Sunday, 24 June 2018

How to Divorce-Proof Your Business

It can happen to the best of entrepreneurs. While a new business owner is putting in long hours to build a business, a marriage can fray. The next thing the owner knows, his or her spouse may be filing for divorce.

This scenario is all too common. Forty percent to 50 percent of all first marriages in the U.S. end in divorce, according to a 2010 report by the National Marriage Project at the University of Virginia. The divorce rate for second marriages is even higher.

How to Divorce-Proof Your Business

For those whose marriage is in trouble or who are about to begin a divorce, a few strategies can help preserve a business. Once the divorce proceedings start, entrepreneurs won’t likely be able to implement some other legal maneuvers that, if accomplished in happier times, could keep their business from landing in a soon-to-be ex’s possession.

Businesses Can Be Destroyed By Divorce

If you’re not careful in a divorce, you could find your ex is your business partner — or you could be fighting to keep your enterprise from being sold to raise cash.

Or you might lose the business to your ex. That’s what happened to Tereson Dupuy, founder of FuzziBunz, an online cloth-diaper business based in Lafayette, La.

Dupuy launched the company three years into her marriage after seeking better diapering options for her second child. But in 2005, close to the couple’s 10-year anniversary, the marriage unraveled. Dupuy discovered FuzziBunz would be considered a joint marital asset. Louisiana is one of a handful “community property” states, including California, which assume each divorcing spouse owns half the property accumulated during the marriage.

Dupuy says the stress of the divorce drove her into a nervous collapse and within 24 hours a judge put her husband in control of the company.

It took Dupuy a year and a large lump-sum payment to her ex — plus $15,000-a-month payments to her ex over many years — to regain ownership. The payments drained cash, and bankers considered her need to pay them outstanding debt, making it hard for her to borrow needed growth capital.

Is your marriage headed toward a divorce?

Here are seven strategies to consider if a divorce is threatened or already underway and your company is considered a joint asset.

  1. Keep the family’s finances separate from those of the business. “Don’t borrow out of the house [account] to buy company trucks,” Kornitzer says.
  2. Pay yourself a good salary. If you starve the family’s cash flow to build the business, a lawyer might later make the case that your ex is entitled to more of the company’s assets.
  3. Fire your spouse. If your spouse is actively involved in your business, ease him or her out as soon as possible, says divorce lawyer Daniel Clement, principal of New York City family law firm Clement Law. The more prominent the ex’s role and the longer he or she worked in the business, the stronger the case a lawyer could make that this spouse helped build the enterprise and should profit from its growth.
  4. Sacrifice other assets. In a divorce settlement, a couple’s total assets are added up and then divided. Try to retain 100 percent ownership of the business by forfeiting other assets instead, such as retirement accounts, the family’s home, vehicles or collectibles, Clement says.
  5. Get a fair valuation. Use a neutral, court-appointed valuation professional and then arrange for another outside party to review the figure before you agree to it, Clement says. Dupuy wishes she had challenged FuzziBunz’s valuation, which was based on a projection of 10 years of future growth rather than current revenue, she says.
  6. Arrange to make any payments over time. It’s common to pay an ex for a share of a business gradually, as Dupuy did. The monthly payments can come from the business’s cash flow or a bank loan.
  7. Raise capital by selling a stake. You could sell a minority stake in your business to employees through an employee stock ownership plan, Landers says. Or find an angel investor or two who will pay cash in exchange for an ownership stake.

One bright spot for entrepreneurs: It’s rare that a business ends up being sold off to satisfy a divorce settlement, Clement reports. That’s because it would deprive the business owner of the future income needed to pay support payments.

Preventive Moves To Protect Your Business in Divorce

Take action while your relationship is still rosy and you may greatly increase your odds of surviving a divorce with your business intact.

 

Here are five pre-emptive strategies that can help protect you from losing your business in a divorce.

 

  1. Sign a prenup. If your business existed before you wed, designate it as separate property owned by only you.

 

  1. Secure an early postnup. This is much like a prenup, except the agreement is signed after the wedding. If a postnup is done long before the marriage disintegrates — ideally more than seven years before a breakup – it might be useful in defining a business as separate property. But judges often view postnups skeptically.

