Category Archives for "High Asset Divorce"

Tips for remaining financially secure after a divorce

 

North Carolina couples who are getting a divorce must be careful about ensuring their financial security. This can be a particular problem if one spouse is more knowledgeable about finances than the other or has a significantly higher income than the other. For example, while an individual might initially think that a 50/50 split of the retirement account is appropriate, this might not be the case if one person is able to quickly replenish those savings while the other might struggle to find employment.

Another thing to consider is taxes. If there are two different types of retirement investments, they may have different tax implications, so individuals should make sure that they are not going to pay a large penalty that will reduce their actual share. Another thing to find it is whether a Qualified Domestic Relations Order is necessary in order to divide a retirement account.

Finally, individuals should take steps to protect themselves in case of unforeseen circumstances. This could involve people taking out a life insurance policy on their spouse to ensure that they still receive retirement benefits or support that they are owed. They might also want to take steps to protect their children and their financial affairs in the event of their own death.

In marriages where there are a number of assets, the process of property division might be even more complex. There could be considerations such as offshore accounts and business assets. If one person owns a business, the other person might want a share of it. In many cases, these issues can be resolved by negotiations conducted with the assistance of the parties’ respective family law attorneys.

Dealing with late-in-life divorces in North Carolina

 

Many older individuals are getting divorced. Studies show that between 1990 and 2014, the rate of newly divorced people age 50 or older has doubled. Gray divorces, as they are called, can be significantly different from divorces of people who are younger. Along with the fact that older individuals tend to worry less about issues related to child custody and support, senior divorcees are often more concerned about how to handle retirement.

Retirement and issues related to it are often a focus because people have less time to replace savings funds. Many individuals who are married assume that they will have two retirement accounts to rely on when they stop working. However, after a divorce, older individuals may need to push back their retirement date or figure out a way to live on less.

Individuals who end their marriage when they are older may also need to consider working several years longer. Additionally, a divorcee may want to consider selling their home to keep living expenses down. These solutions may not be attractive, but a reduced income may necessitate it.

People who are going through a divorce should focus on doing what they can to ensure that their life will be as easy as possible following the end of their marriage. It may be tempting to fight for marital property that has sentimental value, such as a home, but this may not always be the best financial choice. A lawyer could help someone determine which assets they should peruse and help them make a case for these assets during negotiations.

Property division and the Pitt-Jolie divorce

 

North Carolina residents who are following the divorce of Angelina Jolie and Brad Pitt have likely heard that Jolie is asking for full physical custody of their children. Pitt may end up paying child support if she does get sole custody, but if he fights for joint custody and the children live with each of them half the time, then neither will owe child support to the other. The two have been together since 2004 and married since 2014, and they have six children.

In California, where Jolie has filed for divorce, marital property is supposed to be split equally. However, many people believe that the two have a prenuptial agreement. Since 2004, they have earned $555 million between the two of them. Since they married, Pitt has earned about $76.5 million and Jolie has earned around $41 million.

The two also purchased homes in New Orleans and France before they got married. These will not be considered marital property and may need to be dealt with separately.

Although North Carolina is not a community property state, property division is still a major element of divorce, and there are several ways that a couple can go about it. For example, a couple does not automatically have to turn to litigation and have a judge decide how the property is divided. They can work with their lawyers to negotiate an agreement that they are both happy with. This may involve splitting all of the shared property 50/50, one of them buying out the other, or one taking certain assets, such as real estate, while the other takes certain accounts or other investments. The couple may be happier with this more flexible approach.

Dividing retirement savings in a divorce

The National Center for Family & Marriage Research reports that twice as many adults over the age of 50 got divorced in 2014 compared to 1990, and the divorce rate for adults over 65 tripled. A survey also found that pensions and retirement accounts are among the most contested for this generation of divorcing spouses. Baby boomers in North Carolina who are ending their marriages will certainly want to protect those assets.

Retirement benefits accumulated during a marriage will in most cases be split during property division unless the couple otherwise agrees. The funds that go to into a retirement account are intended to run a single household. When a couple divorces, the funds are divided by the court because they have to run two households. Due to this, it is important for couples to review or modify the beneficiary designations when their marriages end to confirm that their wishes are reflected.

