Financial Fear During Divorce

Financial Fear During Divorce

Fear of a compromised financial future is common during divorce. Understanding the fear—and knowing what to do about it—is essential.

Because of the requirement to divide debt and assets during divorce, couples of all ages are concerned about getting their fair share. For individuals closer to retirement, the need is more urgent with fewer years remaining to rebuild a nest egg.

With longer term marriages, a significant disparity may exist between the earning potential of spouses. For a less-monied spouse who has been out of the workforce, financial worries can include:

  • An incomplete picture of the assets and income of the household
  • Lack of knowledge about household debt load, leading to unfortunate surprises when the true financial condition becomes known
  • A poor understanding of the household budget and lifestyle costs
  • Insufficient individual credit history
  • Financial and other threats made by a partner in hopes of securing unfair agreements, unfair child custody or financial arrangements

Each of these fears is realistic but can be addressed with assiduous homework and by retaining skilled legal counsel. Consider these tips to fight financial fear during your divorce process:

  • Become informed: Review and copy bank, tax, investment and other statements. Review the checkbook and credit card statements to understand what you need to move forward.
  • Check your credit: Order a credit report. Review and close unneeded or joint accounts. An unused home equity loan can lower your credit score and leave you financially vulnerable. Apply for credit in your own name if you have not already done so.
  • Retain legal counsel: Work with experienced, aggressive legal counsel to protect your rights, finances and future.

When Does a Spouse Have Rights to a Revocable Trust?

For numerous reasons, individuals or couples may choose to place property in revocable trusts. These trusts hold the property during the grantor’s lifetime and then pass that wealth onto heirs when the grantor dies. When a trust is revocable, the grantor can change the terms, including the named beneficiary, at any time. The question for couples going through a divorce is whether a grantor spouse can amend the trust to remove the other spouse as beneficiary. The answer depends on the original terms of the trust, the timing of its formation, and the source of the assets that funded the trust.

If both spouses are named as grantors, the court will operate under the presumption that the trust funds are marital property and should be divided equitably. But if only one spouse established the trust, it is possible that the trust is separate property, and the grantor spouse might be free to amend its terms.

However, the signature on the trust might simply be a formality. What’s more important is when the trust was established and where the funds came from. If a grantor formed the trust before the marriage and only added the spouse as beneficiary in consideration of marriage or after the wedding, the court could treat the trust and its funds as separate property. If the grantor formed the trust during the marriage, he or she would have to show that only separate property funded the trust. If the grantor used joint assets at any time to fund the trust, the court will consider it marital property and divide it equitably.

Finally, the court can use trust income as a factor in determining child support and alimony.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Is Mediation the Best Route in Divorce?

Is Mediation the Best Route in Divorce

Alternative dispute resolution (ADR) is a cost- and time-effective divorce option that enables couples to avoid contentious litigation. Two types of ADR used in family law in Utah are mediation and the collaborative divorce process. Mediation employs the use of a trained, neutral third party, such as an attorney or other trained specialist, to assist a divorcing couple craft satisfying divorce and child custody agreements. In the collaborative process, each spouse is represented by a trained attorney and the group together works to create agreements that reflect the wishes of each party.

While collaborative divorce and mediation are alternatives to litigation, I’m telling you as a divorce lawyer that these methods may not be the best choice for you. Drawbacks to these processes include the following:

  • Communication: ADR may not be a good option for couples experiencing a volatile break-up. When partners are bitter, non-communicative, or hostile, mediation can quickly go awry and turn a low-conflict process into the first skirmish of a long divorce battle.
  • Integrity: If a spouse acts in bad faith — either hiding assets or attempting to manipulate his or her partner — mediation is a futile exercise.
  • Representation: Without advocacy by a family law attorney, either party in mediation may feel pressured to make uninformed concessions they would not otherwise agree to.

Under any circumstances, divorce is difficult. Before you make decisions that affect your future, contact an experienced divorce lawyer to choose the route through divorce that is best for you.

Documents to Update After Divorce

When your divorce is finalized, it’s time to update some key documents. These include:

  • Social Security: If you changed your name when you got married, you can regain your married name and obtain a new Social Security card through the Social Security Administration. If you are middle-aged or older upon divorce, inform yourself about Social Security benefits.
  • Driver license: Change the name on your driver license if needed through the Utah Department of Motor Vehicles.
  • Healthcare proxies: Estate planning is an important priority following divorce. A new will and other estate planning documents should be prepared along with updated health care documentation.
  • Policies: Life insurance, retirement and other policy beneficiaries should be revisited if appropriate.
  • Credit cards: Order a copy of your credit report and review it to ensure your credit record is clean following your divorce. There may be forgotten joint accounts, equity loans or other lines of credit to be closed following a divorce. Follow through with banks and creditors.
  • Safety deposit boxes: If your safety deposit box is held jointly, close your account. Obtain a new box and move your valuables. The signature of your ex-spouse is likely required to close the box.
  • Memberships: Club and other memberships may need to be updated, including online memberships such as Amazon Prime.

