FREQUENTLY ASKED QUESTIONS ABOUT FINANCIAL ISSUES IN DIVORCE
Q: How much child support will I receive/pay?
A: In New York State, as in most states, child support is determined by formula.
The formula depends on the number of children living with you under age 21, your
income as well as your spouse's income, the amount of Social Security and Medicare
tax you paid and local city tax paid if you live in New York City or Yonkers. The
formula is fixed for the first $80,000 of your and your spouse's income, and then
is subject to judicial discretion for addition amounts. Child support is equal to
the following percentages of gross income as adjusted above: 17% for one child,
25% for two children, 29% for three children, and up to 35% for five or more children.
I generally project several child support scenarios as part of the divorce financial
Q: Will I be entitled to alimony (required to pay alimony)? Note:
New York calls it maintenance but other states and the IRS call it alimony; some
states call it spousal support.
A: While child support is determined by statute, the Court determines the
amount of alimony you will receive. The New York State Domestic Relations Law includes
such guidelines as the length of your marriage, your marital lifestyle, your income
and the ability of your spouse to pay, your age and heath, the likelihood that you
will obtain gainful employment, as well as a catchall
any factors that the
Court feels are relevant. There are two types of maintenance: rehabilitative (short
term) or permanent (until retirement or life). It is unusual for anyone with a short-term
marriage (under 10 years) to be awarded permanent maintenance. Keep in mind that
no two cases are the same. I recommend that you speak with an experienced matrimonial
attorney who practices in your locality to understand what a typical maintenance
award would be for your situation.
Q: Will I have to give up my pension?
A: Pensions and retirement plans are marital assets if they were earned during
your marriage and must be shared with your spouse. Pension accumulated from earnings
prior to your marriage are generally separate property. If you want your pension
and your spouse wants another asset, it is possible to keep your pension by using
the other assets to offset the value of your pension. My job as a financial planner
is to look at any proposal you are offered and make sure you are getting a fair
Q: Can I keep the house at least until the kids grow up?
A: This is a great question that requires careful study. A house has a high
cost to maintain, mortgage payments may be significant, and a lower earning spouse
may lose favorable tax deductions. Finally, you may be giving up other assets with
greater growth potential. As a divorce financial planner, I work with you to determine
your priorities, income and expenses, taxes and lifestyle options so you will have
all the information you need to make an intelligent decision.
Q: I have a bank account in my name. Is it considered separate
property (I don't have to share it with my spouse when I get divorced)?
A: Assets acquired during the marriage, no matter whose name they're in,
are typically considered marital property. In New York State, the increase in value
of separate property could also be considered marital if it was actively managed
during your marriage. There are certain exceptions to this rule. Property acquired
through gift or inheritance, property that you brought into the marriage, awards
from personal injury cases, and property excluded thought a prenuptial agreement.
Finally, separate property, which you put in joint name with your spouse, is considered
a presumptive gift and becomes marital property. Each state has its own set of rules
governing separate and marital property. It is important that you discuss any issues
of separate and marital property with a matrimonial attorney who practices in your
Q: Am I entitled to part of my spouse's Social Security check?
A: Yes, if you were married for 10 years or more, than you are entitled to
one-half of your spouse's Social Security income as long as you are not currently
remarried. Your spouse's check is not affected; he/she still gets their full check.
You have a choice between your check and or your spouse's
whichever is higher.
This benefit is available by going into your local Social Security office and presenting
the appropriate documents to certify the length of your marriage. For people requesting
early social security benefits, we use the lower benefit account for the early years
and switch to the larger benefit account at normal retirement age.
Q: When will I get my day in Court?
A: Probably never. Less that 2% of all divorce cases actually go to trial
in the United States. Most cases are settled in conferences between your lawyer
and your spouse's lawyers or in pre-trial conferences with the Judge. A judge will
only hear your case if you can't reach an agreement. As a Divorce Financial Planner,
I want to work with you early on in your case. By the time we get to the conference
stage, I will have a clear idea what we need to support your post-divorce lifestyle,
how much your spouse can afford to pay or needs for support, and where the money
can come from. My experience is that when my client has their numbers in order,
we can make a convincing case to get the money we need.
Q: What is a QDRO and why do I need one?
A: A QDRO (or Qualified Domestic Relations Order) is the legal document sent
to the plan administrator of your spouse's pension plan that orders them to divide
a pension account as part of a divorce. Your divorce contract (Judgment of Divorce)
signed by the judge may authorize the division of pension assets but does not put
that request into effect. Without a QDRO you will have to get your share of the
pension from your ex-spouse every month when they get their check. If he or she
remarries in the interim or dies before the date the pension is due to start, you
may get nothing at all. There are many nuances that go into a QDRO that make it
a document that can work to your benefit (versus a neutral document). In order to
protect your assets, I recommend that you consult with a qualified specialist in
Q: What if I want to use Mediation or Collaborative Divorce.
Can you still help?
A: Yes, I work with Divorce Mediators and Collaborative Law Practitioners.
Alternate dispute resolution is appropriate when both spouses want a fair and equitable
solution, there is full and honest disclosure of financial assets, and there is
no spousal abuse. Often I work with the less financially savvy spouse to help her/him
understand the financial issues so they can be on equal footing during the negotiations.
That often includes prioritizing financial goals and developing a workable post-marital
budget. At times, I work with both spouses during mediation sessions to take the
emotion out of the financial issues. That process includes a reality check, since
there is only so much money to go around, and minimizing taxes through efficient
allocation of tax deductions to create additional cash flow.