about_divorce

If your spouse has indicated that a divorce is imminent or if you want to divorce your
spouse, the most important thing you can do is to consult with and retain an
experienced matrimonial law attorney as soon as possible. Our law firm serves clients
in Northeastern Ohio who need a trusted advocate in their divorce or family relations
law action.

Whether your marriage lasted a few years or for decades, you owe it to yourself to get
highly experienced professional advice about your particular case. Trying to avoid
accruing legal fees in a divorce case will almost always wind up costing you more
money in the long run. Clients must be prepared to address serious monetary
obligations and assemble a disclosure of financial, real estate, personal property and
retirement based assets with the assistance of our law firm.

A person should never make an agreement or attend a court hearing without the
assistance of an experienced divorce lawyer. Once a ruling is issued or court papers
are signed it can be very difficult to get the orders changed even if they are not fair to
one party or if the court made a mistake or did not have sufficient information to make
a good decision. Divorce is an important and complex process and irreparable damage
to your case can be created by improper legal actions being taken or ignored. Trust
your future and that of your children to the highly experienced and qualified
representation offered by Attorney Joseph W. Gardner.

Financial Considerations in a Divorce

When significant assets are involved in the divorce process, our law firm can help you
minimize the impact on your financial situation. Here is an overview of some important
financial topics for people who are going through divorce.

Financial Misconduct

Assets which were accumulated during a marriage are generally divided equally
between the parties unless the court determines that an unequal division of the assets is
fair. One circumstance where the court will often award an unequal division of assets
is where the court finds one of the parties guilty of financial misconduct. This would
include, for example, situations where a husband or wife used a credit card for
gambling debts, spent marital funds on gifts or travel expenses for a paramour, or
wasted financial assets of the marriage without the knowledge of the other party. If
financial misconduct is shown, the court could compensate the spouse who was
injured by the financial misconduct by awarding that spouse a larger portion of the
marital estate than they would otherwise be entitled to receive.

Spousal Support

When the court awards spousal support (also called “alimony”), the spousal support
generally must be included as taxable income to the party who receives it, and it usually
is tax deductible by the party who pays it. People who pay and receive spousal support
are frequently in a relatively high tax bracket. For this reason, the tax consequences of
a spousal support award should always be taken into consideration when negotiating a
spousal support case or presenting the case to the court.

Tax Consequences of Custody

Another important tax factor to be considered in a divorce with minor children is the
allocation of the tax dependency exemption and the child tax credit. The exemption and
the credit can be worth two thousand dollars per year or more, depending on the
number of children involved. At certain income levels, claiming more than one child
may not increase the tax refund of the lesser earning parent, whereas the party with
greater income could save thousands of dollars each year if the tax dependency
exemptions are properly allocated. For this reason, allocation of the tax dependency
exemptions is a very important part of every divorce with minor children.

Financial Planning for Divorce

People who are expecting to retire engage in financial planning for retirement. People
who want to maximize the value of their estate in the event of their death engage in
estate planning. People who want to pay the least amount of taxes possible engage in
tax planning. Unfortunately, there are also times when a person realizes that a marriage
is coming to an end. In some cases, the financial outcome of a divorce can be shaped
ahead of time through careful divorce planning. Our law firm advises people who want
to act now to shape the financial outcome of their future divorce.

A divorce or dissolution involves a division of the marital estate. The marital estate, as
a general rule, includes all assets that were accumulated during the marriage. Assets
that were owned by the parties prior to the marriage are considered non-marital or
“separate property.” These assets are generally awarded to the party who brought the
asset into the marriage, provided that party can “trace” the existence of the asset back
to its original source. Asset tracing can best be accomplished by the use of financial
records.

Financial records, original documents such as promissory notes and deeds, telephone
records, medical records, bank records, and tax records contain very important
information in a divorce case. Although during the pendency of a divorce case it is
sometimes possible to obtain copies of these records from the original source, this can
be costly and time consuming. Depending on the age of the records, it may not even
be possible to obtain these documents from banks, financial institutions or other original
sources because some of these records are only required to be maintained for a certain
number of years by the financial institution. It is therefore very important for someone
who is in a potential divorce situation to copy and safeguard these records for use by
the attorney in the divorce. Depending on the nature of the case, it may be impossible
to obtain a fair property settlement or do a separate property tracking without certain
financial records.

Expected inheritances, trusts or gifts from a relative should also be carefully considered
if one of the parties is considering filing for divorce. If the funds are transferred to
both the husband and the wife instead of just one of the parties, all of the funds may be
included in the marital estate, subject to equal division. With proper divorce planning,
the assets can be appropriately transferred to clearly indicate the intent of the testator or
donor, so that the assets are not included in the marital estate.

Decisions such as whether to buy or lease a motor vehicle, or how much to invest in a
401(K) Plan can also have important ramifications in a divorce situation. College
financial planning for minor children and management of debt should also be considered
in light of a possible future divorce if a divorce is likely. Every case is different, but
sometimes financial decisions — such as refinancing with a home equity loan or the
filing of a personal bankruptcy — can have serious ramifications if one of the parties
later files for divorce.