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How complex compensation packages can affect divorce proceedings

Wed, 01 May 2024 12:06:43 GMT

Factors ranging from household resources to employment arrangements can directly influence divorce proceedings. The Indiana divorce process necessitates a division of personal property and an intentional re-allocation of personal debts between the spouses. Spouses in higher-income marriages may have complex resources and assets that are not liquid, meaning they can’t divide them easily or directly.

A professional’s employment compensation package is an example of a non-liquid asset that could complicate a divorce. Individuals pursuing professional success often move into positions that offer complex compensation packages. In addition to a base salary and benefits, they may receive deferred compensation and incentive pay.

Deferred compensation can be valuable and can push someone to achieve certain professional goals. However, deferred compensation can be a real challenge to address in a complex divorce. What happens to deferred compensation someone has not yet received during divorce proceedings?

Some deferred compensation is subject to division

Deferred compensation can come in many forms. Companies may offer retention bonuses if someone stays with the company for a set amount of time or compensation based on either their professional performance as an individual or the growth of the company. Stock options and other forms of deferred compensation can significantly augment the base salary a company provides a worker.

For the purposes of litigating property division, spouses must establish how much of the deferred compensation one spouse may have earned during the marriage. Then, they may need to establish a reasonable value for the deferred compensation, which can be challenging.

Estimating the value of stock, for example, can be very difficult if someone won’t receive their stock options for two more years. Especially in cases where the company has not yet had its IPO, it can be very challenging to accurately estimate the appropriate value of deferred compensation. Deferred compensation earned during the marriage is much the same as any other income, other than the fact that the spouse has not received it yet. It can influence the division of other assets and marital debts.

Those with complex compensation packages may prefer to negotiate property division settlements without deferring to a judge so that they can protect certain resources when they divorce. Recognizing the unique challenges that may be inspired by high-demand careers when people divorce may help people as they prepare for the end of a marriage.

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How are gray divorces different than divorces earlier in life?

Sat, 06 Apr 2024 12:13:31 GMT

People often enter into marriage with optimism for the future of their relationship. Some people quickly realize that their new spouse is not the person they imagined. Other people enjoy a functional marriage for years before things start to change.

Some couples grow apart over time. Other families end up impacted by the bad behavior of one spouse, compulsive gambling or substance abuse. Even those who have stayed married for decades sometimes find themselves contemplating divorce. Divorces that occur when spouses are age 55 or older and that involve couples who have remained together for years are gray divorces. These divorces are increasingly common and often harder to navigate than divorces earlier in life.

What makes them different than average divorce proceedings?

There are usually more financial challenges

In theory, the exact same laws apply to divorce regardless of how long people have remained married. However, those contemplating the end of the long-term marriage have more assets to share with their spouses. Property division can become much more complex after decades of marriage or when people are close to retirement age. It is normal for those preparing for a gray divorce to worry about financial instability caused by divorce expenses and the division of key resources. Sharing home equity and retirement savings can significantly alter what someone has available during their retirement years.

Social consequences may be more serious

People often expect that divorce after their children have left home should be less difficult for the family. However, they fail to consider how the mandated time with both parents might help the children overcome their intense emotional reactions to the divorce. Without a requirement to spend time with both parents, the adult children of divorcing parents might take sides and forever alter the relationship they have with one of their parents. Other relationships could also change substantially after a gray divorce.

Those who approach gray divorce with an understanding of the challenges involved may have an easier time creating a scenario that allows them to thrive in their golden years. Approaching divorce later in life with the right attitude and support can make a major difference for someone in an unhappy marriage.

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The 4 C’s of successful co-parenting

Fri, 08 Mar 2024 12:15:30 GMT

Co-parenting after a separation or divorce can be challenging, but it is essential for the well-being of your children. Successful co-parenting requires effort, patience and effective communication.

Even though it may sound like a lot of work, studies consistently show that co-parenting is highly beneficial for children in every area of their lives. They are happier, healthier and do better in school.

Children first

The first and most important recommendation for parents is to put their children first. When the parents focus on the children and regularly remind themselves that they are doing this for them, it is easier to cope with the difficulties that may naturally pop up between the parents.

Communication

Communicating well sounds like a simple task but we all know how difficult it can be to communicate, especially with someone you were once in a relationship with but later divorced. However, there are tools you can use to communicate better. For example:

Use active listening. When the other parent tells you how they feel, paraphrase what they say to you and ask them if that is what they mean. Often times, parents want to feel heard.
Make a promise to communicate respectfully at all times and to stay away from blaming and critiquing each other. Remember that both of you want your children to be happy.
Create a co-parenting plan and stick to it for the most part, with some flexibility. It is good to have a stable routine while at the same time acknowledging the reality that life happens.
If either parent is upset with the other, try calming down before communicating, and if emotions run too high, try emailing each other about the problem.
Do not be afraid to seek help from a mediator, family counselor or attorney if you hit a roadblock and need help finding a solution. Sometimes the help of a third party can be the answer to a problem.