Although addressing more legalities may seem like too much following your divorce, these updates conclude your divorce and enable your future to unfold smoothly. With time, your individual identity becomes well established.

Tips for Achieving Financial Success During, After a Divorce

While planning for your divorce might seem like a daunting and unappealing process, it is important to prepare yourself for the process you are about to go through and what lies beyond it. Specifically, sound financial planning can help you avoid some of the challenges divorced people tend to face.

Below are a few tips to help you protect yourself financially during and after a divorce:

  • Choose the right lawyer: The attorney you consult should be able to help you achieve a favorable outcome that will set you up for long-term financial stability. He or she should be a true partner to you throughout the entire process.
  • Inventory everything you own: Keep track of what you own and the amount of money you have in accounts and other assets. Get copies of all documents that verify these assets so you have clear evidence and are more organized when settlement negotiations begin.
  • Consider taxes: The way assets get divided during the divorce process can have some significant tax ramifications. You must consider this for every move and decision you make.

  • Check your credit score: It is important to know where you stand so you are not surprised after your divorce when you find yourself in need of a loan, but are unable to get one due to a poor credit rating.
  • Update your beneficiaries: Review the beneficiaries on your retirement plans and any other accounts or estate documents with named beneficiaries to be sure you are not inadvertently giving money or assets to your former spouse.
  • Insure child support and alimony: If your former spouse becomes disabled or passes away, you don’t want to be left high and dry when it comes to child support and alimony. This insurance can provide you with some peace of mind.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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How to Get the Best Outcome in Divorce

As you go through your divorce, important to be focused on the long term, making sure you’re ending up with the best possible settlement for you. This requires you to have a clear picture of exactly what it is you want as you move forward with your life.

How to Get the Best Outcome in Divorce

With how stressful and emotional divorce can be, however, this is often easier said than done. To make this process less difficult, you should identify all of the most important issues and your top priorities ahead of time, and stick to them throughout the divorce proceedings. Having a game plan before negotiations actually begin will help ensure you stay on the right track.

The most common issues individuals need to navigate are child custody and support, the division of marital assets and alimony. Let’s take a quick look at each:

  • Child custody and support: If you have children, what happens to them is going to be a significant component of your divorce. Even if custody itself ends up being an easy issue to resolve, you still must consider things like visitation schedules, the division of expenses, the amount of child support that the non-custodial parent will pay and how you will jointly make child-rearing decisions.
  • Property division: The division of martial property and assets can quickly become contentious, especially when there are particularly valuable or sentimental items involved. Consulting a divorce attorney or financial planner will help you figure out how to best address your priorities through this process.
  • Alimony: If alimony (or spousal support) is an issue in your divorce, get an idea of how much you’re seeking or willing to pay out in alimony payments each month. Note that almost all alimony arrangements are temporary in nature.

Child Tax Credits After Your Divorce

Some of the most valuable tax credits are those that are granted to parents to help provide assistance with the costs of raising their children. But when parents are separated or divorced, who gets to take advantage of these tax credits?

There are different stipulations for each type of tax credit:

  • Child and Dependent Care Credit. This credit covers expenses for child care options like day care so that you can work or look for work. The total credit amount of up to 35 percent of care expenses, up to $3,000 for one child and $6,000 for more than one, so long as those children are under 13 or disabled. For divorced parents, only the custodial parent is able to claim the credit.
  • Child Tax Credit. This tax credit gives parents that have incomes below a certain level a $1,000 credit for each child under the age of 17. The custodial parent will usually take this credit, but the noncustodial parent can claim it if the custodial parent decides to release the dependency exemption to the noncustodial parent. The credit is also lowered for single parents or could be completely unavailable if gross income is over $75,000.
  • Earned Income Credit (EIC). EIC is meant to provide low-income workers with tax breaks. A taxpayer’s ability to claim this credit depends on adjusted gross income and earned income, and for parents, the total amount of the credit depends on the number of kids. Only the custodial parent can claim EIC in a divorce. Alimony and child support paid to you does not qualify as earned income.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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