How Will a Divorce Affect Me Financially?
Issues to Consider
There are many financial issues to consider when involved in an Action for Divorce, and there are many legal steps available to protect your assets and financial future. It is in your best interests to consult with an attorney who can guide you through this process.
ASSETS AND LIABILITIES:
New York State is an “equitable distribution” state. Assets and liabilities are not necessarily divided equally upon a divorce, but rather the court considers certain statutory factors regarding the marriage and finances to determine an equitable and fair outcome. With some statutory exceptions, marital assets and liabilities are those acquired during the marriage. Assets owned by one spouse before the marriage, or received by inheritance, or which he or she has acquired by gift from someone other than the other spouse, are the recipient’s separate property and not subject to equitable distribution. Because there are statutory and case law exceptions to these general rules, the assistance of an attorney is essential.
All assets must be identified and, unless the spouses agree as to values, be evaluated. This includes real estate, retirement accounts, businesses, investments, bank accounts, vehicles, furnishings, jewelry, antiques, securities, stock options, accounts receivable, and all other assets within the marriage.
The nature of all liabilities must be determined, and the balances of same must be quantified. This includes mortgages, home equity loans, credit cards, personal loans, student loans and all other liabilities within the marriage.
Often, other professionals, such as forensic accountants and business evaluators, must be retained to assist in these calculations.
Your divorce attorney will have recommendations to competent professionals.
The issue of maintenance payments, sometimes referred to as spousal support, is governed by a statutory mathematical formula. The amount to be paid is determined by consideration of many factors, most notably the income of each party. Maintenance payments may be paid while the Action for Divorce is pending and/or post-divorce. Payments may be ordered to be paid temporarily, that is, until the completion of the Action for Divorce or the passage of a designated period of time, or indefinitely, that is, until the death of either party or the recipient’s remarriage.
The duration of post-divorce maintenance payments is within the discretion of the Court to decide, but there is an advisory schedule keyed to the length of the marriage. In a marriage of up to 15 years’ duration, the percent of the length of the marriage for which maintenance payments shall be payable is 15% to 30%; for a marriage of more than 15 years, and up to and including 20 years – 30% to 40%; and for a marriage of more than 20 years – 35% to 50%.
Maintenance payments are not subject to federal income tax for the recipient, although New York State treats such payments as taxable income.
The calculation of basic child support is also governed by a statutory mathematical formula and is tied to the number of children of the marriage. Each party’s income, less FICA payments, is used in the calculation, up to a statutory “cap” of combined parental income, which changes every two (2) years to reflect cost of living increases. The paying parent will pay a percentage of his or her portion of the combined parental income. The percentages are:
- 17% for one child
- 25% for two children
- 29% for three children
- 31% for four children
- No less than 35% for five or more children.
It is important to know what is, or is not, included in income in determining child support. The Court is also empowered to order child support above the “cap,” in a case that merits such treatment.
Child support payments are not tax deductible by the payor, nor included in the taxable income of the recipient.
In addition to basic child support, each parent is responsible for his or her pro rata share of childcare expenses associated with a spouse’s employment or search for employment, health insurance premiums and uncovered medical expenses for the children, and educational expenses.
A contested Action for Divorce can be more costly than a negotiated settlement. If the spouses cannot resolve their disputes through negotiations with the assistance of their attorneys, a Court will make the decisions after a Trial. The Trial will necessitate much time and preparation to present the strongest possible case to the Court. This litigation process necessarily increases the fees (attorneys and experts) and costs (subpoenas, process servers, etc.) that will be incurred.
A skilled divorce attorney can help you in minimizing your expense, while maximizing your results.
GET ASSISTANCE FROM NEW YORK’S TOP DIVORCE ATTORNEYS
Our team of New York family law attorneys at O’Connell and Aronowitz has helped numerous families navigate the complex waters of divorce throughout the Capital Region and beyond. Whether you are seeking a divorce, spousal or child support, or assistance in enforcing your financial rights after a divorce, we will provide you with the quality representation you need.
To learn more about how we can assist you, contact us today.
More Articles You May Enjoy
How do I file for divorce in New York? To commence an action for divorce […]Read Post
When spouses in New York State get divorced, all marital assets and liabilities are to […]Read Post
How to Find the Best Legal Representation Whether you are a plaintiff or defendant, whenever […]Read Post