Divorce

No-fault divorce

Neither spouse has to prove that the other did anything wrong

All states have no-fault divorce options but grounds may vary (incompatibility, irreconcilable differences)

Fault-based divorce

Courts will grant fault-based divorce request if the state allows it and at least one spouse alleges and proves bad behavior that ended the marriage

Common grounds include physical/emotional cruelty, adultery, abandonment

Reasons for choosing fault-based divorce:

Not wanting to wait out required period of separation required for no-fault, and in some cases the spouse who can prove fault receives more alimony

Marital vs separate property

Marital property is assets acquired during marriage regardless of who owns them or who’s name is on the title

Separate property is assets owned before the marriage or acquired through inheritance or gift

Property can be separate, but increase in value/money can be marital

Equitable distribution

Property is divided fairly but not necessarily equally, the goal is to ensure a foundation of financial well-being for each spouse

Asset distribution factors

Length of marriage

Contribution to assets

Income and earning capacity

Separate property

Standard of living

Prenups

Age and health

Liabilities and debts, tax implications

Alimony vs spousal support

Alimony is money received after the divorce

Spousal support is money received while separated but still married - to help spouse stay afloat/pay for legal fees during divorce

Factors to determine if alimony is necessary

Relative earnings/earning capacities, relative education

Sources of income (retirement, insurance, etc)

Ages and physical/mental/emotional conditions of parties

Expectancies/inheritances

Duration of marriage

Contribution of one party to earning capacity/education of the other or contribution as a homemaker

Standard of living

Relative assets/property/liabilities

Types of alimony

Permanent - usually for long term marriages (15+ yrs)

Temporary - paid during divorce proceedings to lower-earning spouse

Lump sum - single cash payment or installments

Rehabilitative - helps one spouse become financially independent via education, training, or work experience

Reimbursement - compensates supporting spouse for their investment in other spouse’s future

What if you don’t pay spousal support/alimony?

Can be held in contempt of court - if sent to jail, purge amount is set

Writ of execution - court order allows debtor’s property to be seized to pay alimony

Income withholding - order that requires the debtor’s employer to withhold a portion of their income and send it to the other spouse

Reasons alimony can be terminated/changed

Receiving party cohabitates/remarries

Paying spouse retires/is fired

Domestic violence

Death of either

Court order/contract duration concludes