Divorce is a legal separation process. A divorce does not blame, punish, or exonerate. New York and New Jersey are “no-fault,” equitable states for divorce. You do not need to prove a particular reason for the dissolution of marriage. All debts and assets are to be divided in a manner that is most fair to all sides– which is not necessarily a 50/50 split.
Due to the complexity of issues like alimony, child custody and support, equitable division of assets, taxes, insurance, and retirement benefits, most people elect to hire an experienced divorce lawyer to represent their interests in court and ensure favorable terms.
Alimony is awarded when a spouse cannot meet their basic living expenses without financial assistance from a partner. This sum of money is most commonly paid monthly but can also be given in a lump sum. Financial issues that determine the amount of alimony include the standard of living during the marriage, duration of the marriage, employment status, vocational skills, age, health, and financial resources of both parties.
Alimony is highly subjective, but a common guideline is that every three years of marriage equates with roughly one year of alimony– or about a third of the length of the marriage. The payments can be terminated once the receiving spouse begins cohabitating with another person or remarries.
In 2020, up to $184,000 worth of income will be considered for alimony payments. Different calculations can be used. One method involves taking 20% of the payor’s annual net income, subtracting 25%, and dividing by 12 to determine the monthly payments. Another approach takes 40% of the combined annual net income of both spouses, subtracts the annual net income of the payee, and divides by 12.
A determination must be made as to who will have legal custody of the children.
The following factors enter into play in determining a child’s best interests:
- How much was parental responsibility shouldered before the divorce or outsourced to a caretaker?
- How long has the child lived in a stable environment, and how much change would become necessary?
- Is the parent requesting custody of sound mental and physical health?
- If the child is mature enough to state an opinion, where do they prefer to live?
- Can both parents stay informed of the child’s friends, school progress, health, and daily activities?
- Will the parent provide a consistent routine for homework, meals, bedtime, and discipline?
- Which parent is most able to be actively involved in the child’s school and extracurriculars?
- Are the parents able to maintain a living environment free from substance abuse?
- Is there a history of violence, abuse, or neglect with either parent?
- Are both parents willing to cooperate and encourage the child’s relationship with the former spouse?
Legal custody is another matter to consider– who will have the child most of the time and retain primary decision-making power? Visitation rights must also be decided. There are many different arrangements– alternating every week or two, three days with one parent and four with the other, or weekdays with one parent and weekends with the other, for instance. Holidays can be a particularly difficult matter to decide without a mediator, such as a skilled divorce attorney.
The financial future of minor children must be considered when making a split. Child support typically covers fixed costs like shelter, variable costs like transportation and food, and controlled costs like clothing, entertainment, and other miscellaneous expenses. Health insurance, special needs, and visitation transportation expenses are often added.
The cost of private education, extracurricular activities, college tuition, and birthday parties are not typically included but can be negotiated separately.
In New York, child support is based upon a fixed percentage of parental income; the percentage paid depends upon how many children there are – 17% for one, 25% for two, 29% for three, 31% for four, and at least 35% for five or more. These percentages apply up to $154,000 worth of income.
New Jersey’s child support calculations are somewhat more complicated, based on gross taxable income, adjusted gross income, net taxable income, health care paid, parenting time expenses, and share of overnights.
Assets and debts acquired since the date of marriage must be equitably divided. While the system is fairly flexible, disputes may arise regarding valuation or who gets what. Property is not always split 50/50.
- The marriage duration
- Which spouse has primary custody
- Present and future financial wellbeing and needs of each spouse
- Amount of marital property contributed by each spouse
- Non-monetary contributions to the family such as child-rearing or home maintenance
- Age, health, and special needs of each spouse
- Alimony and child support obligations
- Total value of each spouse’s separate property
- Adverse actions by each spouse like gambling debts or extramarital affair expenses
As you move to begin your separate lives, insurance considerations must be addressed for:
- Cars – Notify your insurer of ownership or designated driver changes; move from a joint to separate policies if necessary; update contact information; decide who will cover the children.
- Homeowners or Renters – Keep your insurer informed of a change in possessions.
- Disability – Alimony and support payments may be at risk if the payee becomes disabled and can no longer work; consider a disability insurance policy.
- Life – Change your beneficiary unless there are children involved; consider term life insurance – at least until they are no longer minors.
Retirement savings is considered a marital asset. Spouses are generally entitled to half the other’s retirement – which can be used for a down payment on a house, relocation expenses, or future retirement. However, a 10% early withdrawal penalty can be assessed if you’re under age 59.5, so you’ll need to consider IRS regulations.
These are some of the most common questions:
- Who will receive child dependent tax exemptions?
- Who claims head of household status?
- Which attorney fees are tax-deductible?
- Are maintenance and support payments tax-deductible?
- Should taxes be filed single or joint in the year of the divorce?
Tax liability is often overlooked in a divorce but could end up costing thousands of dollars.
Contact us today for a private consultation
If you have any questions in Bergen County, NJ or Rockland County, NY, contact our team of divorce lawyers at Kantrowitz, Goldhaimer & Graifman PC. We’ve helped families sort out complex legal issues for more than four decades.