Divorcing spouses should also check the current and future values of their retirement accounts. The government taxes individuals when they withdraw from retirement accounts such as traditional IRAs, pensions and 401(k)s. However, contributions to Roth IRAs and Roth 401(k)s come out of income that has already been taxed, making withdrawals tax-free. This makes it more financially sensible to divide traditional retirement accounts according to their after-tax values.

Additionally, divorcing spouses should avoid trading retirement benefits for the family home or other assets. A home, for instance, is usually expensive to maintain. Retirement benefits, however, increase in value, so keeping them and giving up the family home is typically a better financial decision for divorcing spouses in their 50s and 60s.

The laws regarding property division in a divorce might be too complex for some older couples to understand. Their respective family law attorneys may answer all of their questions and walk them through the entire process.

Figuring out the settlement agreement

A North Carolina divorce is seldom straightforward whether both parties want a simple resolution or not, as there are often several options for how to proceed. The problem is that each person might favor different ideas.

In a hypothetical situation, a woman wants a divorce after a number of years of marriage. She has a larger salary and wants to use the couple’s savings to buy a new place while helping her husband stay in their home by paying the mortgage. The husband wants to use the savings to pay off the mortgage and is worried about having enough money if he loses his job before full retirement.

As the savings account is marital property, neither party may be able to claim the entirety of it. However, the husband might get a larger part of the savings or more assets as he makes less money. The wife could receive some money for a new place while the husband pays for the mortgage on his own, or the couple could pay off the mortgage and agree to the amount the wife receives when selling the house whether the value increases or decreases.

After a divorce, each person must cover living expenses on one income. This often makes money tighter, but individuals do need to consider building a savings account up after a divorce. If an emergency or something unexpected happens, it is recommended to have six months worth of living expenses saved up.

It is possible to have a less contentious divorce when each person is willing to communicate honestly and work together to end a marriage, and negotiations handled by their respective attorneys might allow both parties to reach a mutually agreeable agreement. If one spouse makes less than the other, this party could be entitled to alimony for a short or extended period of time after a divorce.

Claiming ex-spousal benefits on Social Security

 

North Carolina residents who are at or near the age of retirement may be aware of the way in which their marital status affects their possible Social Security payments. There are circumstances under which the benefits derived from the other spouse’s Social Security earnings history are greater than they would be for the spouse directly. For example, if the other spouse earned much more during the term of the marriage, then the spousal benefits could exceed what they would have earned alone. This may also be true after a divorce.

A marriage that lasted longer than 10 years might render the ex-spouse eligible to receive spousal benefits after the divorce. The claimant must be able to prove that the marriage lasted this amount of time by producing both a marriage decree and a divorce certificate. No claim may be made for spousal benefits until people have been divorced for at least two years.

Under most circumstances, a remarriage will invalidate the ex-spouse’s attempts to gain these benefits. However, if the ex-spouse has passed on and the survivor has remarried after the age of 60, then a claim can be valid.

A divorce can often bring severe financial consequences for one or both parties. This can be especially true when the couple is older and one of the spouses passed up career opportunities to stay at home and take care of household responsibilities. As such, a family law attorney can often be of assistance in negotiating an agreement that provides the client with a measure of financial stability and peace of mind.

$10 million settlement possible for Amber Heard in Depp divorce

North Carolina residents might be interested in learning that Amber Heard, the actress who is separating from Johnny Depp, could stand to gain as much as $10 million from her divorce settlement. If the couple does not have a prenuptial agreement, she will be entitled to receive a big chunk of the money he made during their marriage, including a portion of the profits he earned from “Pirates of the Caribbean: Dead Men Tell No Tales.”

Heard has filed a temporary restraining order against Depp citing domestic violence. If she decides to pursue a civil case over the charges, she may be awarded more money.

Heard is asking for $50,000 a month in spousal support. Experts state it is unlikely she will be successful in getting spousal support for very long because the marriage only lasted 15 months. If she does get spousal support, she will likely only receive it for six months to a year.

