The process of dividing marital wealth can be complicated for some Florida couples. Negotiations can go on for a lengthy period of time, and both parties are often overwhelmed by the number of decisions that must be made. One thing that spouses often overlook during property division is excess fees that can creep into the process. Being alert for those added expenses can make a difference in the ultimate bottom line.
One example lies in the fees associated with preparing a qualified domestic relations order, or QDRO. This is the document that outlines how the assets held in a 401(k) account are to be handled during a divorce. While some plans do not charge a fee for this service, others will tack on between $300 and $1,200 to prepare a QDRO.
Some financial experts argue that the cost of this service is reasonable. Others claim that there is no need to charge so much for preparing a QDRO, and assert that 401(k) plan administrators view these fees as little more than a chance to boost profits. To make matters worse, additional legal fees can be accumulated if there are errors in the QDRO and it requires alteration.
Florida spouses who are preparing to divorce should check with their 401(k) plan administrator to determine if a fee will be charged for preparing a QDRO. If so, the fee can be worked into the overall property division negotiation process. Another approach is to leave the plan intact, and to give other asset types to make up for one spouse’s share of the 401(k) account. No matter how the issue is handled, having the full scope of all costs up front is the best way to move forward.
Source: Bloomberg, “The Divorce Penalty: This 401(k) Fee Can Add Insult to Injury“, Suzanne Woolley, Jan. 23, 2017
If you have ever had a friend get divorced, only to have another do the same, you might wonder if divorce is contagious. You would be right. Pew Research analyzed decades of research and discovered that the study participants were almost 75 percent more likely to divorce if a friend got divorced. In small companies, the divorce contagion was about 55 percent.
The divorce “virus” is not like a flu virus that is transmitted physically. This contagion is more likely a psychosocial transmission. For example, when someone close to you gets divorced, it is kind of a passive permission for you to consider your marriage. If you are unhappy, you feel like you can make the same decision. Another explanation is that when someone close to you divorces, you might compare your marriage to theirs. If your sister, who you thought had the perfect marriage, did not make it, then you may feel as if you will not either. Do not forget the “grass is greener on the other side” argument.
Can you divorce-proof your marriage?
Marriage is supposed to be for a lifetime, but you are not the only person in that relationship. You can only control your own actions, which means the fate of your marriage is partially out of your hands. However, there are some things you can do to create a strong marriage:
- Accept that your spouse will grow and evolve over time
- Accept that you cannot change your partner
- Be intentional about your marriage
- Make time for what is important in your relationship, not just the children, but your own connection
- Give your spouse permission to not be perfect without worrying about you leaving. Everyone has bad days and bad characteristics. View your spouse through a soft-focus lens and focus on what is best about the person, instead of the worst
What if your marriage is doomed?
If you do think that your marriage is not going to survive, know your legal rights and responsibilities. You do not have to be adversarial in ending your marriage, but you may need to find alternatives and be creative about it. A cooperative divorce can actually help you find healing from a bad marriage and work together to find the best solutions for everyone involved, especially the children. Do not think you have to separate based on an outdated idea of divorce. Maybe you cannot live with your spouse, but you do not have to become adversaries in a courtroom to find a new life. Talk to a lawyer about your situation.
In most states, couples are not required to prove fault when seeking a divorce. They are able to make use of no-fault divorce laws that allow a marriage to end without one party making the argument that the other has done something to irreparably break the marriage. Many Florida residents strongly believe that no-fault divorce is a good thing for couples and for families. There are plenty of cases in which the marriage simply did not work out and there is no one to blame for the demise of the relationship. Some also feel that a no-fault divorce can make it easier to move through the property division process.
Dividing marital wealth can be a challenge, even when parties agree that ending the marriage is the right thing to do. When couples are placed in an adversarial position, the entire process can become far more complicated. Discussions on how to divide assets and personal property are harder to have when one spouse is actively building a case against the other. Not only will the party who is at fault be placed in a defensive position, but the other party could come to embrace the concept that he or she does not share part of the blame for the end of the marriage.
It should also be said that divorces that are centered on the concept of fault can also take longer to resolve than those where couples can agree that no one is to blame. That leaves more time for one or both parties to move on and enter into new relationships. If property division was complicated previously, adding more opinions into the mix can only serve to make things worse.
Many Florida residents will watch to see how the issue is handled and whether other states consider similar changes to divorce law. There is no clear evidence that removing no-fault divorce as an option serves to strengthen marriages. It does seem clear, however, that placing parties in an adversarial position can complicate property division and other matters that need to be addressed during the end of a marriage.
Source: mysanantonio.com, “Much fault in junking no-fault divorce“, Maria Anglin, Jan. 7, 2017
For Florida business owners, protecting business assets from loss during property division is a top priority when a marriage comes to an end. This is an area where preparation can have a huge impact, and where spouses who were savvy enough to create a prenup will have a far easier time than those who chose to forego a marital contract. The manner in which a business is structured can make a difference in how it is handled during a high asset divorce, and certain structures are more advantageous than others.
For individuals who are just setting up their business, it makes sense to consult with a financial advisor on how to structure the enterprise. For example, a business could be set up as a partnership, a corporation or as a limited liability corporation. A buy-sell agreement can be put into place from the onset, which can come in handy down the road if property division becomes an issue.
It is also important to avoid commingling business and marital funds. That means taking care to never pay for business expenses from a non-business account. It also means never using business assets to cover personal expenses. By keeping business and marital funds separate, a stronger argument can be made for protecting business wealth during a divorce.
For those in Florida who did not take precautionary measures prior to marriage, there is still a chance to obtain protection. It is possible to negotiate a postnuptial agreement that outlines how business assets would be handled in the event of a divorce. Of course, waiting to broach this subject until after there are marital problems is not likely to yield positive results. Business owners who believe that there may be a high asset divorce in their future would be well served to meet with a financial advisor and a family law attorney to ensure that all assets are properly protected, so that a fair settlement can be reached if that need should arise.
Source: bizjournals.com, “How to protect your business during a divorce“, Marcellus Davis, Dec. 28, 2016
Quite a few Florida residents are more than happy to pack away their holiday decorations and focus on the New Year. For some, divorce may play a big role in 2017. According to family law attorneys, the first few weeks of the New Year are a very busy time, with plenty of phone calls and emails rolling in. For those who are considering a divorce as part of their New Year’s resolutions, taking a proactive approach to matters such as child custody and property division can pay handsomely.
There are a number of reasons why people wait to file for divorce until after the holidays. Some simply want to get through the holiday season without additional drama. Others don’t want to taint their children’s holiday memories with the news of divorce. But some people have more practical reasons for postponing a divorce filing.
For one, many people receive a sizable holiday bonus at the end of the year. Waiting to file means that the value of the bonus will be part of the property division process. Generally, anything earned by either party after the official date of separation is excluded from division.
When planning for divorce, one of the best things that a Florida spouse can do to look after his or her own interests is to take a proactive approach, especially when it comes to property division. By gathering the required documentation and planning for negotiations, the entire process can be made simpler. For many people, this year will be the beginning of a new life as a single person.
Source: gazettextra.com, “”, Danielle Braff, Dec. 24, 2016