 

  1. Place the business in a trust. This keeps the business from being counted as a marital asset as you no longer personally own it. The move also protects the value of the company’s growth.

 

  1. Create a buy-sell agreement. It defines what happens to a business should any owner’s status change, as is the case in a divorce. The agreement might limit a spouse’s ability to acquire ownership, deprive a divorcing spouse of voting rights, or give you or other partners the right to buy at a low, preset price any interest awarded the ex.

 

  1. Have insurance. A whole-life insurance policy that builds cash value can be liquidated to provide the funds to buy out a spouse’s share of the business, if need be.

Free Consultation with a Divorce Lawyer in Utah that Can Protect Your Business

If you have a question about divorce law and how to protect your business in a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews


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Saturday, 23 June 2018

Filing for Divorce While Living Abroad

Although this article provides a basic overview of international divorce, we are by no means suggesting you should handle a foreign divorce on your own. Transnational divorce is a complex and a fairly new field of the law. You should speak with an experienced family law attorney who can guide you through this process and ensure your divorce is valid.

Filing for Divorce While Living Abroad

When the Filing Spouse Lives Overseas

Filing for a divorce while living abroad often presents complex legal questions. First of all, you may need to abide by local law in order to get a divorce. If so, you should contact the U.S. Embassy or Consulate in your area to obtain a list of local attorneys that can help you get the divorce process started.

Check the U.S. Department of State’s website for a list of all U.S. Embassies, Consulates and Diplomatic Missions and a link to their websites.

Will the United States recognize a foreign divorce decree?

The short answer is yes, but only to a certain extent and not in all circumstances. Most states recognize divorce decrees from foreign countries as long as the foreign country ensures certain procedural requirements have been met (such as proper notice to the parties). To find out if a foreign divorce decree is considered valid or is recognized in your state, contact your state’s Attorney General. You could also contact an experienced family law attorney in your area.

Although a United States court is likely to recognize a foreign divorce decree as having terminated your status of being “married,” foreign divorce orders may not be effective for dealing with all of the issues in your divorce. For example, if your children are U.S. citizens residing in the United States and you file for divorce while living abroad, the foreign court is not likely to issue orders regarding custody of the children, because it will not have jurisdiction (authority) to make child custody orders over U.S. citizens living in the United States. And, even if the foreign court issues orders that purport to deal with the custody of your minor children, a United States court is not required to honor such foreign custody orders. The United States court (the local state court) will have jurisdiction over the children and will issue its own custody orders.

Finally, a foreign divorce decree may not be effective to divide property, such as retirement benefits, located in the United States.

When the Filing Spouse Lives in the United States

If you are living in the United States and want to file for divorce from a spouse that’s living abroad, you’ll want to talk to an experienced attorney who can guide you through the process and make sure you are taking all necessary steps.

First, you’ll need to file a petition (paperwork) for divorce in your local court, and make sure you meet state and local residency requirements. You’ll also need to have a copy of the divorce petition and a summons “served” (meaning personally delivered) on your spouse, unless your spouse agrees to waive (forgo) the process requirements. If your spouse agrees to waive personal service of process, then he or she can sign an affidavit stating they have been served, and you can file that with the local court and move on to the next phase of the divorce.

If not, and your spouse insists on service of process or tries to avoid service, things will be more complicated. You may need to comply with the laws regarding service of process for the foreign country where your spouse lives. If the country where your spouse lives is a member of the Hague Service Convention, it will govern the international service of process. If not, you’ll have to figure out how service can be completed. In some countries, you may serve the summons by a letter request or “Letters Rogatory,” while in others you must have the paperwork served on a central government authority or an overseas agent who will then guarantee delivery of the papers on your spouse. In all cases, you’ll probably want to speak with an attorney here in the United States and an attorney in the foreign country who can make sure service is being handled correctly on that end.

