The Do-It-Yourself Divorce Trend Continues, with a Record Number of Litigants Handling their Own Divorce Cases during the First Quarter of 2012

The do-it-yourself divorce trend shows no sign of slowing, and that is probably good news for everyone except divorce lawyers. According to statistics released today by online divorce provider DivorceToday.com, during the first quarter of 2012, a record number of Americans filed for divorce without hiring divorce attorneys. The uptick in do-it-yourself divorce filings cuts across all geographic areas and income levels. Online divorce services now play a major role in the divorce process for many divorcing couples.


According to Marc Rapaport, founder and CEO of Empire State Legal Forms, Inc., even high-income Americans are now foregoing lawyers and opting to do it themselves. Rapaport states, "at all income levels, there now appears to be a realization that particularly with the availability of online divorce kits, divorcing couples are capable of resolving their own financial issues, and thus are able to retain control over the process. Middle income divorcing couples cannot afford divorce lawyers, and high-income people don't want to be caught in the downward spiral of out-of-control legal fees and protracted litigation."

According to Rapaport, clients of his company's divorce website, DivorceToday.com, not only save money, but also benefit by staying in control of the divorce process. According to Rapaport, people now realize that "divorce lawyers are, all too often, part of the problem - not the solution." Rapaport states that do-it-yourself divorce is "healthy both financially and emotionally. There is good reason to be wary of divorce lawyers, and the do-it-yourself divorce revolution helps couples take control of their own destinies."

Rapaport observed that the do-it-yourself divorce trend now encompasses far more than simple no-fault dissolution kits, and that there is an increasing level of comfort with do-it-yourself qualified domestic relations orders, which are also known as QDRO forms. A QDRO is a specific form that is required to divide or distribute a retirement asset in the context of a divorce or marital separation. In the past, lawyers would charge thousands of dollars to draft simple QDRO forms. Rapaport's website, http://www.QDROpedia.com, enables users to download QDRO forms for as little as $59.00. QDROpedia.com has qualified domestic relations orders, ready to download and sign, for distributing pension plans, 401k plans, profit sharing plans, and other retirement assets. According to Rapaport, QDROpedia.com is now the fastest growing site operated by Empire State Legal Forms, Inc.

Certainly, the rich and famous will continue to keep divorce lawyers occupied. However, for average Americans, the process of divorce is now a matter of downloading forms from the internet and filing their divorce papers with the court.

Source: http://www.prweb.com/releases/2012/3/prweb9354653.htm

Divorce Done Well.

UGH! Tax time again. Already? I met with my personal accountant the other day. Our yearly gathering- where he feels obligated to ask if I paid my quarterly estimated taxes and I sheepishly admit that, yet again, I did not. I am a very responsible person but just do not give my personal taxes much thought throughout the year. I have this meeting and vow to change and pay my quarterly taxes this year, but then go about my life as usual, until this time next year. Perhaps, you don’t give much thought to taxes either and this has worked as well for you as it has for me.


Well, now you are getting divorced. That changes things and taxes need to be thought about carefully. When you are revamping your financial picture you need to know how taxes will impact your plans. If you plan to split your spouse’s 401K money and you are taking your share as cash in a lump sum distribution you will have to pay taxes (but can avoid the 10% early withdrawal penalty by completing a QDRO). The bottom line number you thought you had in hand to pay for your new expenses is not what you will receive from that 401K. Uncle Sam takes his cut first and then you get the rest. You will lose money to taxes now and the investing and earning power of that money for the future. Would a different strategy make more sense?

There are tax consequences regarding your house. What if you decide that one of you keeps the house for now and will sell in five years, after your youngest graduates from high school? The exclusion for the capital gains tax for a singleton is $250,000 but $500,000 for a married couple. So you may end up “losing” $250,000 of tax-free money depending on the decisions you make. Another example of tax implications is that spousal support (alimony) is tax deductible to the person making the payments and considered as taxable income to the person receiving payment. Child support is not tax deductible for the person paying it and not considered as income for the person receiving it. This information may change how you originally wanted to structure your post-divorce finances.

These are just a few examples to illustrate how important taxes effect what you think you are walking away with and what your bank account will reflect you actually have to live with when divorcing. At Westfield Mediation, LLC, we always encourage our clients to consider the tax implications when making their decisions. We also recommend that clients review their Memorandum of Understanding with their accountant to fully understand their choices and get suggestions on how to save money in taxes if they do things differently. Knowledge is power and we want our clients to make decisions from a position of strength. Once your new life is established you can go back to not worrying about taxes again, until this time each year.

