll want to make sure nothing is missed. Information is power and you don’t want to be the party unaware of what assets are up for grabs when settlement time rolls around.

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Piggy Bank.jpgA recent article in the Huffington Post discusses clues that should set off alarm bells about whether one spouse is hiding money in preparation for a divorce.

People have special motivation to hide income and assets during a divorce in an attempt to avoid paying higher child support or alimony. One positive note is that hidden income can always be uncovered and the spouse who’s been kept out of the loop can eventually reclaim his or her rightful share.

If you’re afraid that your spouse may be hiding money consult with an experienced alimony lawyer in Charlotte, North Carolina to make sure that a search would be worth your time and expense. After all, forensic accountants can be quite costly so you’ll have to weigh whether the amount is worth chasing after.

Some important warning signs to watch for include the following:

1. If your spouse is self-employed and more knowledgeable about the family finances than you are and has expressed strong feelings about not involving lawyers or financial planners in your divorce.

2. Compare your lifestyle with your reported income. If there is a mismatch, further investigation is likely needed.

3. Look at the ratio of living expenses to income. If a mortgage payment is 75 percent of the reported income, it’s a good bet that there is hidden income floating around somewhere.

4. Pay attention to whether a business owner has multiple tax entities that do not seem to be necessary.

5. Are there any unusual business expenses? If a business is showing expenses that have nothing to do with the work they do it might be time to more fully analyze the books.

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dollar bills.jpgDivorce is a difficult process, emotionally and financially. Before you blindly step into the mess, there are steps you can take to empower yourself by getting your finances in order. Taking the following steps can help make things run more smoothly and even lower your eventual legal bills by being ready for what’s to come. According to a recent FoxBusiness article, the following five tips are some that every soon-to-be-divorced couple should pay attention to for help making it through the process:

1. Evaluate your assets
The house is the biggest asset that most couples possess but there are still usually many more that qualify as marital assets that will need to be divided. People often forget about pensions from past jobs or stock options and deferred compensation plans. Such assets have values that are paid out in the future, not always simple divisions today.

2. Weigh your debt
To begin, prepare a summary of the last 12 months of all credit card and utility bills as well as personal and jointly held loans. Such a history will help you decide who should take on which debts. It’s important not to take on responsibility for debt associated with property you don’t control. For instance, if you are responsible for paying the car loan, you should be the one driving the car. This helps eliminate a lot risk and being liable for the actions of a soon-to-be former spouse.

3. Run a credit check and history
Everyone should conduct an annual credit check with all three agencies. Knowing where your credit stands prior to divorce can help prevent headaches down the line. It’s possible that you’ll discover a credit card or line of credit that you never knew existed, correcting inaccuracies (or preventing fraud) is important.

4. Track how much you spend
Taking stock of your spending habits and creating a realistic budget for your post-divorce life is crucial. Understanding that your old income will now be used to support two households is important. The same amount of money is now going to pay two rents or two mortgage payments, thus lifestyle adjustments will need to be made. People often underestimate how much they spend and putting everything down on paper forces couples to face the hard truth.

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empty chairs.jpgAccording to a recent CNBC article, a divorce expo called “Start Over Smart,” took place in New York over the weekend and was much like a bridal expo, only with lawyers instead of white gowns.

The expo was the idea of Francine Baras and Nicole Baras Feuer, a mother-daughter team who have both been through the painful process. “Bridal magazines are all over the place. There’s no divorce magazine, no divorce community, so a lot of people just rely on information from their attorney,” said Baras Feuer. The mother-daughter duo heard about a similar expo in Paris and decided to try their hand at one closer to home.

The divorce expo was a two-day extravaganza that included a wide variety of panel discussions, from guidelines for parents and divorce for Baby Boomers to how to get back in the dating game after divorce.

Approximately 40 exhibitors set up shop and included lawyers, financial advisers, therapists, life coaches, dieticians, anti-aging companies, a hair stylist and even a matchmaker. Major wealth management firm Morgan Stanley was represented as was a woman who offered to perform a “divorce ceremony” where you write words that remind you of your former spouse and set them on fire. “People often don’t know the questions to ask about finances when they get a divorce,” said Mark Seruya, financial advisor with Morgan Stanley. “People wind up getting referrals from parents or friends. Your father’s financial adviser might not be the right fit,” he said. “It’s a fragmented market. We want to be one of the go-to teams in the divorce industry.”

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wedding cake topper.jpgNew research from the University of Michigan shows that women are more likely than men to wind up without health insurance following a divorce. The rates of women without insurance remain high even several years after a divorce becomes final.

The new study shows that many women lose their health insurance and struggle regaining it after divorce. Using 11 years of Census data, study author Bridget Lavelle looked at health insurance levels of women before and after divorce. She found that nearly 16% of women lose health insurance within six months of divorce and go without it for at least two years.

Lavelle, a Ph.D. student at the University of Michigan’s Gerald R. Ford School of Public Policy, said that the women with the highest risk of losing coverage are those who were covered under a husband’s plan prior to the divorce. Of that group, the rate rises to nearly 1 out of every 4 that will become uninsured following separation.

Going along with the loss in insurance, research indicates that after a divorce many women suffer a substantial decline in overall economic well-being. This general decline makes it harder for women to afford health insurance, even if they were not original included under their husband’s plan.

Lavelle’s study did not look at the situation for men, but previous research, she said, shows that men do not suffer the decline in economic well-being to the same extent that women do. “Men are also less likely than women to be insured through a spouse’s insurance,” she said. “For both of these reasons, the risk of insurance loss is probably substantially less for men.”

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Wedding.jpgFor many elderly Americans Social Security benefits are a critical component of their retirement plan. If you’re a baby boomer in charge of monitoring your parents’ finances or a retiree you should be aware that under certain circumstances it’s possible you might be receiving less than you should. If a woman is divorced or has been married more than once, or a woman’s husband delayed taking Social Security, she might be entitled to a bigger monthly benefit than she is currently receiving. Though the difference may not be huge, it could be critically important to someone with a limited or fixed income.

Discussing the ramifications of divorce on Social Security payments is fairly standard practice nowadays. That wasn’t always the case, however, and many older couples might never have been counseled on the possible impact.

Though the problems are faced by both men and women, the fact that women typically earn less over their working lives means that they are more likely to be collecting less in benefits then they may be entitled to due to earnings of a former spouse. This is because of rules which say an individual is entitled to collect Social Security benefits based on his or her own earnings history, or 50% of his or her spouse or former spouse’s benefit, if it is greater than his or her own, and 100% if the former spouse is deceased.

There are a few rules in order for this to apply to divorced couples: 1) the marriage must have lasted 10 years or longer, and 2) the individual seeking a former spouse’s benefit must currently be unmarried, unless the second (or third, or fourth…) marriage occurred after the age of 60.

A great example of this is as follows: your parents were married in the 1950s, your dad worked hard and your mom worked hard raising kids and working part-time at relatively low paying jobs when time allowed. Your parents later divorced and your mom’s Social Security benefit is now $800 per month while your dad’s stands at $2,000 per month. Rather than continue collecting the $800, your mother is actually entitled to collect $1,000 per month if your dad is still alive and the full $2,000 if he is deceased. As an added benefit, if the Social Security Administration determines a spouse is eligible for increased benefits then that person will receive retroactive benefits going back six months. It does not matter whether the spouse with the higher benefit remarried and getting this increase does not require their cooperation. The Social Security Administration has all the necessary information and makes the determination based on its own records.

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