Risa A. Kleiner, Esq.

June 30, 2009

If you can’t afford to move out during a divorce, and can’t find somewhere to crash while you and your spouse alternate staying in the marital residence with the kids, there are a few ways to minimize the costs during a divorce.

According to a survey, 68% of Divorce Financial Analysts questioned said they had clients who could not afford to get divorced.  The primary piece of advice they gave those clients:  be cooperative and realistic and, above all, BE FLEXIBLE. 

Clients who enter the divorce process asking for the moon (and the stars) have to expect to pay the price of litigation to fight for what they want.  But if they can mediate their divorce — or at least negotiate with reasonable expectations — they will keep costs down and probably create better solutions for their specific needs.   Negotiating a reasonalbe amount of alimony and child support now and agreeing to review those obligations when the economy improves, for example, may give everyone a little breathing room

Divorce Financial analysts also recommended sitting down with a lawyer for an extended consultation, perhaps 2 or 3 hours.  Clients can then using that advice to streamline their goals and approach issues realistically with their spouse.  

In short, to save money: 

• cooperate
• be flexible
• be reasonable
• be open to creative solutions
• be willing to compromise
• seek competent advice from a family law specialist
• mediate whenever possible.

June 25, 2009

Retirement Issues Separate Husbands and Wives.

It is not unusual to find that divorcing couples disagree on financial issues.  Often, one of the spouses has been the saver, the other the spender.  Not surprisingly, when the assets are divided in a divorce, the saver feels the distribution is unfair.  Why should he or she have to give his or her spouse half o fhis or her savings when the other spouse has not saved at all? 

In a survey done by Fidelity of 500 couples who were  at least 45 years old, LESS THAN HALF of the couples made financial decisions together.  Only 40% of them agreed on what age they should retire.  Only 60% agreed what their retirement lifestyle should be like.  Yet, when it came to advising newlyweds how to handle their money, MORE THAN HALF advised them to make their financial decisions together. 

Money – historically, it’s been one of the core issues that can cause a rift between a husband and wife — or between cohabitants, for that matter.  What to spend…..what to save….when and how much to borrow…if these issues are not discussed along the way, there are bound to be problems down the road.  In a NJ divorce, savings are considered “marital” even if only one party did the saving.  Debts are considered joint as well as long as they were incurred for reasonably necessary purposes. 

The moral: open the conversation about finances in retirement long before it’s time to retire.

June 18, 2009

If you think you are certain to receive the proceeds of a life insurance policy if you’re the named beneficiary, think again.  In the case of  Hadfield v. Lillo, the former wife of the insured, who was the primary beneficiary of his Police & Fireman’s group life insurance, will not be receiving the proceeds of his policy.

The court held that there is no vested interest in the proceeds of a life insurance policy since the beneficiary can be changed at any time.  Unless the policy, a Will, a court order or other “governing document” creates a contractual right to receive those proceeds, divorce or annulment cuts off a former spouse’s right to receive life insurance proceeds.  That was not the law at the time these parties divorced.  Nonetheless, the court ruled the current statute applies.

Therefore, be forewarned.  If you get divorced and expect to receive the benefits of your former spouse’s life insurance policy upon his or her death, be sure your Judgment of Divorce clearly states this right.

June 17, 2009

Today’s NJ Law Journal reports that there is an increase in court applications seeking to review child support and alimony orders.  In a survey of members of the American Academy of Matrimonial Lawyers, 39% report an increase in child support applications and 42% report an increase in alimony applications.  Surely, this comes as no surprise to anyone who has lost their job and can no longer afford to meet the obligations of their child support or alimony.  Yet, what about the former spouse who needs the child support or alimony to support their expenses?  And what if both former spouses have lost formerly well-paying jobs?

New Jersey case law permits either the person paying the support or the person receiving it, to seek a modification if there is a “significant” change of circumstances.  What litigants sometimes don’t realize, however, is that the application process itself can be costly — and sometimes protracted.  It is often difficult for a judge to determine whether a modification is warranted.  In those situations, the court can order a hearing — with testimony and evidence.  This is expensive.

When money is an issue — and when is it not? — the parties can try to resolve the modification issues through mediation.  With the help of the mediator, the parties can informally exchange and review appropriate financial documentation.  They can discuss creative solutions, either temporary or permanent, to address their particular issues.  The process is far less expensive than taking the matter to court.  And mediation avoids pitting one former spouse against the other — allowing a reasonable resolution to be reached where the children’s best interests can be considered.

Welcome to my blog. I’ll be looking at various issues dealing with divorce, mediation and collaborative law.