Moving On

July 4th, 2016

12 Essential Steps to Prepare for Your Post-Divorce Future

By Jane Lubowitz Rosenstadt, Esq.

As many can attest, going through a divorce can be overwhelming. There is so much to be done in the process of ending a marriage, so much emotional energy spent, that by the time you reach the finish line of finalizing your separation or divorce, you may feel that you have little energy left to prepare for the next stages of your life.

However, with this major hurdle behind you, it is now essential that you take the practical steps necessary to put your financial and legal matters in order for the future. Among other things, accounts must be updated to reflect your new marital status; steps must be taken to ensure that you are in compliance with your obligations under the agreement; and named beneficiaries of your assets may need to be changed.

With these concerns in mind, we have prepared a checklist to guide you as you launch your new life.

1. Health Insurance: If during your marriage, you were covered under your ex-spouse’s medical insurance, and you have not already done so, it is essential that you take immediate steps to obtain insurance. You want to make sure there is no gap in your coverage once your divorce becomes final and you are no longer covered under your ex-spouse’s plan. Research your options to determine the most cost-effective insurance plan to meet your needs in the future, whether through your own employment, a private plan (visit New York’s health plan marketplace at https://nystateofhealth.ny.gov/) or through COBRA, as a temporary solution. Because divorce constitutes a “loss of coverage” situation, you need not await the annual open enrollment period to join a new plan. Rather, you can purchase a new health insurance policy right away.

2. Accounts and Credit Cards: If you haven’t already done so, establish checking, savings, brokerage and credit card accounts in your own name. If your agreement provides that joint accounts should be closed, take the steps necessary to do so. Be sure to cancel all joint credit card accounts.

3. Real Estate/Homeowner’s Insurance/Utilities: If title to your home was changed into your individual name by a deed, you will need to verify that the STAR property tax exemption is still in effect. If it is not, you must file for it again. Similarly, update your homeowner’s insurance policy and your utility contracts (gas, electric, cable, telephone, internet, cellphone) to reflect your sole ownership. Conversely, make sure that your name is removed from any policies or contracts on property for which you are no longer responsible.

4. Payment of Taxes: If you are receiving maintenance payments, you will be required to pay income taxes on the payments that you receive (unless your agreement specifically provides otherwise). Consult an accountant, who can set up quarterly estimated tax payments so that you will not be overwhelmed by a large tax debt at year end, and then make sure that you set aside enough money to cover those quarterly estimated payments.

5. Life Insurance: To the extent that your agreement requires you to maintain insurance on your life for another’s benefit, make sure that you have the appropriate policy or policies in place and that the named beneficiaries and the death benefit amounts are in compliance with the agreement. Conversely, if your spouse is required to maintain a life insurance policy for your benefit or that of your children, obtain a copy of said policy and request periodic statements to verify that the premiums are paid in full on an ongoing basis and that the policy remains in effect.

6. Change of Beneficiaries: Unless you are obligated under your agreement to maintain your ex-spouse as the beneficiary of the proceeds of certain assets upon your death, consider whether you wish to remove your ex-spouse and name another individual(s) as the beneficiary to receive the proceeds of any of your accounts, plans or policies (i.e. brokerage accounts, IRAs, 401(k)s, pensions, other retirement accounts etc.). If so, file the paperwork necessary to make such changes.

7. Last Will and Testament: In all likelihood, your ex-spouse was named in your will as a beneficiary to receive a part or all of your assets upon your death. In the event that you no longer intend your ex-spouse to be the beneficiary of such assets, contact an estate-planning attorney as soon as possible to assist you in revising your will.

