P.A.R.T.I.N.G - 7 Things to remember if you are thinking about divorce

If you are considering a divorce, rest assured, you are not alone. If you are having trouble making the decision, rest assured, you are not alone. The decision to separate and divorce should is not one to make hastily. It demands careful consideration to make sure the decision is the right one. Even when the divorce is forced upon you, you must take the appropriate time to consider your future. 

Here are seven things to consider:

P is for Parenting 

Parents are always concerned about the effect of divorce on the children. Each family is different. Mostly, parents are the best resources for determining what’s best for the kids—even when adjusting to separation and divorce. When making custody and parenting time decisions, the Court will consider such things as 

  • the age and sex of the children

  • their adjustment to the home and community

  • the wishes of the parents

  • the wishes of the children (with more weight given to children 14 years or older)

  • relationships with extended family members

  • healthcare concerns

  • the parent-child relationship

  • history of domestic violence

  • any “de facto” guardians

A is for Action

The divorce starts with the filing of a Petition for Dissolution of Marriage. There is a filing fee, and Indiana divorce law requires a minimum waiting period of 60 days. If you and your spouse can resolve all issues via negotiation and/or mediation, it’s possible to finish in 60 days. Divorces that require a judge to make decisions take much longer. The provisional/preliminary phase is the time between the filing of the dissolution and the final Decree. This is the time when you need to address big questions and resolve them by agreement or court order.

  • Who will live where?

  • Who will pay what bills?

  • How will the household be supported to maintain stability for the children?

R is for Relationships with Professionals

The right team around you makes all the difference. Chose professionals you are comfortable with. You must have attorneys, therapists, counselors, and financial advisors that you are comfortable with. Pick people that have excellent reputations, but also make sure you can communicate and connect with your team. Choose people who are willing to listen to you and consider your concerns carefully.

T is for Timing

On one hand, timing is everything, Is this the right time? This is a question that is asked of me again and again. Timing may be a matter of personal circumstances—like holidays and anniversaries or children’s upcoming events. It can also be a matter of financial circumstances—like income changes, asset appreciation or depreciation, or changes in employment. 

On the other hand, you may not have the luxury of choosing the right time. You may be in a situation where your spouse has filed. Perhaps he or she has committed an act that requires an immediate divorce. You can still successfully negotiate the process. You must have a lawyer who can help to guide you through the emotional adjustment process as well as the “business” of asset and debt division. 

I is for Income

Indiana follows an “income shares model” in the calculation of child support. Gross income, including regular income, bonuses, commissions, car allowances, housing allowances, and perhaps even regular gifts are a part of gross income for child support purposes. If a party is unemployed or underemployed, his or her potential income can be considered. The Court will consider educational and employment background, availability of jobs, and potential income levels in determining the income imputed to an underemployed.

N is for Next Steps after filing the Petition for Dissolution 

Be prepared. Consider potential living arrangements and potential employment or employment changes. Gather financial documents, records, and tax returns for the previous two (2) years. Carefully review files and information to make sure you have accounted for all retirement accounts and life insurance policies. Finally, inventory assets with value such as paintings, coin collections, and jewelry. 

G is for Growth

You may not see it, but at the end of the dissolution process is the potential for personal and professional growth. In addition to your improvement, you will be amazed at your ability to achieve balanced and successful parenting. Believe in yourself! Believe that you will be better! Do not be content to accept your lot in life! Instead, be ready to take steps into a new future.

Financial Planning During a Divorce

Working through the financial aspects of a divorce is always a difficult and time-consuming process. We recently sat down with our friend Rebecca Gill to discuss the financial aspects of a divorce. Rebecca is COO at DunlapGill Wealth Management Group and is a Certified Public Accountant and Personal Financial Specialist. Rebecca and the team at DunlapGill provide excellent services to residents of Indianapolis, Fishers, Carmel, Noblesville, and other central Indiana communities. 

Below are a few concepts that we discuss in the video above. It is important to note that the tips below and the content of the video is for generalized information only. Each person's situation is different and it is important to meet with an attorney and financial advisor to develop a specific plan for your needs.

Start the process early. It can be very difficult to unwind anything after a divorce is final. You’ll want to make sure you have the complete picture, so it is important to gather information on income, physical assets, liabilities, retirement accounts, savings, life insurance, and other accounts. This will prepare you and your advisor to develop a customized post-divorce financial plan. Each spouse needs to have a plan that addresses short-term needs (like liquid assets) and long-term needs (like retirement savings).

