Articles Posted in Financial Issues in Divorce

Child support in a divorce case is often a contentious issue for divorcing parents. Divorce consultant and author Lee Block discussed child support issues in the Huffington Post’s new Divorce section of this online journal. Ms. Block states:

Child support is always a hot bed of discussion. There are several reasons for this and the main one is, what exactly does child support cover? There are so many questions about child support and frankly no good answers. Child support becomes an emotional issue instead of a financial one, and everyone has a different view and opinion of what it should cover and how much should be paid.

Illinois child support statutes do not make the subject of child support easier to manage. While some of our neighboring states have adopted sophisticated matrices for allocating between both parents the burdens of financial support of children in a divorce, Illinois still requires that (a) the court determine a “residential parent” (ie a winner and loser of custody), and (b) for the “non-residential parent,” a percentage payment based on their net income.

One of the hallmarks of an impending divorce is a noticeable change in financial status within the family household. Retirement plans get moved to new accounts. Joint checking accounts and credit card accounts begin to show unusual activity, such as unexplained charges or cash withdrawals. Some spouses will defer discussing the desire for a formal divorce until they have, in their mind, secured the family cash and the assets in a hidden account.

Judges will eventually require the return of marital assets to marital accounts, but all of us that work in the court system know that getting these injunction orders takes time and effort. It can be far better to be proactive in protecting marital assets, and securing copies of accounts, once the financial “red flags” of impending divorce start to appear.

I’ve provided a list of 12 items you might gather to ensure that you have most of the critical information in hand before your spouse has a chance to conceal, transfer or sell marital items. These include (but are not limited to) obtaining:

The following is a hypothetical example, but a very real description of a family dealing with legal issues in a recession:

When Patrick and his wife divorced, they agreed to sell their home. Yet, once a buyer gets close to making an offer, his wife backs off, believing she can buy him out of the house with housing prices (and the equity buy out price) dropping each month.

To complicate matters, Patrick, not his real name, recently lost his job. He is going to go back to court and ask that his child support be reduced. According to legal experts from around the country, Patrick’s tale isn’t unusual. The recession that’s affected every other aspect of America is now affecting family court as well. Clients are returning to court as a way to deal with financial hardships that are affecting their support obligations and property settlement agreements.

Just as fuel efficient cars become more popular during a period of high fuel prices, cost effective legal representation in divorce cases becomes a welcome path for people looking to end their marriages. The Law Offices of Michael F. Roe has consistently advocated cooperative, mediated, and collaborative divorce as a lower cost, efficient, and low stress means of helping divorcing parties complete their divorce in a financially healthy way, even in a deep recession.

The deepening recession, increased unemployment, and a stalled housing market have negatively impacted most parties’ financial situations. Many divorcing couples’ homes are “under water” because of declining values and high mortgages. Other divorcing couples who are fortunate enough to have equity in their most significant marital asset, their home, cannot sell their house due to the slow real estate market. Combine that with the plummeting values of retirement accounts, and we are looking at marital asset balance sheets that are nothing less than bleak.

Although, historically, divorce rates tend to rise during a bad economy, divorce attorneys nationwide have noticed a change in the legal landscape. Some experts attribute the decline in divorce filings to the severity of the economic downturn. Typically, a recession results in decreased divorce rates for couples with limited financial resources. The prospect of incurring expenses for two households seems overwhelming for those with limited resources. On the other hand, high net-worth clients may seek to take advantage of the diminished value of their homes, stock and investment portfolios, and businesses to decrease their overall financial liability to their soon-to-be ex-spouse.
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1. Hanging onto the house at all costs.

Many couples scrambling to obtain a divorce settlement wish to keep the house at any cost. However, keeping the four bedroom marital home may be a financial undertaking that neithe rparty can absorb in the post-divorce environment. Maintenance and child support to the recipient parent can help fund the mortgage and taxes, but some parties find that the burdens of keeping the marital home post-divorce outweigh the benefits, especially in this current home market/mortgage environment.

2. Failing to make a clean financial break.