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.

Electronic entertainment an uncertain factor in family law

It is not unusual for divorced parents in North Carolina to have divergent ideas about the best way to raise their children. In this modern era of constant electronic stimulation, that can mean the two parents have different conceptions of how much internet time is appropriate and how many video games a child should be allowed play. There is an absence of compelling scientific evidence proving that this new media is either harmful or helpful, so one parent has very little ability to compel the other parent to comply with their ideas about appropriate electronic entertainment usage.

The recent craze for Pokemon Go can be an instructive example. Many children spend hours a day playing the new game, and there is as yet no clear consensus as to whether this is positive or negative for child development.

The main standards that the court should use to evaluate the behavior of the parent are the safety and the best interests of the child. Unless the child’s use of video games is so overwhelmingly negative that it represents a clear and present danger to their well-being, the law is unlikely to get involved in regulating their use.

Although there may be wide latitude for discussion and negotiation, after the parenting plan has been set down by the court, it will have the force of law. Both parents must comply with it and the court must be consulted before changing any part of it. An attorney can be helpful to those who wish to revisit or modify a parenting plan. They may be able to advocate for a preferred outcome for their client and to represent them in any negotiations with other parties or the court.

Source: The Huffington Post, “Pokémon Go…ne! Can Divorced Co-Parents Protect Kids from Excessive Screen Time?”, Bari Weinberger, Aug. 24, 2016

1 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.

The role of the primary caretaker in child custody decisions

 

If North Carolina parents who are going through a divorce cannot reach an agreement about child custody outside of court, a family court judge must rule on the matter. When a judge makes a ruling about primary physical custody, the judge typically favors the parent that is the child’s primary caretaker. To determine who has served as the primary caretaker, a judge will look at a number of different factors.

In family law, the primary caretaker is the parent who has taken care of a child’s most basic needs. Feeding, bathing, grooming and clothing of a child are all considered responsibilities of a primary caretaker. A primary caretaker may also make healthcare arrangements for the child, schedule extracurricular activities, attend conferences at the child’s school and teach the child reading and writing skills.

The primary caretaker is usually preferred in child custody decisions so that the child’s bond won’t be interrupted. Psychological research has found that this emotional bond is vital for a child’s successful development. The primary caretaker could be a mother or father, and in some cases, the mother and father share primary caretaking responsibilities equally.

When it is not absolutely clear which parent is a child’s primary caretaker, a divorcing parent may want to make sure that the court has all of the information that it will need to make a sound child custody decision. An attorney can often assist a client in putting together as much evidence as possible to support a request for joint physical custody. This could include testimony from healthcare providers and teachers, for example.

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.

Lessons from high-profile divorces

North Carolina fans of actor Johnny Depp may have followed news of his divorce from Amber Heard. Depp is also selling off some of the paintings from his art collection, but insiders say it is probably not related to the divorce. Depp and Heard married in California, a community property state, and the marriage only lasted 15 months. Depp has been collecting the paintings since the 1990s, so it is unlikely they would be considered marital property. However, there are circumstances in which a divorce would prompt just such a sale although it is important that a person who is doing so does not attempt to sell the assets for less than they are worth to reduce the marital estate’s value.

Some people may try to avoid litigation because they want to avoid a lengthy divorce battle or would like to avoid the publicity. Divorce involves having to share financial information, and a high-profile couple might prefer to keep that information private. For example, a former head of General Electric found himself investigated by the Securities and Exchange Commission after the details of his retirement package worth more than $2.5 million annually that came out during the proceedings appeared in the media.

On the other hand, some couples cannot afford to divorce. The cost of renting separate homes or paying health insurance may be too steep, making them decide after all to stay together.

A person’s financial situation can have a profound effect on how certain divorce legal issues such as property division are approached. A family law attorney can often take that into account when negotiating a comprehensive settlement agreement.

$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

Avoiding common child custody and visitation pitfalls

Divorcing parents often hope to avoid protracted and bitter legal disputes and get through the process amicably and quickly, but these hopes are sometimes dashed when it comes time to discuss child custody and visitation. These disputes can also place the children involved in a very difficult position, and even North Carolina parents that have worked out detailed parenting arrangements may find it difficult to avoid confrontations and conflict when putting their carefully crafted plans into practice.

The desire to keep their legal bills manageable may lead spouses to put their differences aside during divorce negotiations, but lingering resentments often resurface once the paperwork has been completed and life returns to normal. Divorced parents who do not see eye to eye sometimes try to punish one another by refusing to abide by the terms of visitation and custody arrangements, which can lead to a negative spiral of accusations and lawsuits.

They may be able to avoid this kind of pitfall by remembering that conflicts with their former spouses are likely to have a negative impact on their children. Parents who are able to do this may develop more productive and amicable relationships with their former spouses even when they parted in acrimonious circumstances, but those who are unable to look beyond the past may face legal actions or even criminal sanctions.

Experienced family law attorneys know how contentious custody disputes can be, and they may take a diplomatic and delicate approach when these matters are being negotiated. Attorneys could also remind their clients that entering into legally binding parenting agreements should be taken seriously and that the sanctions for violating them could be severe.

Preparing for divorce negotiations

North Carolina couples who are ending their marriages need to be ready for some changes. Divorces can have a significant impact on a person’s finances for years after the settlement is reached. Apart from the financial strain that a divorce can induce, negotiations over matters such as custody and visitation can be very stressful.

People should try to prepare themselves for negotiations and court appearances by gathering as much information and evidence as they can. All account numbers and passwords for financial accounts should be saved along with copies of vital documents. The contents of the marital home should also be assessed and photographed because these assets will likely need to be divided.

Divorcing people may be able to save time and money by listening to the advice of people who have already gone through a similar experience. While every divorce is different, they may have learned some valuable lessons from their mistakes that they can pass on. One lesson that many divorced people learn is that it is sometimes better to settle quickly than to argue over every last detail. Divorces are negotiations, and each side usually has to give up something in order to reach an agreement.

Before property division negotiations begin, a family law may help a client determine what assets are worth fighting for and which ones are not all that important. Some marital property is far more sentimental to one party than financially valuable to the other, and this can often be taken into account as a possible negotiating tactic. Once an accord is reached, the remaining legal issues can be addressed in a comprehensive agreement.

Ending ongoing spousal support

When a couple in North Carolina divorces, one of the parties may be ordered to pay the other alimony. There are usually situations that signal an end to alimony payments like when the recipient remarries, but payments can continue for a long time in some cases. The actor David Hasselhoff has paid alimony to his ex-wife Pamela Bach since their 2006 divorce, and he pays $21,000 per month.

The “Baywatch” actor and recent reality star is asking a judge for permission to stop paying alimony as he wants to retire soon and reportedly had to spend some of his retirement savings to keep making payments. His gross income is $112,000, and the 63-year-old man also uses a portion of that income to take care of the couple’s two daughters as he has physical custody. He has also been dating 34-year-old Hayley Roberts for five years.

Hasselhoff and Bach were married for 17 years, and 52-year-old Bach has appeared on “Celebrity Big Brother” after the couple’s split. However, Hasselhoff claims that his former spouse is talented and could work as an actress or a producer. He alleges that she could become self-supporting if she tried to find work.

Alimony typically goes to the party who made less money or contributed to the marriage in some other fashion, and it is intended to help them keep the same standard of living. Alimony and child support are different, so one could receive both or only one depending on the situation. If the alimony recipient has become employed and no longer needs additional funds, a family law attorney could be of assistance in petitioning the court for a modification or termination of the order.