Seven Deadly Mistakes in Divorce!!
(and How to Avoid Them)
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These 7 Mistakes may sound outrageous, ridiculous, or just plain common sense, but people make them all the time and they do it because they are angry. If you are angry and can’t live with your spouse anymore, before things escalate and really get out of hand, go to mediation, get a Settlement Agreement and when you are ready, begin the divorce process.
- Not Getting a Settlement Agreement Before Splitting Up
Before you do anything about your marital situation, meet with your divorce mediator and get a Settlement Agreement. The Settlement Agreement clearly defines how you divided your assets and debts and how you’ve addressed child support, the parenting plan and alimony. It really ties everything up in a neat package. It stops the financial clock from ticking, protects you, and gives you certainty as to what is going to happen financially. A Settlement Agreement defines the way you divide your assets and your responsibilities for repayment of debt.
I see many couples that legally are still married, but physically separated. While they have lived separately for many years, they now have decided to write a formal Settlement Agreement. This necessitates a discussion of what is the marital interest in each other’s assets. They haven’t lived together for so long that we may have to establish a different date for valuation instead of the signing of the Agreement.
One couple hadn’t lived together in ten years and assumed, although they had nothing in writing, that they were legally separated because of the amount of time that had gone by. Unfortunately, this was not true. In the meantime, they had each purchased their own homes and contributed to their pension plans. They had entered into other relationships and were currently living with the new partners. To make matters worse, they also were co-mingling their earnings with their new partners.
In addition to all that, one of the parents hadn’t made child support payments to the other parent in at least six years and they wanted to make a settlement. It made things a lot more difficult to fix dates of valuation and to compute back payments of support because of the amount of time that had gone by.
It turned into an accounting nightmare, the end result of which was that one of them had to take out an equity loan because the amount of child support arrears and the equitable distribution from the time of separation was way more money than what they had envisioned. Had they gotten a Settlement Agreement when they split up or shortly after separating, they could have separated with a peaceful agreement that would have settled everything.
- Trying to decide the settlement by yourself.
Sometimes divorcing couples think that they can save time and money by deciding how they are going to divide their assets before they come to their first mediation session. At the first session meeting, I give couples an explanation on how they might divide assets based on:
- How long they have been married
- What is marital property
- What is separate property
- Their present and future earning capacities
- Education and current job skills
- How to divide retirement plans and pensions
- The age and health of the husband and wife
Sometimes, couples come in with spreadsheets explaining their plan for dividing the marital assets, but once I explain how to go about constructing an equitable settlement based on “the factors” a court uses, it often changes what they had tentatively agreed to.
When people decide their settlement before the mediation session, it is human nature to be locked into those decisions, which makes it very difficult to undo or backtrack. Though the intention was to save time and money, it usually ends up taking more time and costing more money because now what they’ve agreed to has to be undone and reconstructed.
I had a client who was a physician who went to the Internet and for $199 downloaded a form to do his own Divorce Agreement. Upon completing the Agreement form, he went to the court house in Westchester County and handed the agreement to the court clerk. The clerk looked it over and started laughing. She asked the doctor “If you need medical attention, would you go to a plumber?” and the doctor responded “Of course not. I would go to a physician.” The clerk said, “Well, when you want a divorce agreement prepared, you shouldn’t go to a doctor. You should have someone prepare your divorce agreement who actually knows what they are doing, and that’s not you.”
The $199 Divorce form was missing most of the statutory language, health insurance acknowledgement, and child support calculations with the necessary language and updates to the law. You call a plumber when your pipes are leaking; a doctor when you are sick, and an experienced Divorce Mediator when you want your Agreement prepared properly and accepted by the court.*
*While some mediators might prepare their own Settlement Agreements, I always use attorneys admitted to the Bar in New York to write my Agreements.
- Starting to mix and match new assets before you have a Settlement Agreement.
This can be a problem because the proceeds from the prior sale(s) must be accounted for. How much was put into your separate properties and how was it divided? Was there a rollover from a previous sale that would result in a tax liability? Once you understand how the financial settlement figures are derived, you may realize you made a mistake on the division of the money or didn’t factor in the tax issue(s).
Based on my experience, the best thing to do is to wait until you get a Settlement Agreement in writing so that you won’t have to spend time and money fixing mistakes.
- Continuing to Live together until the house is sold.
If you have read any of my blogs about the difficulties that can arise when a couple that is ready to be divorced continues to live together until the house is sold, (Home Sweet Home – Move Out!!, Home Sweet Home Part II) you know that my experience has shown that this is not a formula for success. You do not have to wait to sell the house to begin mediation. Often, one of you is going to move out before the house is sold, and in the current market, it might take a year or more to sell the house.
Get the Settlement Agreement first and I will work with you in putting together a plan in your Agreement that addresses how you will go about selling the house, what’s going to happen to the money and who is going to be responsible for paying the bills.
