Abba’s hit song Money, Money, Money has been called the gold diggers’ anthem, and with good reason. Sadly, the persona is mistaken in surmising that “[it] is always sunny in the rich man’s world.”
Rich or poor, anyone who has ever experienced the pain of a break-up knows that money cannot fix broken hearts. Ironically, decisions about money and assets can completely consume a couple faced with separation or divorce.
In a Collaborative Divorce that burden is lifted as the neutral financial specialist and the Collaborative attorneys work together to ensure the couple considers all relevant financial issues when negotiating a Separation or Settlement Agreement. As many clients find it helpful to know in advance what decisions they will be faced with, I like to provide my clients with the following checklist:
A. Property Division
1. Marital Residence and other Real Estate
- Any separate property claim?
- Occupancy in interim?
- Payment of expenses in interim (mortgage, taxes, insurance, repairs, utilities).
- If property is to be sold, provisions for sale (when to be sold, price, division of proceeds, payment of expenses of sale, capital gains taxes).
2. Pensions and Retirement Funds
- Valuation.
- Division of value.
3. Business Interests and Professional Practices
- Valuation.
- Division of value.
4. Other Personal Property
- Valuation.
- Division of value/property (cash, bank accounts, stocks, bonds, investments, cars, boats, jewelry, collectibles, household furniture, cash value of life insurance, family photographs).
5. Debts and Liabilities
- Division of debt (credit cards, car loans, bank loans, pension loans, life insurance loans).
B. Children’s Expenses
- Direct Child Support
- Amount.
- Duration (define Emancipation).
- When due?
- How will payment be made?
- Provisions for adjustments in amount.
- Reduction when attending college?
2. Medical Expenses
- Who provides health insurance?
- Who pays for health insurance?
- Who pays for uninsured health expenses?
3. Educational Expenses
- Day-care.
- Private school.
- After-school.
- College or vocational school.
4. Other expenses
- Child-care to allow a parent to work/study.
- Summer Camp.
- Extracurricular Activities.
5. Life Insurance to secure Child Support obligation
- Amount.
- Duration.
- Type.
- Beneficiary.
- Trustee for Children?
C. Parties’ Expenses
- Spousal Maintenance
- Amount.
- Duration (number of years, remarriage, co-habitation).
- When due?
- How will payment be made?
- Provisions for adjustment in amount.
2. Medical Expenses
- Who provides health insurance?
- Who pays for health insurance?
- Who pays for uninsured health expenses?
- COBRA rights and cooperation.
3. Life Insurance to secure Spousal Maintenance obligation
- Amount.
- Duration.
- Type.
- Beneficiary.
D. Income Taxes
- Joint or Separate.
- How to divide existing refund/liability.
- Capital Gains.
- Exemptions/Credits.
- Audits.
E. Miscellaneous
- Future disputes and who will pay (mediation, arbitration).
- How will current legal fees be paid.
- Grounds for divorce.
- Timing of divorce.
- Who will be acting as Plaintiff.
- Religious Divorce.
- Update Estate Planning Documents.
Clearly, making all these financial decisions can be a daunting task, especially in the emotionally-charged environment of a divorce or separation. A qualified Collaborative team can guide you through the process and help you and your spouse to achieve a settlement that best meets your family’s unique needs.