Consistency

Children thrive when they have a routine and when they know what is going to happen. Try being as consistent as possible with your child and the other parent and do not make promises you cannot keep. If you say you will do something, do it. This will support building trust and show you are reliable.

Conflict away from the child

If there is conflict between you and the other parent, make sure you keep it away from the child. Do not speak negatively about the other parent to your child because that can hurt the relationship between them and the child.

The divorce is between the spouses, not the children. Co-parenting is an acknowledgement that children need both parents and science shows that it is highly effective in supporting children’s development and growth.

If you and your spouse choose co-parenting after separation or divorce, be mindful of the choices you make, establish rules and boundaries, and remember to always be respectful to the other parent, as you would be toward your child.

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How do the Indiana courts divide property when people divorce?

Mon, 19 Feb 2024 12:16:35 GMT

There are often several concerns that hold people back from divorcing even when their marriages feel dissatisfying. Those with young children may worry about losing parenting time. People often feel a strong sense of obligation to work on their marriage before pursuing a divorce, especially if they belong to a traditional culture or share a faith with their spouse.

In some cases, uncertainty about one’s financial future might prevent an individual from filing for divorce despite feeling unhappy with their current circumstances. Most people have heard concerning stories about someone left in a difficult financial situation following a divorce. People sometimes let those stories determine their actions at the end of a marriage. As such, those who understand the state’s property division rules might feel less anxious about the potential outcome of a divorce filing.

The Indiana family courts want a fair outcome

Every state has its own rules about property division. In Indiana, the standard requires the equitable or fair division of a couple’s assets. What is fair can be drastically different from one case to the next.

If the matter goes to court in a contested divorce, a judge reviews details about the marriage and the circumstances of each spouse to decide what might be appropriate. Typically, judges can look at factors such as the separate property of each spouse, their potential for income and even their custody arrangements. In most cases, marital misconduct plays little, if any, role in the property division process. However, judges can consider some types of misconduct, especially in fault-based filings.

A judge’s decisions about property division can affect someone’s standard of living for years. While there is very little certainty about how a judge might divide people’s resources, almost anything earned or acquired during the marriage could be vulnerable to division.

Many people dislike the degree of uncertainty that comes with litigated property division. They may attempt to mediation or direct negotiations through attorneys to reach an agreement about property division. When spouses can agree on terms, they can essentially control the outcome of their divorce proceedings. Otherwise, they rely on a judge’s interpretation of the situation.

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Can a third-shift or swing-shift schedule affect custody?

Tue, 23 Jan 2024 12:17:30 GMT

Parents thinking about divorce in Indiana may have several concerns preventing them from filing. Some adults worry that the end of their marriage could have a negative impact on the family’s standard of living and leave them unable to provide for their children’s needs. Many others might worry that their current employment arrangements could leave them unable to spend time with their children.

When there are two parents living together, having one take a third-shift job or a position where they have swing shifts may seem perfectly reasonable because the other parent is always around to even things out for the children. Many parents might worry that their unusual schedule could prevent the courts from granting them shared custody if they decide to file for divorce.

Is it true that someone who works a third-shift job or regularly works swing shifts cannot fully share custody after a divorce?

Parents can work around their job schedule

Despite what many people fear, the family courts in Indiana don’t automatically write someone off as a parent simply because they work overnight. If a judge makes the decisions about custody matters, the focus should always be on the best interests of the children.

With rare exceptions, family law judges try to keep both parents actively engaged in the lives of the children. A judge shouldn’t relegate a parent to visitation just because they work late shifts at a hospital or a factory. Instead, they may develop a custody arrangement that reflects the restrictions on the parent’s schedule.

A judge cares more about the attitude that the parent has toward the children and the needs of the children than they do about someone’s unusual schedule. Plenty of parents who work third shift do so because of how much they love their children. In fact, there has even been research that shows parents working late or unusual shifts may have more opportunities than those working standard first-shift jobs to connect with their children in some cases.

Families don’t have to take the matter to court and ask a judge to decide. It is also theoretically possible for the two adults in the family to negotiate their own terms for sharing custody. Particularly if someone works a three or four-day week because of longer shifts, they could potentially enjoy their parenting time on days when they do not have to work. Factors including the age of the children, their school schedules and even the number of children in the family can influence the best way to divide parenting time between the adults when one of them works swing shifts or third shift.