Next, the local state court will need to determine if it has jurisdiction (authority) to make orders over your spouse. This will depend, at least in part, on the extent of your spouse’s contacts with the state. Whether or not the local state court can issue orders over your spouse in the divorce proceeding will also depend on a variety of other factors, including whether or not you seek orders regarding custody of the children or division of property. Your attorney(s) will need to perform a careful analysis of the facts of your case and the laws regarding your spouse’s country of residence.

Overseas Divorce in the Military

The divorce process for U.S. military spouses can be a bit trickier than civilian matters, as the U.S. military has its own codes and processes that govern divorce-related matters. In this situation, you should consult a lawyer with experience in military divorce to ensure that the filing, processing, and serving of divorce papers are all handled correctly.

Free Consultation with a Utah Divorce Lawyer

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews


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Friday, 22 June 2018

AB Trusts

AB Trusts

Normally, when one spouse dies passing on his/her assets in a last will and testament, the estate will be taxed heavily before the beneficiaries receive it. To avoid this steep estate tax, spouses can set up an AB trust, where each spouse leaves their property to an irrevocable trust. When it comes to estate planning, an AB trust is a trust created by married couples to maximize their federal estate tax exemptions. A lot of people believe that AB trusts only benefit those with large estates. The truth is anyone who may owe estate tax can benefit from an AB trust.

 How the AB Trust System Works

When the first spouse dies, the beneficiaries (usually the couple’s children) named in the trust receive that spouse’s property. However, this irrevocable trust is to be used for the benefit of the surviving spouse, who does not technically own the property. There is a crucial condition that the property can be used by the surviving spouse and that the surviving spouse may even spend principal in certain instances. Once the surviving spouse dies, all the property rights and benefits of the irrevocable trust pass to the surviving beneficiaries of the trust. Because the surviving spouse does not own the property, it is not subject to estate tax. Setting up an AB trust this way keeps the portion of the surviving spouse’s estate that is taxable half of what it would be without an AB trust.

Surviving Spouse’s Rights Over the Assets

As mentioned, the AB trust is left with the condition that it is to benefit the surviving spouse. This gives the surviving spouse some power over the assets, depending on the provisions of the trust. This is a part of probate law that some people struggle with.

The surviving spouse’s rights and benefits include receiving all income from the trust property, including:

  • Interest
  • Using the property
  • Spending to benefit his or her health, support and maintenance, standard of living, and education

The surviving spouse maintains these rights until her death, at which time all of the property is distributed to the beneficiaries of the original trust, and all of the surviving spouse’s property is distributed to his or her beneficiaries.

Disadvantages of an AB trust

The AB trust is irrevocable. Once one spouse dies, there cannot be any changes made to the trust. This can create some issues and has even caused friction between the surviving spouse and the named beneficiaries of the trust. As mentioned, the surviving spouse’s rights to use the property are limited. Where at one time this used to be the property he or she shared with his or her spouse, to do with as they pleased, this property is now restricted to certain uses and rights.

Settling and distributing property in an AB trust can be expensive and often requires a lawyer and accountant. Furthermore, these tax laws are always changing. You’ll need to keep current, or hire a professional to keep you current, on these changes and what they mean for you and your trust. These changes may even encourage you to change or even revoke your trust.

There is a lot of paperwork and bookkeeping required in an AB trust. The surviving spouse needs a tax ID number for the irrevocable trust and must file annual income tax returns on the trust. He or she must also keep records of all the AB trust property.

Is an AB trust is Right for You?

An AB trust is best suited for those married couples who are both over the age of 60 and do not have children from previous marriages. Often times when there are children from previous marriages conflicts arise between the surviving spouse and the deceased spouse’s children about who should share in the assets. If you think an AB trust might be for you or you have more questions, you should consult an attorney who can advise you based on your specific circumstances and your specific needs.

Free Consultation with a Utah Estate Planning Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC
4.9 stars – based on 67 reviews


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Thursday, 21 June 2018

Child Visitation

Biological parents have a right to seek child visitation or child custody. This is true regardless of whether the child’s parents were married when the child was born. Like other child custody decisions, courts use the best interest of the child to decide disputed child visitation or custody cases involving unmarried fathers. Unless evidence indicates otherwise, courts making child visitation decisions presume that involvement of both parents benefits the child.