8. QDROs (Qualified Domestic Relations Orders): If your agreement provides that you or your spouse shall share your pension or other retirement asset(s) with the other, creating the need for a qualified domestic relations order, or “QDRO”, be sure to follow up with your attorney, mediator, the court clerk and/or retirement plan administrator to verify that the order has in fact been filed with and executed by the court, and has then been filed with and approved (or “qualified”) by the administrator of the retirement plan. In the case of a 401(k) or other defined-benefit contribution plan, verify that the funds were in fact transferred into a new account in the name of the receiving party. In many cases, there will be forms that you or your spouse must complete and sign in order to receive the funds from the other party’s retirement account. Furthermore, it is your responsibility to inform the plan administrator in writing of any change to your address.

9. Automobiles: If your agreement provides that ownership of an automobile be transferred to or from your name, don’t delay in making the trip to the Department of Motor Vehicles to complete the paperwork necessary to bring about the transfer of title. In addition, cancel joint auto insurance policies and obtain your own policy.

10. Name Change: Divorce judgments in New York State contain language authorizing parties to resume use of a prior surname. If you wish to change your name following your divorce, you will need to present a certified copy of your judgment of divorce authorizing such change to the appropriate government agencies (e.g. Social Security Office; Department of Motor Vehicles; U.S. Dept. of State) and complete each agency’s required paperwork in order to assume use of the new name.

11. Information and Documents Pertaining to Your Children: Following your legal separation or divorce, be sure to update your children’s schools, doctors and medical insurers with any new contact information for either you or your ex-spouse so that you will continue to receive important information, notices and invoices. Obtain for your possession originals and/or copies of all important documents relating to your children, such as their birth certificates, Social Security cards and health insurance cards. Make certain that your children’s passports are maintained in a secure place either by you or your spouse.

12. Record-keeping: Set up a system for keeping track of expenses. If there are certain costs relating to your children that you share with your spouse under the terms of your agreement, such as out-of-pocket medical expenses, babysitters or tutors, keep records and/or receipts of your payments in a designated folder to enable you to do the accounting with your ex-spouse whenever necessary. When it comes time for you to file your taxes, be in a position to know how much maintenance you paid or received so that you have the correct information available for inclusion on your tax returns. Know whether you or your spouse has the right to claim a child as a dependent in any particular year.

By addressing head-on the matters on this checklist, as well as any other particulars that may apply to your situation, you will gain the peace of mind of knowing that you have protected yourself and your family, and you have complied with your obligations under your agreement.

The mediators at Divorce Mediation Professionals are available to help you, should you have any questions.

New Law Affects Divorcing Couples

May 28th, 2016

State sets spousal support guidelines

By Maren Cardillo, Esq.

Judges Gavel, Soundboard And Bundle Of Money On The Table
Early this year, the New York State Legislature enacted a law that provides guidelines for determining spousal support (or “maintenance,” as it is called in New York) in cases of divorce. Under these maintenance guidelines, calculations are made by applying mathematical formulas to the incomes of the two parties in order to arrive at the amount of support, if any, that is to be paid by one party to the other in a particular case. Generally speaking, maintenance is awarded if one spouse has significantly more income than the other.

In mediated or negotiated agreements, parties are not required to adhere to the maintenance guidelines so long as they can agree on their own upon the amount and duration of the payments. If they cannot agree and they go to court, a judge would then apply the guidelines to determine the amount of maintenance to be paid in their case.

Maintenance Amount

Depending upon whether or not child support will also be paid in a particular case, one of two maintenance formulas is applied to the parties’ incomes to arrive at the dollar amount of the maintenance award.

Formula Where the Maintenance Payor Is Also the Non-Custodial Parent Paying Child Support to the Recipient Spouse

First, make the following computation:
1. Calculate 20% if the Payor’s Income up to the cap
2. Calculate 25% of the Payee’s Income
3. Calculate Line 1 less Line 2

Second, make the following computation:
4. Add the Payor’s income up to the cap and the Payee’s income
5. Multiply the amount calculated in Line 4 by 40%
6. Subtract the Payee’s income from the amount calculated in Line 5
7. The Guideline amount is the lesser of Line 3 or Line 6

Formula Where No Child Support Is Being Paid By the Maintenance Payor to the Recipient Spouse