Source: http://thealternativepress.com/articles/tax-time

My 401(k) Proceeds Go To My Ex When I Die

What happens when an ex spouse is still on a person's 401(k) as primary beneficiary? What happens when a baby needs to go to the hospital and the employee didn't inform the company to add the new child as a dependent on their health plan?

DIQuotes, a firm specializing in disability insurance for physicians and dentists, has released a valuable checklist of the most common annual enrollment oversights employees make when renewing their company benefits each year. Such common examples would include forgetting to review who the qualified plan (401k) beneficiary is as well as omitting the addition of a new child or spouse to their health plan.

Many working individuals will start the open enrollment process this fall for company benefits. Taking the necessary time to re-examine the options is critical for ensuring proper protection. Sadly, many employees neglect to sign up for their companies most important benefit - disability insurance.

While the additions of a family member to the health plan seem obvious, the need for participating in the group disability insurance plan often goes overlooked.

“Too often, people simply focus on their health or dental plans and whether or not their new child or spouse is signed on without considering disability insurance,” said Thomas Lloyd, President of DI Quotes, “It tends to be a benefit many consider a luxury rather than a necessity.”

Understanding disability insurance options is a crucial first step to take. Group plans typically cap a maximum monthly benefit to all employees, leaving the executives or owners who make more money at risk for insufficient income protection.

“Executives, Owners, and other key employees with larger salaries and bonuses should strongly consider a supplemental policy on top of their group plan,” says Lloyd. “Not having sufficient income protection by just having group ltd coverage does not solve the problem of income replacement if that person cannot work.”

Taking the time to review all of these company plan options should ensure that a person's company plan benefits are in line with their current life.

SOURCE: http://www.prweb.com/releases/open-enrollment/disability-insurance/prweb8914009.htm

Online Divorce Filing as Sign of Economic Recovery

DivorceToday.com, a national provider of online divorce forms, reports that in 2010, increasing numbers of Americans turned to the Internet to file a divorce. This may be good news for the economy. According to economic experts, during times of acute economic distress, many people are deterred by financial insecurity from filing for divorce, which they delay until they feel more confident. Accordingly, the increase in the number of online divorce filings may actually be good news.

According to data compiled by leading online divorce forms website DivorceToday.com, even though 2010 is not yet over, statistics already show that more Americans are filing for divorce online in 2010 than in 2009. According to DivorceToday.com CEO Marc Rapaport, "Throughout 2010, there has been a noticeable increase in online divorce forms orders. It appears that as people feel more financially secure, they are ready to move on with their lives after failed relationships. We have experienced a substantial increase in the number of orders for do-it-yourself divorce kits and marital separation agreements."

Rapaport noted that the increase in online divorce form orders was attributable to non-economic factors, including the widespread acceptance of online divorce services in uncontested divorce matters. According to Rapaport, "many people now realize that it is simply absurd to pay thousands of dollars in legal fees to lawyers to complete basic divorce documents. A do-it-yourself divorce kit saves both time and money." Rapaport provides a unique perspective regarding the growth of online divorce because in addition to his DivorceToday.com website, he is also a divorce lawyer with a private law practice. Rapaport says that "for individuals with disputed divorce cases, divorce lawyers are essential, but for someone seeking a fast, uncontested or no fault divorce, a do-it-yourself divorce kit is ideal."

Rapaport offers a unique perspective regarding online divorce because Rapaport is also an experienced NY divorce lawyer, with a full service matrimonial law firm, Rapaport Law Firm, PLLC, in Manhattan's Empire State Building. Rapaport observed that when he began DivorceToday.com eleven years ago, the idea of obtaining legal information, forms and assistance via the Internet was a new concept. Over the past decade, the concept of getting a divorce by downloading an online divorce kit, which DivorceToday.com pioneered, has become mainstream. Online divorce services are more convenient, economical and easier for many people than hiring a full service matrimonial law firm.