Child Visitation

You Need to Establish Paternity if You’re Not Married

Fathers who were not married when their child was born must legally establish paternity in order to gain access to father’s rights. Often, this simply means both parents signing and filing an acknowledgment of paternity with the appropriate state agency or court, either at the time of the child’s birth or afterward. In disputed paternity cases, a legal process including DNA testing will conclude with a court order stating whether the man in question is the child’s biological father.

Once paternity is established, a father may pursue child visitation or other child custody rights. Many states offer simultaneous filing for recognition of paternity and for visitation or custody rights.

Child Visitation and Child Custody Agreements

Either before or after a legal process has begun, many parents negotiate a parenting agreement (also called a parenting plan). A parenting agreement can include a wide variety of details including which parent will have primary custody, specifics on the other parents visitation periods, particulars on which parent will make decisions regarding the child’s education, health care or religion, as well as procedures for the handling of potential changes to the arrangement.

Court Orders on Child Visitation or Custody

Either after securing a parenting agreement, or if unable to agree, either parent may petition the court for child visitation or custody help. Parents who can agree to a parenting plan may file it with a court, asking the judge to approve and incorporate it into a court order on visitation and/or custody. Having the agreement become part of a court order allows either parent a direct way to enforce his or her parental rights.

If the parents cannot agree on visitation or custody arrangements, either one may ask the court to grant his or her request through a contested hearing. Courts deciding visitation and other custody issues focus on the best interest of the child. Generally, courts presume that children benefits from having both parents involved in their upbringing. This presumption can be overcome if one parent can show that visitation or custody by the other parent would likely cause harm to the child. For example, evidence of domestic violence or drug problems could be used to argue against a parent having custody or visitation with a child.

It is rare for fathers to win sole custody of a child already being raised by the mother. To do so, an unmarried father would likely need to show that the mother is unfit to raise the child and/or that he has been the child’s primary caregiver. Child visitation or shared custody rights, however, allow many unmarried fathers to play a consistent role in their children’s’ lives.

Should arrangements need to change, the court can modify the child visitation or custody order, either after both parents agree to the change, or after one parent petitions the court to make the change. Some states allow parents to agree on modification to visitation arrangements without a courts approval, however, a modified updated court orders allow easier enforcement of agreed arrangements.

Get a Free Evaluation of Your Child Custody and Child Visitation Concerns

Each state has their own laws surrounding child custody, child visitation, and the role of unmarried fathers. In Utah, the quicker you act the better off you are. While unmarried fathers do have parental rights, understanding the boundaries and limitations of those rights is important moving forward. You should
contact a Utah child custody lawyer right away to protect your rights or you will lose your rights. A local family law attorney with experience in these matters can help you avoid problems and give you peace of mind. Get started today with a free legal evaluation of your case.

Free Consultation with a Utah Child Custody Lawyer

If you have a question about child custody question or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
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4.9 stars – based on 67 reviews


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Wednesday, 20 June 2018

Living Will

Living Will

The term “living will” is a bit of a misnomer, as living wills are not wills in the traditional sense. A typical will takes effect upon a person’s death, providing instructions such as for the distribution of his or her property and other assets. A living will, on the other hand, allows a person to specify medical treatment and care instructions that take effect while he or she is still living. This is a part of estate planning. For example, if a person becomes mentally incapacitated or otherwise unable to make or communicate health care decisions, a living will provides family members and hospital personnel with the person’s medical care instructions and preferences. This section provides information and resources related to living wills and other health care directives. You’ll also find an overview of state living will laws, a sample living will form, and a discussion of a health care power of attorney.

What Is a Living Will?

A living will is a legal document that contains a person’s medical care and treatment instructions. The purpose of a living will is to allow a person to express health care decisions while he or she is mentally able to do so. In general, health care providers are required to obey the instructions contained in a person’s living will.

What Types of Procedures Are Covered in a Living Will?