First, make the following computation:
1. Calculate 30% if the Payor’s Income up to the cap
2. Calculate 20% of the Payee’s Income
3. Calculate Line 1 less Line 2

Second, make the following computation:
4. Add the Payor’s income up to the cap and the Payee’s income
5. Multiply the amount calculated in Line 4 by 40%
6. Subtract the Payee’s income from the amount calculated in Line 5
7. The Guideline amount is the lesser of Line 3 or Line 6

As formulated, the maintenance guidelines are to be applied only to the first $178,000 of the payor’s income. Note, however, that although a court will award the amount of maintenance in accordance with the applicable formula, it will deviate from that award if it finds the amount generated by the formula to be “unjust or inappropriate” after consideration of the 15 “deviation factors” enumerated in the guidelines. In such circumstance, the court might then take into account income in excess of $178,000 which the payor earns in calculating the amount of maintenance. The court might also take into account other information in the case that the court considers relevant under the deviation factors.

Deviation Factors

1. The age and health of the parties;
2. the present or future earning capacity of the parties, including a history of limited participation in the workforce;
3. the need of one party to incur education or training expenses;
4. the termination of a child support award before the termination of the maintenance award when the calculation of maintenance was based upon child support being awarded which resulted in a maintenance award lower than it would have been had child support not been awarded;
5. the wasteful dissipation of marital property, including transfers or encumbrances made in contemplation of a matrimonial action without fair consideration;
6. the existence and duration of a pre-marital joint household or a pre-divorce separate household;
7. acts by one party against the other that have inhibited or continue to inhibit a party’s earning capacity or ability to obtain meaningful employment. Such acts include but are not limited to acts of domestic violence as provided in section four hundred fifty-nine-a of the social services law;
8. the availability and cost of medical insurance for the parties;
9. the care of children or stepchildren, disabled adult children or stepchildren, elderly parents or in-laws provided during the marriage that inhibits a party’s earning capacity;
10. the tax consequences to each party;
11. the standard of living of the parties established during the marriage;
12. the reduced or lost earning capacity of the payee as a result of having forgone or delayed education, training, employment or career opportunities during the marriage;
13. the equitable distribution of marital property and the income or imputed income on the assets so distributed;
14. the contributions and services of the payee as a spouse, parent, wage earner and homemaker and to the career or career potential of the other party; and
15. any other factor which the court shall expressly find to be just and proper.

Maintenance Duration

Also contained in the new law are “advisory guidelines” pertaining to the duration of the maintenance award in a particular case; i.e. how long the payments shall continue. These guidelines are based upon the length of the marriage, which is defined as running from the marriage date to the date the divorce action was started.

Length of Marriage                 Award Duration
0 to 15 years                          15%-30% of the marriage’s length
More than 15 to 20 years        30%-40% of the marriage’s length
More than 20 Years                35%-50% of the marriage’s length

As this schedule is “advisory” only, it is within the court’s discretion either to consider or to disregard the lengths that are suggested. Moreover, under the new law, the court has the right to award what is termed “non-durational” maintenance; i.e. maintenance which continues indefinitely and which terminates only upon the remarriage of the recipient or the death of either of the parties.

Mediation and Role of the Maintenance Guidelines

While the new guidelines may give separating and divorcing couples a broad idea of what maintenance, if any, would be award by a judge should they go to court, couples who choose to mediate or negotiate their own agreements are not bound by these maintenance guidelines. This is fortunate, because each family and situation is unique, and often the maintenance guidelines do not provide appropriate or workable solutions for a particular family. In some cases, the support payments generated by the formulas fail to meet the financial needs of one spouse or the other. In some cases, the resulting amounts conflict with the values, goals and consideration that are important to the family.

As mediators, it is our responsibility to assist you in arriving at support figures that are workable for the two of you as individuals as well as for your family as a whole.

We have prepared a packet of information on the support guidelines and would be happy to share it with you. Simply call our office to receive your copy.