In addition, during 2010, a number of states made changes to their divorce laws that made it easier to get a divorce. The most dramatic change occurred in New York, which finally passed no fault divorce. Since the New York no fault divorce law went into effect earlier this month, the DivorceToday.com staff have worked overtime to handle the dramatic increase in demand for New York divorce forms. Under the new NY no fault divorce law, individuals no longer face the unpleasant prospect of having to make allegations of fault against their spouses, thus making the process of divorce in New York less acrimonious. DivorceToday.com has risen to the occasion with NY no fault Divorce Kits that are easy to use and are ready for signature and filing with courts in all New York counties.


SOURCE

Books from Amazon:
Before You Throw in the Towel: Twelve Things You Should Consider Before Filing for a Divorce
A Guide to Divorce for Women
File for Divorce

Panama City - Divorce Capital of America

A website survey ranked Panama City number one, in terms of divorce rate in the nation. In fact, the state of Florida pretty much dominates the list, with 11 out of the top 50. But Panama City is the divorce capital of the nation. That's according to a list recently released by the Daily Beast.

"We were interested in where divorce has been the most common this year and we did that two ways. We looked at the percent of population in each city that was divorced currently and the number of divorces that occurred in 2009," said Daily Beast Reporter, Lauren Streib.

The Daily Beast says Panama City leads the nation for the worst divorce rates, with 15.5 percent of the population divorced.

Four Florida cities made the top 10, and 11 made the top 50. Local experts say there may be good reasons for the trend.

"People come to the state of Florida for opportunity, for jobs or to get away from their past life. I have people come in frequently to see me who have moved here and are trying to fix their marriage and they think moving here for some reasons going to help," said Marriage Counselor, Dr. Joel Prather.

But reality is, when people get here, most soon realize they brought their marital problems with them.

"A lot of people come here thinking they're going to get things fixed because they moved to the beaches and it's beautiful and nice and the problems are still there. And one other factor you probably would have to consider in the Panama City Beach area is this is kind of a party place and sometimes partying too much gets in the way of relationships," said Dr. Prather.

Prather adds the economy has a lot to do with it, too.

"Panama City has been hit pretty hard with economic woes and as I said, one of the main reasons people go to get divorced, top two are infidelity and finances," added Dr. Prather.

According to court records, 994 people filed for divorce in Panama City in 2008, another 1066 in 2009.

The Clerk of Courts office has received 898 divorce filings so far this year, including the headline-grabbing case of Tiger and Elin Woods.

Dr. Prather adds Florida’s lenient divorce laws make it one of the easiest state's to receive a divorce. Louisiana has some of the strictest divorce laws.

SOURCE

Driving Factor of Divorce Over Age 50

Lack of love and intimacy in relationships is driving the over-50s to divorce, according to a new survey.

According to the figures, 28 per cent divorced because their partner was emotionally cold and distant, while a quarter cited a loss of interest in sex.

The research also found that 27 per cent said they were no longer committed to their marriage, reports the Daily Mail.

The main reason for men ending their marriage – cited in a third of cases – was a lack of interest in sex, while most women said their husband was ­emotionally cold.

Known as the 'Saga divorce', experts believe many couples who have stayed together for the sake of their children reassess their futures when their offspring fly the nest.

The survey found that money was also one of the reasons given in over-50s divorce cases, with 9 per cent of those quizzed complaining that their partner failed to contribute enough financially to the relationship and 8 per cent saying their other half spent too much money.

Work also caused problems, with 8 per cent blaming a job that made life difficult and 5 per cent unhappy that their partner flirted with friends or colleagues.

The survey was carried out by Saga, which specialises in products for the over-50s.

SOURCE

Divorce Lawyers Report Increased Use of Facebook Profiles As Evidence In Divorce Cases

Social networking sites like Facebook, MySpace and Twitter are meant to serve as online communities where people throughout the country are able to publicly share information about themselves and connect with others. Many people choose to share pictures or comments in their daily activities without ever realizing that any and all information they post on social networking sites can be considered public information and used as evidence against them in a family court. A recent survey of family law attorneys across the country found that 81% of divorce lawyers reported seeing an increase in the use of Facebook and other social networking sites as evidence in divorce cases.

In messy divorces or custody battles, lies, and uncovering lies, become a top priority. Indeed, during family disputes it is not uncommon for parties to dig deep for a little evidence that will show the other party in a bad light. One of the biggest examples involves deadbeat dads. Time and time again, a father will claim not to have enough money to pay child support, but then post to their Facebook profile evidence of a recent vacation or large purchase. This is now prime evidence in divorce cases to be used as completely fair game in a family law trial. Even further, private emails, or emails a sender may think is private, are now fair game in divorce trials as well.