States have passed laws covering living wills and other forms of health care estate plans. Because there are differences in these laws, it’s important to be fully informed of applicable regulations and requirements as you begin to plan your living will. In many states, a living will allows a person to express instructions concerning the use of a respirator to maintain breathing, the use of procedures such as blood transfusions and dialysis, and the injection of intravenous fluids and nutrients to sustain life. Keep in mind that a living will allows you to both refuse and to accept certain forms of treatment. For example, a person can refuse to undergo blood transfusions while stating an intent to receive intravenous drugs.

Benefits of Creating a Living Will Now

A person who creates a valid living will can feel secure in knowing that his or her medical care instructions will be honored. By creating a living will or other similar plan, you can avoid unwanted medical treatments and their associated costs. As an added benefit, your family members and friends will have advance knowledge of your medical and end-of-life care preferences. This can prevent emotional and harmful disputes from occurring.

Health Care Power of Attorney or a Living Will?

An alternative to drafting a living will is creating a health care power of attorney. This is a legal document that allows one person to grant another person the authority to make medical care and treatment decisions on the first person’s behalf. If you have a trusted family member or close friend who is a medical care professional, a health care power of attorney relationship can be a good idea. In Utah, you really should use the Advanced Health Care Directive that the Utah Legislature has put into place. A Utah lawyer can help you with this.

How an Attorney Can Help with your Living Will

If you have questions about living wills and other types of health care estate plans, an attorney can answer them. He or she can also help you to create a living will that reflects your intentions and wishes. This section provides a link for consulting with an experienced estate planning lawyer in your area.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
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Tuesday, 19 June 2018

Estate Planning Help

Estate Planning Help

If you need immediate help with an estate planning issue involving a will, trust or estate, or would like to contact an estate planning attorney, you’ve come to right place. Because state laws vary considerably and communicating this essential information without vagueness while still complying with local rules can be complicated most people will benefit from the assistance of an attorney in preparing and executing the final documents. However, the better your understanding of the requirements, the easier and more effective your time with an attorney will be. Please select from of the following topics to learn more about getting legal help with an estate planning issue.

Estate Planning Forms and Tools

Examining the standard forms for a basic will, health care power of attorney, living will directive to physicians, designation of surrogate, and other important estate planning forms and checklists can help you better understand the purpose and structure of these legal devices. These tools are meant to be the beginning, rather than the end of a process of structuring the documents that help communicate your wishes to health care providers and courts in situations when you are unavailable to speak due to death or disability.

Materials in this section include an estate planning case intake questionnaire that can help an attorney determine which estate planning tools you need, an estate planning checklist to help ensure that you have considered all aspects of estate planning that are commonly needed, a checklist of action items for an estate executor organizing the actions required for an individual in this role, and sample documents including a basic will, a living will, a health care power of attorney form, and more.

In addition to basic forms and checklist there are articles that provide state-specific forms for advance directives and living wills and an article discussing the advantages of various estate planning tools.

Using an Estate Planning Attorney

Organization and preparation are always helpful if you are planning to meet with an attorney. Since time for a consultation may be limited, or the attorney may charge an hourly rate, the time spent preparing yourself and your paperwork can often translate into a cheaper and more thorough analysis of your needs. To help you prepare there are materials provided here that can help ensure that you present the information an attorney needs to help you plan your estate.

One such tool is an intake questionnaire designed to help organize the information most relevant to estate planning. This form will help you present your attorney with information about the property and family connections that most frequently affect which documents are necessary and how they should be structured. The form also asks questions designed to help you and your attorney determine which kinds of estate planning tools are most appropriate for your needs.

An experienced estate planning attorney will work closely with you to develop a set of estate planning documents that address your concerns in a way that is right for you. They will ensure that your wishes are communicated clearly and with the maximum weight of the law, while also anticipating and avoiding negative tax implications by consulting with expert accounting and tax advisers in some instances. Finally, they prepare and execute all of the necessary documents such as wills, living trusts, testamentary trusts, and powers of attorney.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
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84088 United States

Telephone: (801) 676-5506
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Monday, 18 June 2018

Top 10 Mistakes to Avoid in Your Divorce Case

Here are the top 10 mistakes you absolutely must avoid when you are in a divorce case.

