Charlotte Divorce Lawyer Blog

Equitable Distribution – The Scoop on Joint Accounts

Published on: July 12, 2012 | On behalf of Arnold & Smith, PLLC

It happens all the time, people sign on the dotted line creating joint accounts. Credit cards, bank accounts, car leases, etc. Many of us do it without even thinking. What we may not understand is just how important that decision is to our financial future and how hard a decision it can be to unwind. The following are some important things to know before opening a joint account.

First, joint credit can mean many different things. The first kind of common account is a one that is truly split. This means that you are both partners on the account and fully liable for the loan. It’s important to realize that if your partner flakes out you are liable for 100% of the debt, not just 50%.

Another variety is an account where you are listed as an authorized user. In such accounts you are allowed to use the card but have little or no responsibility for ever repaying the debt. If the debtor defaults it is possible that some lenders will attempt to collect from you, especially for the purchases you made.

A final variety is a co-signer situation. In these cases you are signing on to be responsible for the entire amount of the debt even though the credit has been issued in another person’s name and you are not permitted to use it. If the borrower messes up, this bad behavior can be reflected on your credit history as you signed up to be on the hook.

Second, ending a relationship could potentially lower your credit score by reducing your income level. If your income drops and creditors pull back your credit limits there could be a real impact to your credit situation. One way to avoid this is to keep using some of your individual accounts while in a relationships.

“Gray Divorces” Present Unique Challenges

Published on: July 10, 2012 | On behalf of Arnold & Smith, PLLC

We’ve said it before, but the trend known as “gray divorce” appears to be picking up steam. The numbers of senior divorces in the country continue to grow and with the baby boomers aging the amount will likely rise even faster.

Susan L. Brown and I-Fen Lin at Bowling Green State University’s National Center for Family & Marriage Research Center conducted research that indicated the divorce rate among those over 50 years old had doubled between 1990 and 2009. This shocking figure was true even for those over the age of 65 showing it is not a phenomenon limited to divorce-prone boomers.

These same researches are predicting that the trend will only continue to escalate. The reason is that those who have already been through one marriage and are now remarried are more than 2.5 times more likely to divorce again than those who are still on their first marriage.

The reasons for the trend are hard to nail down and include everything from the larger number of older people, the age those people are living to, a greater acceptance of divorce, rising female empowerment and an increased emphasis on living a happy life.

Regardless of the cause, the trend has important financial implications for those going through a late in life divorce. The first thing to understand is that single life can be expensive. It’s not a simple matter of splitting all the bills in half. There’s a magnification to dividing bills and separate households are much more expensive to run than half of a marital household.

Beyond living expenses are the ordinary legal expenses associated with divorce. New legal documents will need to be drafted, often more than if you had divorced at a younger age. Wills will need to be redone, health directives, insurance polices, etc. Make sure you have a skilled North Carolina family law attorney on your side; you want someone experienced and capable of handling things amicably. At that age there’s no reason to try to end up inside a courtroom, the process is too expensive and could mean that a stranger decides what happens to your belongings.

Adoption Laws in California to Allow Multiple Parents?

Published on: June 21, 2012 | On behalf of Arnold & Smith, PLLC

According to an interesting article on Yahoo, California, a state already grappling with a wide array of legal issues surrounding alternative families, has added one more to the mix. The most recent bill, SB1476, would allow children to be legally given more than two parents.

As written, the bill would apply equally to men and women, regardless of whether they were in homosexual or heterosexual relationships. The bill’s sponsor, State Senator Mark Leno, D-San Francisco, says that the bill is meant to bring the state into the 21st century and acknowledge that complicated family situations exist. He says the state must recognize that “there are more than ‘Ozzie and Harriet’ families today.” The bill has already passed the state Senate and now awaits a vote in the state Assembly.

Senator Leno said he first realized there was a problem with the current system last year when he read about an appellate court placing a girl in foster care after her legally married lesbian parents were unable to care for her. The child was taken into state custody after one of her mother’s was put in prison and the other was hospitalized. The court was not allowed to appoint the girl’s biological father, with whom she had a relationship, as a legal parent. Something that Leno believes would have greatly benefited the welfare of the child.

The law would require that parents qualify under all legal standards and agree on custody, visitation and child support before a judge could divide up responsibilities. If California passes such a law it won’t be alone, already Pennsylvania, Delaware, Maine and the District of Columbia have laws on the books recognizing more than two parents.

The bill has some strong opposition. Glenn T. Stanton, from the group Focus on the Family, argues that though the bill appears to advocate for children, it is actually a tool to allow adults to create what he calls “radical families.” He says that children are best cared for by one mother and one father and “this bill would only take us farther down the trail of more ‘experimental families’ that fulfill adult desires, but consistently fail our children.”

