Thursday, May 4, 2017

Getting Those Ducks in a Row ~~ And Other Ways to Prepare for Divorce

When the call comes in, the innuendo's always the same.  How to minimize the financial harm of divorce before filing? The caller's usually looking for a sketchy solution.  But most lawyers are only inclined and able to give out legitimate legal options. 

A good forensic accountant once told me "paper never lies."  So if there's a depository bank or brokerage account that holds the family fortune, missing funds can be traced and/or accounted for--but at great expense. 

Quick transfers of real estate fall in the same category.  If it's to a friend or close relative, they can be added as parties to the action in many states if the judge feels there's possible fraud (piling up the fees.)

Baby ducks swim in a row behind their mother.  If one strays, the mama scurries back to corral the straggler. 

Above all, pick a good leader.

Here's a few more tips:

1.   Pay off debts and minimize credit card balances.  Generally debt gets spread evenly unless there's special circumstances like one-sided gambling debt or a Rolex purchased for the pool guy.  If that's the case download and save statements.

2.   Create a realistic standard of living:  This doesn't mean moving your spouse to a hovel, but if the two of you are in over your heads in real estate, consider downsizing to a home that either of you can afford on your own.  The most difficult (and expensive) divorces are those where the economic bubble must be burst in the middle of warfare.

3.   Spend more time with your kids.  If a parent is heavily trekking on the work treadmill in order to float the family boat, the opportunity cost with children is high--especially if they are going to be living with you part-time. 

4.  Go to counseling with your spouse.  You may not be able to save the marriage, but you could salvage the relationship.  Navigating your kids' minority years is far easier on them (and you) if you can learn to co-parent with civility.

5.  Establish independent credit.   Credit scores are the new black.  Check your score and work to improve it, if needed.

6.   Educate your spouse about the family finances.  Show him a monthly balance sheet.  Give her a realistic picture of the inflow and outflow each month.  It may be scary, and there may be some resistance, but be mindful that ignorance is never blissful in a divorce.

7.  Start gathering documentation.  In states where separate property is acknowledged, it's typically considered with appropriate and clear documentation.  This takes time.  So pull together those retirement account statements from the wedding year, or get in touch with the company to track your rollover documents.   This can provide your with lawyer better information when she is assessing potential outcomes.

8.  Look for a decent job or freshen up your degree/training.  It's always better (and less frightening) to be financially independent and emotionally engaged in productive work.  Spousal health benefits rarely last a lifetime.  One of the greyest areas in family law is determining how much income to impute to one side or the other.  So long as the job suits your qualifications, that issue is defined.  Just because a spouse has taken a job doesn't mean the other won't be required to assist with spousal support.  Other factors include discernible discrepancy in income, length of the marriage and age/needs of children.  The judge will respond best to a realistic plan.

Make a trusted work mentor aware of what you're going through.  Find an outlet such as exercise to work off stress. 

Above all, get yourself as mentally and physically healthy as possible.

There's a tough road ahead. 

Wednesday, November 23, 2016

The Cost of Divorce

Walking out of a divorce settlement hearing, a client quipped "why are divorces so expensive?"  Without pause he added with a smile "Because they're worth it!"  Not too sure about that one--it's like asking if heart surgery was worth the pain?  Divorce may become unavoidable, but no one pays to play by choice.

Divorce comes at a high price and with an equally high price tag.  The emotional torment to the couple and their families can't be quantified.  A once loved and trusted partner is now the source of immeasurable torment. A happy and secure child sees his world torn asunder.  In the midst of this mayhem, a distraught spouse is expected to navigate the most significant financial transaction of her life.  Uncertainty reigns.  Now it's time to hire a lawyer?

So why do thirty percent of the population chose dissolve their marriages and why do they pay so dearly?  It's because a divorce is multiple claims rolled into one, each of which requires a separate resolution by parties who are in the midst of mental warfare.  If Fido nips a passing ankle, the issue is simple and the liability absolute.