Becoming a Financial Victim

The biggest mistake divorcing spouses can make is being in the dark about finances. If your spouse has always handled all of the financial decisions in your household and you don’t have any information about you and your spouse’s income and assets, your spouse will have an unfair advantage over you when it comes time to settle the financial issues in your divorce.

Top 10 Mistakes to Avoid in Your Divorce Case

If you suspect your spouse is planning a divorce, get as much information as you can now. Make copies of important financial records such as account statements (eg., savings, brokerage, and retirement) and all other data that relates to your marital lifestyle (eg., checking accounts, charge card statements, tax returns).

If you believe your spouse may liquidate (sell or transfer to cash) assets or retitle marital assets without your consent, notify the holder of the asset or property in writing and get a restraining order from the court. Watch out for any cash held in joint checking and brokerage accounts, and the cash value of life insurance policies. If your spouse uses or moves assets without your knowledge, you may have to hire legal and forensic accounting experts to help you locate and value the assets.

Not Considering Mediation

If you and your spouse can work together to reach a fair settlement on most or all of the issues in your divorce (eg., child custody, child support, alimony, and property division), choosing mediation to resolve your divorce case may save thousands of dollars in legal fees and emotional aggravation. The mediation process involves a neutral third-party mediator (an experienced family law attorney trained in mediation) that meets with the divorcing couple and helps them reach an agreement on the issues in their divorce. Mediation is completely voluntary; the mediator will not act as a judge, or insist on any particular outcome or agreement.

Mediation also provides divorcing couples a lot of flexibility, in terms of making their own decisions about what works best for their family, compared with the traditional adversarial legal process, which involves a court trial where a judge makes all the decisions.

Mediation, however, is not appropriate for all couples. For example, if one spouse is hiding assets or income, and refuses to come clean, you may have to head to court where a judge can order your spouse to comply. Or, if one spouse is unwilling to compromise, mediation probably won’t work.

Hiring a Combative Lawyer to Punish Your Spouse

This is a very bad idea for two reasons. First, except in extremely egregious cases, most courts won’t punish your spouse financially for being a bad person.

Second, hiring an attorney to punish your spouse will cost you because your attorney will need to increase the number of hours spent on your case. Increased attorney hours means higher divorce costs, and higher divorce costs means there will be fewer assets and cash left for you and your family. Try to take the emotion out of your divorce, and treat your case as a business arrangement. The best revenge is to live well after the divorce is over.

Failing to Recognize Your Common Enemy – the I.R.S.

Work together with a divorce financial planner or tax accountant to minimize the total taxes you and your spouse will pay during separation and after divorce; you can share the money you save. Don’t forget that both spouses are liable for taxes due as a result of audits on joint returns, so it’s usually in your best interest to work together and minimize possible liabilities. If you’re facing complicated tax issues in your divorce, it’s best to consult with an experienced family law attorney and an accountant.

Not Producing an Accurate Budget

Divorcing spouses usually underestimate living expenses when they produce their initial budget for temporary alimony (also referred to as “maintenance”), and later find that they aren’t able to cover all of their bills. Use a financial professional to help you produce an accurate and complete budget.

Disregarding the Impact of Taxes in a Divorce Settlement

It’s important to remember that after the divorce is final, you may get taxed on the marital assets you received through your settlement. Say your spouse handles all the investments and offers to split them 50/50. Sounds good, right? The only way to know if you’re getting a fair deal is to determine the value of the investments on an after-tax basis, then decide if you like the deal. Again, you should speak with a tax professional about the impact of any proposed property division before you agree to it.

Failure to Evaluate Settlement Proposals

If you’re trying to decide whether your spouse’s proposed divorce settlement is fair and workable, you should try to figure out how the settlement will impact your finances in the years ahead. There are many factors to consider, including assets, incomes, living expenses, inflation, alimony, child support, taxes, retirement plans, investments, medical expenses and health insurance costs, and child-related expenses such as education.