When a high-profile couple gets divorced, they often have to deal with the media reporting on everything that happens in their case. In order to avoid negative publicity, couples such as Depp and Heard often try to negotiate agreements instead of waging a very public war in court. Before getting married, people with high assets may want to talk with a family law attorney about the wisdom of drafting prenuptial agreements. Doing so may protect their financial interests as well as their privacy if the marriage later goes south. An attorney might be able to help draft agreements that can protect their clients and keep cases from very public litigation.

Source: The Wrap, “Amber Heard could get $10 million in Johnny Depp divorce, expert says,” Tim Kenneally, June 1, 2016

The role of trusts in complex asset division

Couples who manage to accumulate wealth and experience a certain lifestyle during their marriage could be in for a surprise in the event of a divorce. A high asset divorce in North Carolina can have a dramatic effect on the lives and finances of the parties. Retirement plans might have to be changed in light of the asset division, associated with a marital dispute.

An offshore account might be one method someone might consider as a way to hide money from a spouse in anticipation of a dispute over an asset division. Such conduct might conflict with financial disclosure rules designed to prevent one spouse from hiding assets to circumvent an asset division. Trusts, however, might offer a method for parents to allocate assets to their children while shielding the assets in the event of their own divorce or the divorce of one or more of their children.

Setting up an irrevocable trust in which the beneficiary does not control the distribution of the assets or income of the trust is one method of protecting the assets from the beneficiary’s spouse in a divorce. Some courts limited the effect of income distributions from a trust on spousal support requests by ruling that only those payments actually made in the past to the spouse could be taken into consideration. The theory applied by the court was that future payments, if any, were not within the control of the spouse seeking spousal support.

Whether real estate and other assets in a trust become marital property in a divorce dispute depends upon many factors. Individuals contemplating the creation of a trust for their children, or individuals involved in a divorce in which an irrevocable trust might be an issue, might benefit from consulting with an attorney familiar with complex asset division.

Financial planning important in divorce

North Carolina residents who are facing the end of their marriages should consider speaking to a financial adviser. This is a step many people put off until after the divorce, but at that point, they may have already made bad decisions that affect their future. When people have been less involved with the family finances, it may be their first opportunity to learn about the kind of planning they will need after the divorce.

For people who have been the stay-at-home parent, getting the house in the divorce while the other spouse takes liquid assets such as pensions might seem like a good deal. However, that person might not factor in the cost of upkeep and insurance on the house. The liquid assets might continue to appreciate while the other person struggles to pay for the costs associated with the home.

In one divorce, a woman’s husband took out a home equity loan on the house and did not tell her. As a result, the house she got was far more burdened by debt than she realized. A spouse might even attempt to conceal assets. A financial planner might be able to detect a deception like an offshore bank account.

A person who is considering divorce may also want to meet with an attorney. After talking with a financial planner, it might be possible to map out a strategy with the attorney. Things to consider might include whether one spouse will owe support to the other and whether joint custody will be sought if there are children involved. Another discussion may be whether to pursue mediation or negotiation or whether litigation will be necessary.

Bankruptcy and Divorce in North Carolina

If both spouses have debt and agree to file for bankruptcy, this is generally best done before a divorce. However, if both people cannot agree to file for bankruptcy, filing after a divorce is completed may be the best way to go. Individuals who file for bankruptcy alone and then file for divorce may still find themselves having to pay off the spouse’s obligations because the asset division process assigned them some of their spouse’s debt.

Another instance where someone may want to file for bankruptcy after a divorce is when they owe money and their spouse has a large income. If people exceed a certain household income, they may not be eligible for a Chapter 7 bankruptcy filing, which would normally allow them to discharge their debts without an obligation to pay them back.

When individuals go through a divorce, they may be able to settle certain important issues through negotiation or mediation. However, if a couple is not able to agree on matters like asset division, custody or spousal support, they may end up having to litigate their divorce. A lawyer could explain how the law determines issues related to a divorce and represent someone in court.