When there's a certainty of recovery, (and insurance coverage) law firms take cases on a contingent fee basis, with no "up front" cost to the plaintiff.  State bar associations do not allow the same investment arrangements in divorce actions. 

"Divorce" loosely defines many complex issues above and beyond the dissolution of marriage.  It's never simple. Where will the children live?  What's the parenting plan going to look like?  How much child support will be paid?  Where will junior go to school?  Will spousal support be paid?  Medical insurance?  What's the value of the family business?  Who pays the attorney fees?  Is a financial expert necessary?  Are there hidden assets?  Abuse?  What about creditors?  The IRS?  The list is nearly endless. 

Family law is like a fingerprint--no two cases are alike. 

Family lawyers charge an hourly rate against a retainer which is used up at that per hour rate.  The price varies by experience and locality.  The State Bar of Michigan periodically publishes an Economics of the Law study based on surveys of practitioners sorted by practice and region.  This help a potential litigant get an idea of average costs per county.

With lawyers one gets what one pays for, so be careful when bargain shopping.  It's about communication during the process and a reasonable outcome.

Discount lawyers can cost dearly in the long run. 

Wednesday, July 27, 2016

Ten Things Your Lawyer Will Never Tell You

Lawyers are all about full disclosure.  We operate in a world of discovery where very little is off limits.  Yet there are some things that your attorney may not be telling you. 

Experienced lawyers are like surgeons.  You don't always get a blow by blow account of the process.  Except in surgery the patient isn't usually wide awake. 

Here's some insight that isn't always verbalized:

1.  There are no guarantees. There are too many variables: the judge, the opponent, how much the other side wants out, and how much each is willing to spend.  If a lawyer seems overly confident in her promises and bluster--be on guard.  It may be solely to charm that retainer right out of your checkbook.  Ask for those promises in writing.  It won't happen.

2.  We get nervous too.  There's often a lot at stake.  Acknowledging the immensity of the issue at hand and the impact any outcome would have on your family is a positive attribute. 

3.  We don't always have the answers.  The key is knowing where to find them or who to call. Sometimes the best answer is "I'll get back to you."

4.  This is gonna take a long time.  Lawyers manage multiple cases in various jurisdictions and often have little control over their own schedules.  Judges acquire thousands of new cases each year.  Still, everyone gets out of the system--eventually. 

5.  The system isn't perfect.  But it's the best there is.  The alternative is inputting the data into a computer, or a slot machine for that matter, and then pulling down that handle...  at least you'd know right away. 

6.  Sometimes it's personal.  Lawyers don't always leave their personal feelings on the courthouse steps.  If it feels like the lawyers are fighting more than the litigants, it's time to lay down swords for a reality check.  Counselor grudge matches only bump up the fees. 

7.  The size of your army doesn't always matter.  The most expensive suit doesn't always get his way.  Preparedness and understanding of the law normally prevails. 

8.  Justice isn't blind.  That judge is watching you in the courtroom!  One eye roll or snicker can cost a litigant the winning point.  Dress like you're going to church.  If the issue is how much you are able to pay, remove the gold chains and Rolex.  Spit out your gum.  Otherwise the clerk may be handing you a tissue right in front of your delighted opponent.

9.  Litigation can be harmful to your health.  I've stepped out into the waiting room, not recognizing a client I saw two weeks hence.  Folks may go on the de-vorse diet, which means either they're not eating or burning up calories in anxious energy, or they may be drowning their sorrows with carbs.  Whatever it is, it's usually temporary--except that new hairstyle.  Those sideburns your wife hated?  You can grow those puppies down to your chin if you like!

10.  Pay attention.  You're paying for our advice--at a hefty price.  My momma always said "you can't learn anything when your mouth is open--except the soup is hot!"

The best tool in your tool belt during this tough time? A realistic outlook and an understanding of the human factor in litigation.

Related articles:

Why Is My Divorce Taking So Long?

Who Gets the Harley?