There are specialized divorce computer models that produce comprehensive and realistic analyses of your post-divorce lifestyle. You should speak with a local divorce attorney or financial planner that specializes in divorce for help analyzing any proposed financial settlement.

Being Emotionally Attached to Assets in Divorce Negotiations

The marital residence, the pension you earned, a painting purchased during your marriage – these assets often bring an emotionally charged debate to divorce negotiations, which can impair good decision-making. Often, divorcing spouses that are attached to the family home don’t realize that they can’t really afford. Yet, they fight tooth and nail to keep it, sometimes at the expense of retirement planning.

However, the real estate market crash has made it abundantly clear that homes have a very low return on investment and, in some cases, have a negative return; many houses today are still underwater, and couples have had to walk away from their homes and the hard-earned money they invested.

In addition, a home is a major cash expense (eg., mortgage payments, property taxes, repairs, and utilities). Let go of any emotional attachments you may have. During your divorce and settlement negotiations, your main focus should always be on how to maximize your finances by making sure you’ll have enough cash for living expenses after your divorce and in retirement.

Over-using Your Divorce Lawyer

Divorce attorneys generally charge $200- $300 per hour, and partners in well-known New York City, Los Angeles, and San Francisco family law firms typically charge $450 per hour. These attorneys can provide advice on divorce-related issues, but they are not therapists or certified financial planners. If you need to talk through the emotional aspects of your divorce, or need career counseling or financial analysis, save money on additional attorney’s fees and be sure to talk to the right professionals, such as a licensed therapist, vocational expert, or a financial planner.

Beware of Settlement Offers That Look Too Good

Both spouses and children must make compromises in their life styles post-divorce. A settlement that does not give one spouse enough money to live on is likely to go into default in the future. Be fair, but verify the numbers. Get payments up front whenever possible, even if you get less in total. Try to secure all payments with assets and insurance. It may be worth speaking to a family law attorney who can review a settlement offer and make sure your rights are fully protected.

Disregarding the Long Term Impact of Inflation

The effects of inflation on the cost of a child’s college education, or on retirement, 15 years in the future can be dramatic. The “Rule of 72” is a simple way to judge the impact of inflation. For example, if the inflation rate is 3%, the “Rule of 72” means that prices will double in 24 years (72/3=24). College costs at 5% inflation will double in 14.4 years (72/5=14.4). Be sure to work inflation into your settlement negotiations so you can cover the true costs of future financial expenses.

Failing to Consider Your Spouse’s Eligibility for Social Security Benefits

If a couple is married for 10 years or longer, a non-working or lower-earning spouse is entitled to derivative social security benefits on the higher earning spouse’s (“worker spouse”) record. These derivative benefits do not impact or lower the worker spouse’s social security payments, which is why it’s so ironic that the average length of marriage for people who get divorced is about nine and a half years. Waiting just another six months may guarantee increased retirement options with no reduction in payments.

Forgetting to Update Estate Documents

After divorce, many people forget to change the beneficiaries on their life insurance policies, IRAs, and will(s), so the estates they wanted to leave to their children, new partner, or favorite charity may go instead to their ex-spouse. If you’re going through a divorce, talk to a family law attorney to find out what changes you can make to your estate plan during and/or post-divorce.

Failure to Adequately Insure the Divorce Settlement

Your ex-spouse’s premature death or disability can be devastating and may result in a loss of alimony, child support, college tuition, or property settlement payments. Life and disability insurance policies can guarantee that these payments will continue despite an unexpected loss or injury.

Failure to Develop a Post-Divorce Financial Plan

One indisputable fact of divorce is that two households cost more to operate than one. Many divorcing spouses fail to realize that their divorce settlement must last a significant amount of time: perhaps even the rest of their lives. Financial planning can help people transition from a married to single lifestyle by prioritizing financial goals, developing realistic expectations, and producing sound plans for the assignment and division of financial resources.

Free Consultation with a Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
Ascent Law LLC
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via Michael Anderson http://www.ascentlawfirm.com/top-10-mistakes-to-avoid-in-your-divorce-case/