Seeing Isn’t Always Believing

March 12th, 2016

A shift in perspective can reveal the truth

By Barbara Badolato, LCSW

Family In ParkWhen we know someone very well, we often assume we also know the motives behind his or her actions.  This tendency to make assumptions about the cause of another’s behavior can be a roadblock to co-parenting.

Consider this story by an anonymous author.

A little girl was going for a walk in the park with her mother. Knowing she would get hungry after an afternoon on the swings, slides and in the sandbox, she placed two shiny red apples in a brown paper sack.

The pair went to the park, and the girl had a wonderful time. Before heading home, mother and daughter sat on a park bench to have their snacks.

The girl opened the sack and removed both apples. The mother said, “I’d like an apple, please.” The daughter looked up at her mother, smiled, and proceeded to take a bite of each one.

The mother was flabbergasted. Just as she was about to express her displeasure, the little girl offered one of the apples to her mother, saying, “Take this apple; it’s the sweeter one.”

This simple tale illustrates the notion that perception and perspective can color our ability to discern the truth about a situation. We often cannot know what another is thinking, no matter how well we might know someone.

Similarly, husbands and wives, operating from past hurts and experiences, might not know what the truth really is. For example, when the children are staying with Mother, their bedtime is 8 pm. When they stay with Father, however, their bedtime is 9. The mother may assume her ex-husband is purposely undermining her rules and her authority. In reality, the father may be telling his children that although they are permitted to go to bed later at his house, it is only because they don’t have to wake up for school the next morning. He also may warn them that they must not argue with Mother about their 8 pm bedtime, and if they do, their bedtime will become 8 pm at his house as well.

Human nature causes us to judge what one hears or sees according to how one feels in the moment. Since that judgment can be faulty, it’s always a good idea to ask for clarification whenever your former spouse does or says something that appears to contradict the co-parenting strategies you put in place.

In this way, you both can stay on the same page – remaining strong parents your children can rely on, even if you aren’t still married.

Running a Business After Divorce

February 17th, 2016
Store Owner Turning Open Sign In Shop Doorway
Splitting up is challenging for every couple, but when that couple owns a business together, the challenges increase exponentially.
Just because a life partnership ends, a business partnership doesn’t have to.
The Wall Street Journal published this article on how a business can survive, and even thrive, despite its owners’ divorce.

When New Year’s Resolutions Include Divorce

January 5th, 2016

7 Tips Before Saying ‘I Don’t’

New Start sign with sky backgroundBy Barbara Badolato, LCSW

Every January brings a big jump in divorce filings.  Whether the holidays highlight huge holes in a marriage or the end of a tax year signals a time to start a fresh financial future, couples on the fence in December seem to agree the New Year is a time for new beginnings.

Barbara Badolato, LCSW and director of mediation services at Divorce Mediation Professionals, offers these 7 tips for couples who choose to part ways in 2016.

1. Spend time getting smart about your financial situation. Learn where the records and statements are kept, and review them. Knowledge is power. This step makes it easier to prepare a realistic budget that will include expenses for two separate households.

2. Cultivate a support system. In addition to finding a therapist, many couples find it helpful to engage the services of a divorce counselor and a divorce financial planner.

3. Research the various methods of getting a divorce. Consider a process that takes your children’s emotional well-being into account. Divorces shouldn’t leave both parties destitute and exhausted. Many couples find mediation a saner, quicker alternative to a contested, adversarial divorce.

4. Discuss with your partner how and when you will tell your children. Ideally, you do it together.

5. Stay focused on looking forward. Using your divorce as an opportunity to right all the wrongs in your marriage, to get revenge for past hurts, will only delay your own healing and your ability to move on.

6. Manage your own expectations. Most times, it will not be possible to sustain the same lifestyle as you did when you were married. Maintaining two separate households is substantially more expensive than maintaining one.

7.  Be careful whom you listen to. Well-meaning friends and relatives will be quick to offer unsolicited advice, but they cannot know your specific situation and the information they offer may do more harm than good.