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New York High-Stakes Family Law Blog

Paying for college after a divorce

The desire for one's children to go to college is a normal thing for many New York parents. When a couple gets divorced, the potential for a child to get a college education could be at risk unless the costs for this are addressed during the divorce negotiations. Whether a child is five or 15, parents should outline basic provisions and terms for how they will fund a higher education for their child when the time comes.

Forbes explains that parents review a variety of options in their terms, such as preferences for a student to apply only to institutions that are in their home state and that are publicly funded versus privately funded in an effort to keep the costs down. Some families choose to have one parent provide an up-front payment designed to cover their portion of all college costs. This money can be put in a trust fund or other account for safe keeping until it is needed.

Divorce, mortgage and your financial future

It is not uncommon for people in New York to wish they could find a way to keep their homes when they get divorced. A home often has a lot of emotions and memories attached to it, making it difficult for people to view it as simply a piece of property. However, when getting divorced, it is important to assess a house financially.

If one spouse wants to keep the house, they should take care to make sure they can truly afford the house on their post-divorce income. The Mortgage Reports that the person who wants to keep the house should seek a new mortgage that is in their name only instead of keeping an existing joint mortgage. This is the only way that the other spouse can completely sever their financial ties to the home.

When married business owners divorce

It is not uncommon for a married couple in New York to own and operate a business together. The pair might have been married before they formed the business or they may have been business partners who eventually became romantically involved. Either way, there are unique benefits and challenges to running a company with the person you are married to. One of the challenges arises if you end up separating and divorcing from your spouse.

As explained by Forbes, along with deciding who will get the house, when you will each have time with your children, and other matters, you must now also choose what to do with your joint business. Like family homes, some businesses end up being sold to third parties when the owners get a divorce. The proceeds of the business then must be addressed as part of your asset and debt division agreement.

Ex-model tries to challenge her prenuptial agreement

Many in New York may think that asking their fiancees to work together to develop a prenuptial agreement signals doubt about the potential of their marriages to last. yet recent years have seen more and more couples enter into such agreements not expecting to get divorced, but rather to convey to their partners that they have no intentions of profiting off their marriages. In most cases, a prenuptial agreement will both allow the parties entering into a marriage to keep whatever assets they bring in and to stipulate the terms of a settlement should the marriage end. Those entering into them should understand what they are agreeing to in order to avoid being saddled with unfavorable terms. 

Such terms are what the soon-to-be ex-wife of a high-profile celebrity realtor is attempting to challenge as the couple works their way through their divorce case. The woman claims that the marriage ended after only 16 months over a dispute about having children (he, despite having three kids, reportedly was no interested in fathering any more kids). She apparently consented to a prenuptial agreement that would pay her $45,000 month for half the duration of the marriage. Yet after allegedly giving up her career as a model in order to raise his kids, she claims that she should now be awarded temporary spousal support. 

Avoiding 401k asset division

While most New York residents who are entering into divorce proceedings may be fully prepared to split their marital assets with their soon-to-be ex-spouses, they may be less than willing to part with any of their saved retirement income. Yet the contributions made to a retirement account (such as a 401k) during a marriage come from marital income (and are thus considered to be marital assets). How, then, might one be able to avoid having to divide up their 401k in their divorce? 

It may not be easy. Keeping the full value of one's 401k requires the cooperation of their ex-spouse, which may be unlikely due to lingering emotions one (or both) sides may be harboring stemming from the end of their marriage. Plus, according to CNBC.com, when the court issues a Qualified Domestic Relations Order in a divorce case, one can make a current withdrawal from a retirement account without incurring the typical early withdrawal tax penalty. This provides one's ex-spouse with added incentive to hold on to their portion of any 401k contributions. 

Parallel parenting may protect kids from parental conflict

After your divorce, collaborating with your spouse may be the last thing you want to do. Unfortunately, if you and your ex have young children together, communication and collaboration may be necessary for the foreseeable future.

Many parents who share custody of their children opt for a tradition co-parenting arrangement. This usually requires ample communication between parents to make sure the best decisions are made regarding their children. Some co-parents may even enforce some of the same rules in both houses, maintain an open dialogue, and work together to solve problems related to their children.

Head of household filing status after divorce

If you and your spouse in New York are discussing the possibility of getting divorced, it is important for you to learn as much as you can about the financial implications of this decision. Some of the decisions made during a divorce may have immediate repercussions but others may not be evident until later on. One area of your life that will be impacted by your divorce is income taxes. If you are not in the middle of tax season, it might be easy to ignore this as you negotiate with your partner about who will get what from your marital estate. However, special attention to taxes is essential during your divorce.

As explained by SmartAsset, once your divorce is final and it comes time for you to file your first solo tax return, your tax filing status and therefore your tax bracket may be dictated in part by the terms of your divorce agreement. Unmarried taxpayers can file income tax returns under one of two statuses. The first is single and the second is head of household. The latter status offers you more advantageous deductions and a lower tax rate.

Moving away with your kids

Life will inevitably go on following your divorce in New York. Part of that may include you needing (or wanting) to relocate. That can cause complications if you have custody of your kids. Often, the issue of relocation will be addressed in your custody agreement. Yet if it is not (or you find yourself needing to relocate for family issues or business), what are you to do? Many come to members of our team here at Robert G. Smith, PLLC with this same question. Like them, you may be concerned that your decision to relocate could negatively affect your custody situation. 

You typically need to inform both your ex-spouse and the family court that has jurisdiction over your case of your intent to relocate well in advance of it actually happening. If your relocation will impact your ex-spouse's visitation rights, then the court will evaluate your case to determine whether you have a good reason to move. According to the New York City Bar, factors that it will consider include: 

  • The quality of relationship your kids share with both you and your ex-spouse
  • If the relocation would cause strain on the relationship with your ex-spouse or other siblings not living with you
  • How much your kids' lives may be improved financially, emotionally and scholastically by the move
  • If your kids and your ex-spouse will be able to maintain their relationship by simply modifying their visitation

Business valuation in a divorce

When a married couple in New York owns and operates a business together and decides to get a divorce, the question about what to do with the business logically arises. Some people might be able to find a way to work together as business partners even if they are no longer married. Forbes indicates that for people who do not feel they can do this, they might sell their business to a third party or allow one spouse to buy the other person out.

In these latter two situations, the value of the business must be determined and agreed upon. This is something that should happen as early in the process as possible, in large part because the financial worth of the company will be directly linked to other financial agreements in the divorce settlement.

Financial secrets during marriage can impact divorce outcomes

Mistrust among divorcing spouses can be common, even during amicable divorces. However, when a spouse has a history of financial infidelity, mistrust can play an even bigger role in a divorce.

Financial infidelity is becoming more common in America, and could be contributing to numerous divorces each year. Financial infidelity involves secretive acts regarding significant amounts of money or debt. It can include secretly spending money, owning secret credit cards, having secret bank accounts, hiding secret stashes of money or accumulating secret debts, but it does not typically include small secrets, such as a secret birthday gift.

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