Impact of Separation and Divorce on Paying for College

Published on: June 19, 2012 | On behalf of Arnold & Smith, PLLC

Though college has always been expensive, the amount of money needed nowadays is bordering on ridiculous. According to U.S. News and World report, the average tuition for a private university now exceeds $35,000 per year while kids in public schools can expect to pay almost $20,000. With costs so high it is no wonder that parents have difficulty affording putting their children through school. Unfortunately, the children of divorced parents are often the hardest hit, making a bad situation even worse.

One case that recently made the news highlighted the extent of the problem. Dana Soderberg, a young woman in Connecticut, filed suit against her father for his failure to pay her college tuition. Her parents were divorce back in 2004 while she was attending college. Her father signed a contract with Soderberg saying he would agree to finance her education until she was 25 so long as she diligently attended class. During her senior year her father stopped paying and his daughter slapped him with a lawsuit. The judge sided with the daughter, awarding her $47,000 plus attorney’s fees.

Thankfully it’s very rare for a legal dispute to rise to such a level. Typically, when a parent falls behind thing are worked out long before a lawsuit becomes necessary. However, the suit does point out a larger problem that disproportionately affects the children of divorced parents.

Divorce Advice for Talking with Your Children about Separation and Divorce

Published on: June 14, 2012 | On behalf of Arnold & Smith, PLLC

If you’re facing the prospect of divorce one of the hardest things to deal with is likely how to tell your children. You worry how they’ll handle the news and fear that they will think it was in some way their fault. You may worry that they’ll lose the sense of stability they’ve come to depend on. It’s important when the time comes to sit them down that you both convey that you will still be there for them, no matter what happens in your marriage. The following are some tips on how to best handle a very difficult conversation:

• Agree on what you’re going to say
The two of you should find time to sit down before talking to the kids to decide on what you are going to say. Get your story straight so that no one contradicts each other. You don’t want to start arguing in front of the kids, you need to be a united front. If you need help communicating effectively as your relationship has broken down so far, consider going to a therapist or a religious leader who can serve as mediator.

• Tell them as a couple
If possible, you and your spouse should tell the children together, even if it’s hard. You may have a great deal of anger towards your spouse, but it’s better for the kids to put that aside and work together during this moment. Convey to them that though the marriage is ending, you will both work together and cooperate as parents. Make sure they know that you’ll both remain active in their lives.

• Be nice to each other (or at least pretend)

It’s important that when you talk to the kids that neither of you blames the other one for the dissolution of the marriage. Don’t attempt to curry favor with the kids, you don’t want to put them in the middle and make them feel like they have to choose sides. Both behaviors are unfair to your kids and can cause lasting emotional harm. It can also blow up in your face and make the child feel closer to the maligned parent.

• Be honest, but keep comments age appropriate
Be honest but remember the children’s ages when telling them the news. Avoid sharing any personal details about the split, they don’t need to know the nitty gritty details of your marriage. Tell them only as much as they need to know, no more. Don’t pretend everything will be the same, prepare them for some of the changes to come and don’t make promises you can’t keep. Make sure to explain that the divorce has nothing to do with them, this is crucial.

Divorce Advice for Victims of Abuse (According to Forbes Magazine)

Published on: June 12, 2012 | On behalf of Arnold & Smith, PLLC

Women that have suffered through an abusive relationship face many of the same hurdles than any women do when going through a divorce. The only difference is that each step of the long divorce process is made more difficult by the looming presence of an abusive spouse.

It’s often the case that women in abusive relationships have no access to money, no financial documents, no clue of how much money exists in the accounts or how many accounts there are to begin with. They may not have a credit card or checking account in their own name and may be used to detailing how every penny has been spent. Such controlling relationships present ample opportunities for the husband to squirrel away assets because, after all, questioning isn’t permitted.

If you feel trapped in an abusive relationship, there are steps you can take to begin to secure your finances and prepare for an exit. If it can be done safely, you should consider the following suggestions:

• Get a post office box so you can get your mail safely and securely.

• Open a bank account in your own name and start putting away money. Make sure your paycheck is direct deposited into your account rather than the joint checking.

• Keep copies of your important paperwork, including bank statements, marriage certificates, social security numbers, etc. It’s probably a good idea to have a safe place outside of the home to store such documents.

• Obtain a credit card so you have access to money if you find yourself cut off from your husband.

• Open a new, private email account that you can use to securely communicate with an attorney and other divorce professionals. You can even use a public library to access the account if you’re worried that your home computer is not safe or has malware or key logging software installed.

• Change your PIN’s to a number that your husband won’t easily guess.

• If at all possible, avoid signing any documents handed to you by your husband.

• Finally, and most important, make arrangements with family or friends for you and your children to move out of the house at a safe time.

Can Divorce Lawyers in Charlotte Consider VA Disability Benefits in Alimony Cases?

Published on: June 7, 2012 | On behalf of Arnold & Smith, PLLC

A 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.