With the advent of the use of social media profiles in divorce and other legal trials, most lawyers are now recommending the removal of any profile public when involved in a legal proceeding. But unfortunately this may not be enough, and a good divorce lawyer can get a subpoena to retrieve the old or deleted profile. More than that, deleting an email will not be enough either, since technology experts are able to uncover emails, whether sent or received, whether deleted or not. Does this mean the loss of privacy in the technology age?

SOURCE

Dirty Husband Gets Woman a Divorce

An Egyptian court granted a woman a divorce because her husband refused to bathe claiming he was allergic to water, she said.

The woman, a petroleum engineer, approached the courts just weeks after her marriage to complain about her husband's odd behavior, the Egyptian daily Al-Masry-Al-Youm said.

The woman told the newspaper she was surprised over her husband's refusal to bathe and said he told her "this is my habit."

The newspaper said the woman sought the advice of a doctor who confirmed the man's allergy, but said the ailment should not stop him from maintaining self-hygiene.

When her husband refused to grant her a divorce, she turned to the court, and was granted a "khoulu," or divorce, the paper said.

New York's New No Fault Divorce Law Takes Effect

Getting divorced in New York state just got a bit easier.

A new no fault divorce law took effect Tuesday in New York, making it possible for couples to end their marriage through stating irrevocable differences rather than having to place blame on one person.

New York was the last state to sign no fault divorce into law.

"Finally, New York has brought its divorce laws into the twenty-first century," Gov. David Paterson said in a statement after the signing the bill into law in August.

In the past, couples would have to go through a one-year separation or prove that one marriage partner was responsible for acts like cruelty, adultery or abandonment.

The law often caused protracted legal battles with both sides trying to place blame on the other and divorce lawyers racking up billable hours.

"A lot of my clients ... want to file tomorrow," divorce lawyer Suzanne Kimberly Bracker told the New York Post Monday. "They've been suffering in dead marriages but never wanted to go through a contested-divorce process."

Critics contend no fault divorce will make it too easy for married couples to call it quits rather than work through difficult issues.

Proponents say it will allow couples keen on getting divorced to focus on more important issues.

"By removing the requirement to prove fault, divorcing couples and the courts will no longer have to waste resources litigating on whether a marriage should end, but will be able to better focus on issues such as the welfare of the children, fair division of marital assets and other economic concerns,” New York State Bar Association President Stephen Younger said in a statement after the bill became law.


SOURCE

Co-Parenting After Divorce

Getting divorced and exploring the realities of co-parenting ahead? This facet of life after divorce can be enormously complex and challenging for several good reasons.

* Both parents are bringing the raw emotions resulting from the divorce into a new stage in their lives
* Mom and Dad are also bringing previous baggage from the marriage – ongoing conflicts, major disputes, differing styles of communication, unresolved issues and continual frustrations -- into the mix as they negotiate a co-parenting plan
* Both parents are vying for the respect and love of the children – and are easily tempted to slant their parenting decisions in the direction that wins them popularity with the kids
* Anger and resentment resulting from the divorce settlement can impact and influence levels of cooperation in the years to come
* Parents may disagree about major issues ahead that weren’t part of the parenting dynamic in the past including: visits and sleepovers with friends, scheduling after-school activities, handling curfews, new behavior problems, consequences for smoking, drinking and drug use, dating parameters, using the car and scheduling vacation time.
* Parents may not share values and visions for the children as they grow and may also not agree on the plan of action required to honor those values.

When these types of differences appear parents might find themselves struggling to find ways of coping. Agreement on how to co-parent effectively in the present and the future is not a one-time discussion. It takes on-going communication, both verbal and written as well as regular meetings via phone or in person. And it takes a commitment to make co-parenting work – because you both want it to.

The consequences, when it doesn’t work, can be considerable. Your children are very likely to exploit any lack of parental agreement or unity, pitting Mom and Dad against one another while they eagerly take advantage of the situation. This is a danger sign that can result in major family turmoil fueled by behavior problems that neither parent can handle.

When Mom and Dad are on the same page, so to speak, they can parent as a team regardless of how far apart they live. These parents agree about behavioral rules, consequences, schedules and shared intentions regarding their children. They discuss areas of disagreement and find solutions they can both live with – or agree to disagree and not make those differences an area of contention.

