What are the Five Most Important Things to Consider in Post-Divorce Financial Planning?
When considering a divorce, post-divorce finances should be one of your first thoughts. Following a divorce, the parties will divide their assets, their incomes and still must address all the marital liabilities, the cost of the litigation, and attorney fees incurred to procure the divorce. Furthermore, the parties will have to address complex financial issues such as alimony and child support. In many divorce cases, the parties must address complex assets such as retirements, 401(k) accounts, and stock options, which can affect the parties’ financial future. As one can clearly see, the divorce process is fraught with pitfalls that can leave you or your spouse in financial ruins. To avoid these treacherous financial situations, contact a divorce attorney to assist with presenting your economic needs to the court and planning that will protect your financial future following a divorce.
Below are five areas to review with your divorce attorney when creating your financial plan and developing a litigation strategy for your case.
Child Support Financial Obligations Following a Divorce
Child support will be a main area of focus until at least your children reach the age of 18. In some circumstances, the court can require that you be required to pay child support until your child reaches 19 if they are still in high school. Florida’s child support laws also can require child support to continue indefinitely if a child suffers from a disability that will prevent them from becoming economically self-sufficient. When analyzing child support obligations, you and your Orlando divorce attorney need to understand all aspects of your income and all sources of income that your spouse may be receiving. The accuracy of child support calculations requires a diligent effort on the part of you and your attorney to accurately calculate all sources of income and to calculate all allowable deductions. Another key financial consideration is who will be providing the children’s health insurance and if it reasonably available in cost. The court will also address child-care costs when determining the total child support obligation. Addressing all these issues and developing a strong and aggressive financial strategy is critical to securing your financial future following a divorce.
It is important that your divorce attorney be provided with all necessary financial information to ensure that any settlement or order that is reached will allow both parties to maintain financial stability whether paying or receiving child support.
Spousal Support and Alimony Financial Obligation Following a Divorce
Alimony often raises some of the most complex and litigious financial issues raised in divorce cases. Alimony requires that the court analyze the financial need and ability to pay of the respective parties. In making this determination, Florida Statute 61.08 clearly mandates that the court must make specific finding of fact as the factors set forth in the statue. Section 61.08 in pertinent part states that the court shall consider the following factors in awarding alimony.
a) The standard of living established during the marriage.
(b) The duration of the marriage.
(c) The age, physical, and emotional condition of each party.
(d) The financial resources of each party, including the non-marital and the marital assets and liabilities distributed to each.
(e) The earning capacities, educational levels, vocational skills, and employability of the parties and, when applicable, the time necessary for either party to acquire sufficient education or training to enable such party to find appropriate employment.
(f) The contribution of each party to the marriage, including, but not limited to, services rendered in homemaking, child-care, education, and career building of the other party.
(g) The responsibilities each party will have regarding any minor children they have in common.
(h) The tax treatment and consequences to both parties of any alimony award, including the designation of all or a portion of the payment as a non-taxable, non-deductible payment.
(i) All sources of income available to either party, investments, or any asset held by that party.
(j) Any other factor necessary to be just and equitable justice between the parties.
Even a quick review of the alimony factors show that the financial abilities and status of the parties is a key component to Florida alimony awards. In many cases, in developing a sound financial and litigation plan for alimony cases, our attorney will work hand in hand with forensic accountants and certified divorce financial planners. It is often critical that a forensic accountant work closely with your Orlando divorce attorney to determine the full and true financial status of each of the parties, and each party’s true ability to actually provide for themselves. In many cases the attorney and accountant can locate income producing assets or even hidden accounts and income that can drastically alter a party’s need for alimony or their ability to pay alimony.
In some divorce cases, the issue can arise of whether a party should have income imputed to them when determining their own financial needs. In these alimony cases our Orlando divorce attorneys know that often a vocational assessment may need to be made by a vocational expert to determine what job skills and employment opportunities a party has available to them. The court will not be able to impute income on mere speculation, and the court will need to receive evidence of the party’s actual earning capabilities and job availability in the community. The presentation of the evidence is often complex and requires expert opinion testimony, and that is where an Orlando divorce and alimony attorney can excel in having the court consider this crucial evidence.
Financial Obligation Regarding the Marital Home and New Living Arrangements
A major issue in almost every divorce case is how the parties will handle their living arrangements and financial obligation regarding those obligations following a divorce. In many cases, the marital home and the costs associated with it are a point of contention, since the home and mortgage are often the most significant marital asset or marital debt. Often financial analysis will need to be conducted to determine the financial questions regarding the marital home. Our Orlando divorce attorneys know that often an appraisal will be required to determine the true value of the martial home and that documents evidencing the mortgage payoff will often need to be subpoenaed. This evidence will need to be presented to the court so the court can properly value the home when it distributes the assets and liabilities or orders the home sold. Therefore, it is important to have a qualified Orlando divorce attorney gather this crucial evidence and advocate on your behalf to mitigate how the divorce may negatively affect your financial future.
Budgeting After Your Divorce
When a divorce is imminent, you will want to begin budgeting immediately for after the divorce is finalized. This will include a drop-in income, debt that will be deemed yours during the divorce, and any support payments. Even though you will not know the full extent of support and debts granted until your attorney assesses your situation, it is good to be prepared for the possibilities of what may come. Careful budgeting can mean the difference in financial stability and financial disaster.
Divorce Retirement and Financial Concerns
In Florida, retirement assets are a highly controversial topic and one that causes the most strife between divorcing couples. Since retirement funds are considered marital assets, (if they were earned during the marriage), it is critical to analyze the retirement plan to determine what portion of the plan is marital and non-marital. In many cases if there is a non-marital portion of the retirement that has significantly appreciated during the marriage, the original non-marital portion and the appreciation attributable to that portion can be excluded from the court’s ultimate distribution of the assets. The equitable distribution of retirement benefits is one that is complex and can raise post-divorce financial concerns for years to come. When dealing with the division of retirement accounts following a divorce, it is important to contact a divorce attorney to guarantee that your assets are distributed equitably.
Contact The Orlando Divorce Attorneys At The Virga Law Firm
When getting divorced, it is imperative that you take your post-divorce finances into consideration when entering into any agreements with your spouse or the courts. Talk to the divorce attorneys at The Virga Law Firm to protect yourself in all aspects of your divorce. Contact our office today at 800-822-5170 to schedule your consultation.