Straight Answers To Divorce and Finances
Copyright © 2009 StraightDivorce.com
We at Straight Divorce believe in giving straight answers about various topics related to divorce. One of the hardest situations to deal with comes into play when divorce and finances join forces. For those who are eager for straight answers about important issues related to finance and for those who are deeply concerned about handling finances correctly, this article will address some of the concerns that all divorcing people face. We at StraightDivorce.com hope that you enjoy the second part in our three part “Straight Answers to Divorce” series.
Preparing for the Financial Separation
Very often when a couple has been married, one person has taken on the responsibility for financial management. This could leave the other party in a vulnerable place and therefore requires some extra effort and understanding on the part of the person who has not managed the finances. The reason is so that one or the other is not left with less than they deserve. One spouse may have to put in some extra effort, but it’s well worth it in the long run. The reason? Divorce can have great financial consequences on the parties involved and debts don’t go away just because people divorce. Even in those instances, when couples seem to have a fairly friendly arrangement, problems with finances and debts still occur. Remember, finances can be tricky and no one wants to be left holding the bag therefore, it’s really important that a good divorce attorney is in your corner, guiding you when it comes to a division of debts and assets, child support and alimony issues. Keep in mind that even if a divorce is friendly, use objectivity. You can’t allow emotions to get in the way of good judgment. When it comes to money, people do very strange things and if you have joint accounts, one or the other can remove money from an account or charge up a huge bill on a credit card. Caution should prevail and a good divorce attorney should be consulted early on.
Straight Answers to Divorce and Finances
As a quick resource, the following are questions and answers often asked related to finances and divorce.
Can either party get alimony?
When a divorce is petitioned, either party from the marriage may ask for post-marital alimony. It is never an absolute right, but is often granted based on the circumstances of one or the other spouse. If the parties cannot agree to the alimony terms of the divorce, the court makes a determination, which can be modified based on changes or circumstances by either party. A spouse is a candidate for permanent alimony if a marriage has lasted over ten years.
What if the spouse who is supposed to pay alimony, fails to pay?
There are not usually any special legal options available to the party that is owed money therefore those trying to recover back alimony generally have to resort to collection procedures. A divorce attorney can give you the information you need about withheld alimony.
Is alimony treated as income?
Yes. Alimony is treated as income to the receiving spouse and is deducted from the income of the paying spouse. Courts may order a husband or wife to pay spousal support, but more often than not, it is the husband that pays alimony to the wife.
Why do people have to pay alimony?
In the US, spousal support is an attempt to help a spouse live according to the means they have become accustomed to. Once alimony has been granted, it becomes an ongoing financial obligation. In short, it is designed to provide the lower income spouse with money for living expenses over and above child support. Because the complexities of alimony are confusing, it is always best to speak with a good divorce attorney when it comes to alimony.
Do all states divide property and assets the same or differently?
Property and asset distribution as well as debt division in divorce is determined differently from state to state,. There are specifics laws in each state regarding what is deemed “marital property.“ For example, in Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and Puerto Rico, property of a married person is classified as either community property (owned equally by both spouses) or is the separate property of one spouse. Either party may be entitled to retain certain assets or either party may be required to pay certain debts that the court considers separate.
Are all assets and debts deemed community property?
All assets and debts are not deemed community property and therefore each spouse gets personal property, assets and debts whose worth adds up to his or her percentage. In all states, assets and earnings accumulated during marriage are divided fairly, but not necessarily equally. Often, two-thirds of the assets go to the higher wage earner and one-third to the other spouse.
Are there certain marital properties that are excluded from marital property division?
Certain property that was acquired during the marriage may be excluded from marital property. Some states do not consider it marital property if the property was a gift or inheritance given to a spouse during the marriage. Other times if the property was purchased with separate funds by one spouse prior to the marriage, it is not considered marital property. And if the property was excluded by a valid agreement such as a prenuptial agreement or if separate property was acquired before the marriage and has since increased in value, it is not considered marital property.
Does the court get involved when it comes to division of debts and assets?
The court will apply tremendous discretion when it comes to division of debts and assets and will take into account the financial needs of both parties as well as any unusual expenditures of a spouse. Because asset and debt division is so complex, issues concerning asset and debt division must be properly addressed right from the start. In fact if one spouse enters into agreement regarding debts and assets and the agreement does not protect their interests, or if a court is not presented with the information that protects the spouses’ interests, it could be impossible to return to these issues at a later date.