If curfew in Mom’s house is 9:00 pm and it’s 10:00 pm in Dad’s house, that can still work if both parents respect the differences and let the children know it’s all okay. When differing curfews becomes an area of major contention, that’s when the kids can get hurt – caught between battling parental egos. Children are confused and often feel guilty in battling parent situations which rarely lead to any good within the family structure.

Keep in mind that when you’re more open and receptive to your co-parent, you are more likely to get what you really want in the end. Good listening skills, flexibility and the commitment to do what’s best on behalf of your children are part of a smart co-parenting mindset. Remember that co-parenting will be a life-long process for the two of you. Why not do it in a way that will garner your children’s respect and appreciation? They will thank you when they are grown adults.

SOURCE

No Fault Divorce

The wedding day is supposed to be the start of years of marital bliss. Unfortunately for many couples, what starts out as a happy union ends up in divorce court.

New York was the last state without a 'no-fault' divorce law. Couples had to claim cruelty, abandonment, or adultery in order to split up. According to attorney Patrick C. O'Reilly at Lipsitz Green Scime Cambria LLP in Buffalo, those limited options led many couples to use extortion type techniques - such as refusing to agree to divorce terms unless they were paid more.

For poor spouses, lack of financial resources made the prospect of leaving an unhappy marriage impossible.

That's why New York State made changes to the domestic relations law. Unhappy couples can now apply for a 'no-fault' divorce. "If you can state under oath that your marriage is irretrievably broken down - in effect it is a dead marriage for the past 6 months - you are entitled to a divorce", says O'Reilly.

The law took effect on October 12th.

Over seventeen -hundred people filed for divorce in Erie County this year. Now with the new changes, court officials are bracing for a flood of divorce applications. "I'm still waiting to see if the tsunami is going to come. If we are like other states, they predict we might see a double digit increase in filings", says Supervising Matrimonial Judge Janice Rosa from the 8th Judicial District.

According to Judge Rosa, the new law also provides protection for "non-money" spouses. The state legislature added these safeguards after women's groups complained that poor women would be unfairly hurt in 'no-fault' divorce cases.

"The other two changes involve orders to provide counsel fees to even the playing field in a divorce action and to provide guidelines for temporary maintenance during the court action", says Judge Rosa

Critics of 'no-fault' divorce claim that the law makes it too easy for a couple to split up. However, court officials say change was long overdue.

"I think it will make it much cheaper and much faster", says attorney Patrick O'Reilly.

"It should take us immediately to the important issues of parenting and the division of assets and support", says Supervising Matrimonial Judge Janice Rosa.

SOURCE

Divorce Insurance, Co-Habiting, Delaying Marriage On Rise

Money can't buy love, but our worries about having enough in the bank might be affecting the way we approach it.

More couples tying the knot are taking precautions to protect themselves financially. A September survey by the American Academy of Matrimonial Lawyers found that 73 percent of divorce lawyers reported seeing an increase in demand for prenuptial agreements over the past five years.

Watch Divorce Insurance Segment on Newsy.com

"I have to believe that the recession has had an effect in that people's finances have been diminished," says Marlene Eskind Moses, president of the association and a Nashville lawyer who's been practicing family law for 30 years. "What they have takes on greater importance."

Moses says she's seen a big rise in requests for prenups among middle-class couples, not just those with substantial assets. Some people want to shield themselves from taking on a spouse's debt; others want to ensure that a pension plan remains in their name only.

Prenups may be growing more popular, but Moses says the conversations surrounding them are as touchy as ever. "It feels like you're trying to take away something from somebody, or you think the marriage is already gonna fall apart," she says, adding that she encourages her clients to think of it as "an estate planning opportunity."

John Logan thinks people should do even more to limit the financial havoc that can be wreaked by a marriage failure. Logan, a 54-year-old entrepreneur from North Carolina, is the creator of WedLock Divorce Insurance.

In 2001 Logan went through what he describes as a "world-class nasty divorce." "My friends called it 'The War of the Logans,' " he adds.

Adding up his lawyer fees and looking over his bank statements, Logan began to wonder: "Why can't you protect yourself from this?" Divorce insurance makes sense from a consumer standpoint, he says, because you're more likely to go through a marital breakup than experience, say, a massive house fire.