Understanding what influences a judge’s approach to Indiana custody matters may benefit those currently worried about preserving their relationship with their children and who cannot reach mutually-agreeable custody terms with their ex.

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What happens to retirement accounts during divorce?

Sat, 23 Dec 2023 12:18:22 GMT

Divorce inspires the challenging task of dividing assets. Retirement accounts are often a significant focus of this process, as they’re often a significant asset.

When each party has their own account and both accounts are of similar value, there might not be any need to divide these retirement accounts. In the absence of that, there are specific rules that govern the division of these accounts.

When is a qualified domestic relations order necessary?

A qualified domestic relations order becomes essential when dividing qualified retirement accounts in a divorce. These legal orders are specifically designed to address the distribution of retirement benefits, ensuring that the non-employee spouse receives their rightful share.

QDROs are typically required for dividing retirement plans covered by the Employee Retirement Income Security Act, such as 401(k)s and pensions. Without a QDRO, dividing these assets can become legally complicated and end in unintended tax consequences or loss of benefits.

When is a transfer incident to divorce necessary?

Transfers incident to divorce are crucial for handling individual retirement accounts during the division of assets. Unlike retirement plans that require a QDRO, IRAs can be split under the divorce decree or separation agreement without incurring early withdrawal penalties or immediate tax liabilities.

This permits the transfer or rollover of the IRA assets to the other spouse, which is a non-taxable event. Executing these transfers correctly is essential to avoid potential tax implications and ensure both parties receive their fair share.

What else is considered in property division?

Beyond retirement accounts, property division in divorce encompasses a wide range of assets. This includes physical properties like homes and vehicles, investments, business interests and debts. Finding the appropriate division for everything is often a delicate balancing act.

The property division process is often a contentious matter, so understanding what’s possible is important. Anyone who is facing divorce should ensure they’re thinking logically about how the options available can impact their future. It may behoove them to seek legal guidance to evaluate the possibilities and effectively execute a strategy that makes sense given their unique circumstances.

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4 options for a marital home during divorce

Thu, 16 Nov 2023 12:21:41 GMT

A marital home is often the most significant asset a couple may be compelled to manage when spouses divorce. If you are divorcing, you’ll have to consider several factors when trying to determine the best course of action for your home.

Typically, there are four possible options that you can consider when you’re trying to determine what to do with the marital home.

Sell the home

In many cases, the marital home is sold during the divorce process. This can enable both parties to pay off marital debt or to fund the purchase of separate residences. There are several considerations that must be evaluated if you choose to sell your home. You must know the home’s value, and both parties must agree on the sale price. Remember, any mortgage remaining on the home must be paid when you sell the house and only the remaining profits will be available for asset division purposes.

Buyout

Another option commonly used during divorce involves one spouse buying the other spouse out of their portion of the home. This could be a cash transaction; however, that’s not always the case. One party may take on a more significant debt load than the other party or hand over other marital assets to make up the difference in buying the home. If a mortgage remains on the house, it must be refinanced into a mortgage only in the purchasing person’s name.

Bird’s nesting

An unconventional option that some people take advantage of involves keeping the home to use for the bird’s nest parenting style. This involves the children remaining in the home while the parents rotate in and out, based on whose turn it is with the children. This option requires the adults to work closely together to take care of things for the house. They also need to plan what will happen to the home when the children become adults.

Mutual rental property

Another option not commonly used is maintaining mutual ownership and renting the property out as a source of income. The exact terms of this partnership should be written so it’s clear how expenses are handled and what will happen with profits.

Ultimately, the marital home is only part of the property division process, so consider other components before committing to an approach. Seeking legal guidance can help you to make truly informed decisions in this regard.

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What to expect when divorcing a narcissist

Wed, 18 Oct 2023 12:22:57 GMT

It’s hard to tell when you’ve encounter ed a narcissist – unless maybe you’re married to one.

It’s estimated that up to 5% of the U.S. population has a narcissistic personality disorder, and many of them don’t show their true colors to their spouses until after their unhappily wed. If you’ve had enough and want out of your marriage, however, it pays to understand what you can expect.

Narcissists don’t like to let go

Communication

One of the most important things to understand about a narcissist is that, underneath all of their bluster and grandiosity, they actually have a very fragile ego. They struggle to connect with other people on a true emotional level, and they desperately need external validation.