 It’s important to have good credit established. We frequently see situations where one spouse has shouldered the financial burden for the household. All assets, deeds, credit cards, retirement accounts, loans, and mortgages are in one spouse’s name. This isn’t a big deal when dividing assets because Indiana’s divorce laws dictate the allocation. It is a big problem after the divorce is final. In this situation, the other spouse will have little or no credit history. It can be hard to get a mortgage, car loan or other credit extended when the bank doesn’t have a credit history to rely on—even though there may be significant liquid assets after the divorce. Make sure both spouses are building good credit to ensure stability after the divorce.

 You have flexibility with retirement accounts. In certain circumstances, you may be able to take early distributions from retirement accounts during a divorce. Remember, you’ll always be taxed on distributions, but you may be able to avoid penalties. It is important to consult with a financial advisor to balance your short and long-term needs via a master financial plan and to make sure your decisions won’t result in penalties or unnecessary taxes.

 Don’t forget to update your beneficiaries. It is common to get so caught up in the more detailed aspects of a divorce that beneficiaries aren’t updated. Don’t forget to update the beneficiaries of any life insurance, retirement or investment accounts during the process. It is also a good idea to review these with your attorney and a financial planner on an ongoing basis. Beneficiaries cannot be argued in an Indiana courtroom!

The Difference Between a Legal Separation and Dissolution

Legal separations can be used in several different situations for Indiana spouses. Generally speaking, separations allow spouses maintain the marriage while living separately with rules regarding expenses, parenting time, custody or other domestic matters. A legal separation is a good option if the relationship needs a “cooling off” period, if there is opportunity for reconciliation, religious concerns, or even if one partner needs to leave the home for medical reasons and Medicaid benefits.

Legal separations are also used in the period of time leading up to an official dissolution. They provide an initial framework while the parties are working out the final terms of the divorce. Decrees of Dissolution remain in effect for only one year, so if you see yourself heading for dissolution of the marriage, the legal separation action should be converted prior to the anniversary of the entry of the Decree of Dissolution by the Court.

In both a separation and dissolution, a decree is issued. The decree is the official document that outlines the parameters, or rules, that the parties will abide by. Because a separation maintains the marriage, it is a more flexible option and gives the parties flexibility in working out the terms of the decree, as well as the option to reconcile or move toward dissolution.

In dissolution, the action is final and permanent. Once the decree is issued, both parties must live by the terms and there is no opportunity to reconcile.

If you are considering a divorce, a legal separation is a good place to start.It allows you to be separated, while also laying out a framework for what each party is responsible for. In some cases, reconciliation happens after the separation. If not, you’ll already have a head start on the dissolution of the marriage and can move forward quickly.

My Story: Why Having a Will is Important

Wills and estate planning are important steps to protecting your family in Indiana when unexpected events happen.

After more than 20 years of marriage, my first husband passed away at the age of 43. As a new widow, I was left with three children, a home, and everything that came with probating his will. Fortunately, as an attorney, we had a will, actually a family trust, in place. We had named guardians and a trustee. Generally, we were well prepared which made things fairly easy to work through.

We never think that we will become a widow, or a widower, or that we will leave our children as orphans. Its uncomfortable to think about.

We live in a society where travel a lot, we’re in traffic, and illnesses occur. It is important to have a plan. Know where your assets will go. Know how you want your money spent and who will spend it. Know who will take care of your children. Plan to make the best of a bad situation, and don’t leave it to the Indiana courts to decide.

You’ve Got Your Decree! – Here are Some Suggestions for Tying up Loose Ends.

So, you’re there!  You’re divorced!  You take a look at the final Decree, and breathe a sigh of relief.  But, here are a few suggestions to make sure all of those pesky loose ends of tied up neatly.

If as a part of the Decree, you have been awarded a division of retirement accounts, make sure the accounts are actually transferred to your individual account, set aside in your individual name, or reserved in your name for distribution at a future date pursuant to the plan.  If the plan is a “qualified plan,” such as a 401(k) or pension, follow up with your attorney within 60 days to make sure the appropriate Qualified Domestic Relations Orders have been sent to the plan administrator.  [Beware:  QDROs may take several months to be approved by the plan administration, so calendar follow up dates every three months until confirmation that the account has been transferred is received.]