Logan teamed up with Prime Insurance Co. to begin selling divorce insurance last month. So far, he says, they've signed up "a handful" of policy owners. It works like life insurance in that customers choose how large a policy they want and pay every month based on that amount. (A calculator on the WedLock Web site can come up with a personalized estimate on the cost of a potential divorce, including expenses like moving, child care, counseling and furnishing a new household. The policies purchased so far, he says, range from $99 to $1,073 per month.)

Customers must be policyholders for at least 36 months before submitting a claim (evidence of divorce) to ensure that people don't enroll with WedLock knowing they're on the fast track to splitsville.

Logan says his company is "not promoting divorce." He hopes eventually to offer a benefit payout to those couples who make it to their 25th anniversary. "We would much rather pay out the claim to people who have a successful marriage," he says.

Logan, incidentally, is engaged to be remarried. Though he believes this one will last, he did become a WedLock customer. Logan says he and his fiancee bought policies for each other.

Divorce isn't a big concern, however, for the growing number of Americans putting off marriage altogether. In 2000, 34.5 percent of 25-to-34-year-olds had never married; by 2009, that number jumped to 46.3 percent, according to a recent Census report.

Sociologists and marriage advocates point out that married people fare better economically than their single counterparts; however, that message may not be convincing to couples facing the steep costs of elaborate weddings in a time of economic turmoil.

Although marriage rates have dropped, more people are choosing to live together. Census takers found that the number of unmarried couples who shared a home rose 13 percent in the past year alone. And that, Moses says, explains the emergence and growing popularity of what she calls a "cohabitation agreement." These legally binding documents can cover everything from real estate agreements to "who takes out the garbage to the frequency of sex or not gaining weight."

And that seems perfect for a time when "for richer or poorer" seems too much to promise.

SOURCE

Spousal Support (Alimony) and Divorce

Spousal Support (Alimony) in a Divorce Spousal support, as it is now commonly called, used to be known as "alimony." Spousal support is not mandatory in most states but can be ordered by a judge under certain circumstances. If a spouse will face hardships without financial support, spousal support should be considered. The deciding factor for spousal support is the need to maintain the spouse at his or her customary standard of living. In other words, the law recognizes a husband or wife should not be forced to live at a level below that enjoyed during the marriage.

However, other factors also need to be considered. For example, spousal support should most likely not be considered if:

• The marriage was for a short duration (less than two or three years), and
  Both spouses are employed and self-sufficient.
  
• This does not mean the parties cannot agree on spousal support. Spousal support has variable timeframes. It can be (1) for an unlimited period, (2) subject to the death or remarriage of the recipient spouse, or (3) fixed to end on a specific date.
  

Child support payments do take priority over spousal support. There is no firm dollar figure for spousal support. The amount should be decided by both parties. Some common ways of calculating spousal support are to take up to 40% of the paying spouse's net income (post-child support), less 50% of the amount of the supported spouse's net income (if he or she is working).
Spousal support can be waived by the recipient spouse. However, the waiver should be in writing and signed by both spouses.

For information regarding calculating income taxes and possible tax deductions from alimony payments - visit http://www.irs.gov/ for more information.

Divorce and Your Finances

Keeping an eye on your financial health during a divorce is essential. This report outlines the rules that may apply and offers tips on some traps to avoid.

Divorce and Your Finances
Divorce can be a complicated and challenging process in which details are easily overlooked. Protecting your financial health during this time is crucial, and no one should enter this process without a trusted attorney (specializing in divorce) on his or her side. Equally important is knowing the laws that shape divorce proceedings, and the impact they can have on your assets.

Dividing the Assets
Typically, everything you and your spouse acquired from the day you were married is subject to division. The exceptions are individual inheritances, gifts to an individual spouse, and assets acquired before marriage. When assets are divided, the court considers each spouse's earning ability, the length of the marriage, and how much each spouse contributed to building household assets.

The exception to this are the nine "community property" states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Under the laws of these states, almost all assets will automatically be divided equally.

Don't try to hide assets from the court, either by neglecting to mention them or transferring them after the proceedings have begun. This can trigger an "omitted asset" penalty and force the court to redivide your property.

Dealing With Debt

Don't assume that a divorce will erase any debt. If you live in a community property state, debt -- like your assets -- will be split down the middle. You will be responsible for half of all debt in jointly held accounts and, in some cases, for half of a spouse's individual debt as well.