For a Cheap North Carolina Divorce Start Cooperating

Published on: June 5, 2012 | On behalf of Arnold & Smith, PLLC

Here’s something that should not come as news to anyone going through the process: divorce can be expensive. When a couple decides to end their marriage, it is almost always for personal reasons but these emotional issues can quickly change into fights over money. The result can be financial destruction for both parties. Everybody loses, except the attorneys. The bit of good news is that it doesn’t have to be this way. Divorce doesn’t have to destroy both parties financially; the decision rests in your hands.

If you want your divorce to stay calm (and less costly) you have to keep some of the emotion out. Years of bitterness have built up but you can’t let that distract you from the goal of reasonably dividing assets. Deal with your emotions in therapy, not in a battle of lawyers. Your divorce should be about dividing property, not righting wrongs.

Many couples fall into one of a few traps that lead to the endless cycle of fighting and pumped up divorce fees. Watch for the following issues and you can help avoid financial disaster.

• Anger – Couples that carry around bitterness or jealousy and approach divorce like a war can result in sky-high legal bills. If the couple is out to destroy one another then the result is often mutual destruction.

• Ignorance – Not understanding the process, the couple can make expensive mistakes that take time and money to undo.

• Speed – Couples that are in a dead rush can create more problems than they think they’re solving. When one party is so eager to finish the marriage they can make rash and ill-advised decisions which lead to terrible consequences down the road.

• Delegation – While you certainly need to rely on the advice of your attorney, don’t turn the whole process over and let them run the show. If you are hands off then your lawyers can get into a paper war which succeeds only in raising their fees and draining you of money.

Now that you know what leads to the problems, here are some strategies that can be employed to keep costs from ballooning out of control:

Equitable Distribution Lawyer – Divorce and Its Impact on Retirement Accounts

Published on: May 31, 2012 | On behalf of Arnold & Smith, PLLC

As we’ve discussed on the blog before, divorce does not only affect the young. Instead, the trend of baby boomers splitting continues to increase with about one in every four divorces happening with people over the age of 50. Divorce at this age presents challenged not likely to be encountered by those in their 20s and 30s.

One such issue is what happens to retirement accounts, pension plans and Social Security benefits. For many couples, retirement accounts represent a considerable chunk of their net worth, and as such, they must be addressed in divorce settlement agreements. Unfortunately, dividing retirement accounts and pension plans is a complicated process that involves tax and other financial considerations. Some of the important things to know about the process are listed below:

• Retirement funds created during the marriage are typically viewed as marital property.

Contributions to 401(k) are made via deductions from salary, pension plan benefits are a function of years on the job and salary earned, and husband and wife, regardless of whose account it is, often count on the money from both. Retirement funds added during your marriage are typically treated as marital property. However, if a spouse enters the marriage with money already in his or her 401(k), those funds are generally considered separate property, and are not included in the division of assets. It is possible that the increase in value of the separate property could be considered marital property, but that’s not always the case.

• Any retirement assets that are marital property can be divided, but the process depends on a number of factors.

When dividing 401(k) or 403(b) plans, the court must follow federal guidelines. When IRAs are involved its state law that dictates the division process. It’s important that your settlement agreement clearly explain how assets will be divided and how the funds will be transferred.

Same-Sex Adoption Laws Lead ACLU to Sue North Carolina

Published on: May 29, 2012 | On behalf of Arnold & Smith, PLLC

The same-sex marriage controversy in North Carolina deepened after it was recently announced that the American Civil Liberties Union (ACLU) filed suit against the state to overturn their laws that prevent gay and lesbian couples from adopting their partners’ children. The lawsuit was filed on behalf of six couples from the state who are seeking to adopt the children of their partners.

The couples are attempting to receive what’s known as a second parent adoption. This occurs when one unmarried partner adopts the other’s biological or adopted child. The North Carolina Supreme Court has banned such second-parent adoptions for same-sex couples. The ACLU claims that the law prevents same-sex couples from providing for the safety and securing of their children by not allowing them to be adopted.

In 2010, the state Supreme Court held that a lower court made a mistake by approving an adoption by a woman’s same-sex partner. The justices ruled that the same-sex partner was not a legally recognized parent of the minor child. The case at issue involved attempts by former State Sen. Julia Boseman, D-New Hanover, the legislature’s first openly gay member, to adopt her former partner’s biological son.

In their brief the ACLU says that, “There is no basis for the state automatically and categorically to reject any petition for second parent adoption by gay or lesbian parents – without even considering what is best for the children.” The group continues, arguing that, “The question of whether an adoption by a second parent is in an individual child’s best interest can be determined only through an individual review process, not through categorical bans such as that applied in North Carolina.”

The ACLU says that some of the benefits that come with a second-parent adoption include: ensuring that the children in the family are covered if one partner lacks health insurance; ensuring that families will stay together and children will not be taken from their home if something should happen to the biological parent; and ensuring that either parent will be allowed to make medical decisions or be able to be at their child’s bedside if one of their children is hospitalized.