When you seek a divorce, it will disrupt the illusion they try to create for themselves, so they may do just about anything to regain their balance. You can expect:

High-conflict proceedings: Some narcissists thrive on conflict, and they don’t mind using prolonged, contentious legal battles to maintain control or seek revenge. Be prepared for disputes over assets, child custody and even trivial issues.
Manipulation and gaslighting: Narcissists are skilled at manipulating and distorting reality to make themselves look like victims. They can’t conceive of a divorce where nobody is the “bad guy,” so expect to be portrayed in the worst possible light to everybody they know. Outright lying isn’t beyond the possibilities.
Emotional abuse: Expect emotional abuse to intensify during the divorce process. They may belittle, threaten and demean you, possibly just to hurt you.
Boundary violations: You have to set boundaries early in a divorce, but expect a narcissistic spouse to immediately try to trample all over them. It can help to route all your communications through formal channels.

Because it can be so difficult to go through a divorce with a narcissist, it’s wise to get your plans together before you make your intentions known. That means things like making copies of all your financial paperwork, figuring out where you intend to live and getting a good support system, including legal guidance, in place.

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Which assets can someone protect as separate property during divorce?

Fri, 15 Sep 2023 12:23:46 GMT

After years of sharing everything, spouses considering divorce will need to separate their finances. If the matter goes to court, then a judge will interpret Indiana’s equitable distribution statute to decide on a fair way to split the couple’s marital assets between the two spouses.

It can be nearly impossible to predict what will happen during contested property division proceedings because much is left to the discretion of the judge. One of the only ways to protect specific resources from division during contested divorce proceedings in Indiana involves proving to the courts that those assets are separate property that are not subject to division.

What might constitute separate property during an Indiana divorce?

There is a general assumption that whatever people earn or acquire while married belongs both to them and their spouse. Only couples that have already negotiated a marital agreement can avoid are requirements to divide whatever they earn or purchase during the marriage.

Assets owned prior to marriage are not necessarily separate property under Indiana law. They are still potentially subject to division. Any gifts and inherited assets will receive separate consideration from the rest of the marital estate. Any commingling, such as depositing inherited funds into a joint account, would put those assets at risk of division. So would the use of marital assets to maintain or develop inherited resources. Those who hope to retain some of their belongings as separate property typically need to have very thorough financial records to achieve that goal. Judges will divide most declared property according to what they believe would be fair based on the couple’s circumstances.

Agreeing to specific terms can protect assets too

Litigated divorce is not the only option available to those who want to end a marriage. It is possible to divorce through mutual consent in an uncontested divorce filing. People can potentially negotiate with a spouse and set any terms that they believe would be reasonable and fair for the division of their assets.

Without an agreement or financial records helping to set aside certain assets, individuals will largely depend on a judge’s decisions about what will happen to their property when they divorce if they cannot reach a mutually-agreeable property division settlement with their spouse outside of court. With that said, seeking legal guidance can help someone to craft the strongest possible arguments in their favor that are most likely to sway a judge’s decision accordingly.

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How do money woes lead to divorce?

Mon, 07 Aug 2023 12:25:12 GMT

A lot of couples experience financial woes at some point in their marriages, and that can lead to stress and strain on the relationship. “Money issues” are the second leading cause of divorce nationwide, with only infidelity being cited more often.

However, it’s not the lack of money that necessarily causes the most marital strife. Instead, it’s the problems couples have openly discussing their finances and working out any differences in their approach to money. Here are some of the top causes of conflict:

Different values and goals

Divergent values and goals when it comes to money can be a huge source of trouble. When partners have different approaches to spending, saving, investing and financial planning, it can lead to constant disagreements.

For example, one spouse might be a “spender,” while the other is a “saver.” One might prioritize short-term pleasures, while the other focuses on long-term security. This misalignment can create resentment that ultimately piles up and breaks the couple apart.

Income disparities

Even when there’s plenty of money to go around, money can still cause problems – especially if it creates a power imbalance when one spouse earns all or most of the household income.

The partner who earns less may feel inadequate (or controlled, if they have to check all their expenditures with their spouse), while the partner who earns more may feel overburdened with the financial responsibilities or “stuck” in a high-intensity profession that saps them of their energy and time because they’re the family’s main source of support.

Secret spending

According to one banking survey, around 32% of people in the United States are hiding a money secret from their spouse or partner – and that doesn’t bode well for their marriages.

Sure, when a spouse secretly runs up a bunch of credit cards on foolish expenditures or quietly empties the savings account on a get-rich-quick scheme, that’s going to create problems – but the betrayal is often harder to handle than the actual financial loss. Once trust is lost in a relationship, it’s very hard to regain.

Sometimes, sitting down with your spouse and having some frank discussions about the money issues that are eroding your relationship can provoke positive change and save the marriage. Other times, it just makes it clear that you’re financially incompatible and the marriage was destined to fail from the start.