If you don't live in a community property state, you remain responsible for your individual debt (but not your spouse's) and any debt in jointly held accounts. One important trap to avoid is maintaining joint accounts after the divorce. Your spouse could continue running up expenses and leave you with the debt. As soon as the divorce is finalized, freeze all joint accounts and have your creditors reclassify them as individual accounts. Most creditors will do this at your request, though they are not legally required to do so. To protect your credit rating, make sure to keep up with monthly payments.

In addition, include the payment of debt as part of the settlement. Take on the responsibility for the debt yourself, if necessary, and take a share of the assets to pay the debt down.

If you and your spouse own a home that has appreciated in value, you may want to sell it before the divorce is finalized. Federal tax rules offer an exclusion of up to $500,000 in realized capital gains for married taxpayers. This amount is cut in half for single filers. Be sure to consult a tax advisor for additional information about these rules.

Tax Relief for Innocent Spouses

Divorce will not protect you from the IRS. If you filed jointly with your spouse, you can be held liable for delinquent taxes.

In 1998, Congress enacted legislation that offers protection to spouses who filed joint returns, relieving them of paying taxes that are the responsibility of an ex-spouse. The law also allows an innocent spouse to limit tax liability if he or she has been living apart from the delinquent spouse for at least 12 months from the time the joint return was filed. Talk to a tax advisor about how this information relates to your own situation.

Your Retirement Assets

Money in your 401(k) or pension plan may legally be divided during a divorce. The divisible amount typically begins to accumulate on the day you are married and ends on the day you are divorced.

To claim a share of a spouse's 401(k) or pension plan benefit, you need to obtain a court order called a Qualified Domestic Relations Order (QDRO) and provide it to your spouse's plan sponsor before distributions are completed to your spouse, which prevents your spouse from making withdrawals.

You and your spouse can decide to not divide your 401(k) assets or pension plan benefits, but you should make this agreement in writing and include it as part of the settlement to prevent the courts from declaring the money divisible.

If there are outstanding loans against a 401(k) and only one spouse was able to contribute, the noncontributing spouse may be exempt from paying back the loan. However, if the purpose of the loan was something that benefited both spouses -- such as a home -- the noncontributing spouse's share of the assets may be reduced to facilitate repayment of the debt.

If you do receive a share of a spouse's 401(k) assets or pension plan benefit, it may be best to roll over your share immediately into an individual retirement account (IRA) to avoid taxes and maintain tax deferral. You should discuss this with your attorney or a financial advisor familiar with divorce proceedings as soon as you anticipate a divorce.

Estate Planning

Be sure to review your will or, if you don't have one, draw one up. You should consult an attorney familiar with your state's estate laws to ensure that your assets are properly distributed. Do not wait until the divorce is final. You should review and amend your estate plan at the same time you decide to commence a divorce proceeding. Also make sure to review beneficiary designations for pensions, 401(k)s, and life insurance policies. Federal law requires a spouse to be the sole beneficiary of pension or 401(k) benefits unless that right is waived in writing by the spouse.

If you find yourself faced with divorce, it is essential to protect your financial future. Enlisting the help of an attorney and carefully monitoring the process can ensure that your interests are considered and that you won't need to revisit the proceeding later on.

Next Time, Should You Have a Prenup?

A prenuptial agreement can be a valuable tool for protecting your finances. These documents are difficult to contest in the event of a divorce. The prenup should be drawn up by both you and your spouse with the assistance of attorneys, and should include:

Current assets and debts
Financial arrangements (such as alimony payments)
Estate and inheritance plans
Financial care and custody of children from previous marriages
How assets will be divided in case of a divorce
Finally, include in your prenup a future date to review this document. Should circumstances change, you can then amend the agreement.

Divorce and The Economy

Here's another thing the economy has affected...and something I didn't think of right off...

The recession and economic turmoil is creating a new class of casualties: Married couples who can't afford to get divorced. In these tough times many people are finding it's cheaper to stay together, even when they can't stand each other.

Middle-income brackets are most affected by the changes in the economy and a major factor in divorce is that divorcing couples have to establish two separate households with current funds -- a prohibitive factor when you're looking at divorce in tough economic times.

So, I guess the new catch phrase should be: Till death or the end of a recession...do we part.