A husband and wife called me initially to say they wanted to come to mediation but wanted to sell their house first. They were under the impression that they had to sell the house and decide everything before coming to mediation. The house had been on the market for a year and the situation at home was getting really bad. They were sleeping in separate bedrooms. They were no longer having meals together as a family and although they were living in the same house, they were barely speaking to each other. They would pass one another in the house and look the other way.
When they came to mediation, I asked the ordinary questions that I ask: How are things at home, are you having problems living together? They said things were really awful at home, but they thought they had to wait for the house to sell before getting separated. Another problem was that the husband was making repairs on the house but because the wife and three children were living in the house, the husband found it very difficult to make these repairs. It was already February and they wanted to list the house at the beginning of March during “prime selling season.”
We discussed it at mediation and tried to figure out what the best course of action was so the husband could get the repairs completed by March 1. What we came up with was a plan where the husband took a two week vacation from his job. Using money they had put aside, the wife and children got a short-term rental nearby in the same school district and the husband hired a helper. In two weeks he was able to renovate the kitchen, replace the kitchen cabinets and other repairs he would not have been able to do with the wife and children living in the home. Also because the husband was living in one room and the wife and children were not there, they were able to really clean up the house. When the realtor showed the house, it was in such pristine condition that it sold immediately.
This is typical of the kinds of decisions we can make in mediation. As we said in the Frielander case (Home Sweet Home – Move Out!), a couple is usually advised not to leave the marital home. But here, we came up with an “outside of the box” solution that ended up resolving their problem.
- Playing fast and loose with the money.
When contemplating divorce, don’t start making dramatic changes in your spending habits or business income. Your business suddenly no longer earning any money, or operating at a loss; money disappearing from your accounts or being moved around to various accounts; separate accounts that are hidden from your spouse. These are all red flags. If you are even thinking about doing this, then it is time to get divorced because “hiding assets in contemplation of divorce” really creates problems and distrust which makes it even more difficult to mediate the divorce. And by the way, if there is anything that will make a judge angry, this is it andcan result in a judge deciding not to divide the hidden money 50/50, but in a way that penalizes the offending party.
Don’t take money out of the bank and cancel the credit cards saying, I earned the money and I don’t want him/her to get anything. If anything is going to get you into court more quickly, it’s the primary wage earner cutting off the other spouse financially.
If you are in partnership with a relative, don’t suddenly transfer the business to them for a dollar thinking that your spouse won’t get a portion of the business because you transferred it. Did you really think you would get away with this?
One couple started writing their Settlement Agreement with me. They agreed to the terms and everything was going smoothly. They asked if it was OK to use joint credit cards until the Agreement is signed. I told them it was fine because until the Agreement is signed, it is best to maintain the “status quo.” Though the words “status quo” are Latin, they are well understood by most human beings – – except this husband, who immediately went out and bought a $35,000 Mustang Convertible. When it came time to split up the bank accounts, the wife, who knew nothing about this purchase, found a large amount of money missing from their joint account. When I asked the husband and wife why the balance was so small, the husband volunteered that he had bought a new car for cash. He felt this was OK because they were still married and if they weren’t getting a divorce, he would have done it anyway.
The wife didn’t agree with this thinking and she was right. When you are contemplating a divorce, you should not make any large purchases that will effect how your assets are distributed. The end result was that they made a settlement on her getting ¾ of the car purchase money back. The amount of money credited to him was the $5,000 that would have been the down payment on the car. The rest was moved to her side of the balance sheet.
- Announcing the new relationship.
If you are angry with your spouse and want to get even, think of another way of working out your anxiety. Maybe taking that kick boxing or Zumba class. Whatever you do, don’t announce that you are in another relationship and can’t wait to divorce them so you can get remarried to somebody “good”.
This will make it more difficult to go through the mediation process because now everyone is really angry. Try to keep things calm. If you are in another relationship, don’t try to hurt your spouse’s feelings by throwing it in their face and/or constantly reminding them that your new boy/girlfriend is so much better than they are.
This really happened! One husband announced his new engagement to his girlfriend when his current wife was about to sign the Settlement Agreement. Timing is important. Wait until the paperwork is done before you start making announcements about your new relationship.
Maintain a cordial relationship with your spouse until you get through the divorce. It may not be easy, but it’s worth the effort. Non-cordial relationships make the process take longer. People don’t want to agree when they are angry, they are feeling pressured or they think they are getting a “raw deal.” In that frame of mind they are not going to agree to anything. Know that time = money, so whether mediating or litigating a divorce, getting in your “dig” at your spouse here, can cause the costs to mount up in a hurry.
- Involving your children in the conflict.
- Don’t use the children as messengers to communicate with the other parent.
- Don’t criticize or disparage the other parent in front of the children.
Here is what a judge looks for. The custodial parent must foster a relationship between the children and the non-custodial parent. If the judge is looking for a reason to change a custody arrangement, number one would be a custodial parent trying to alienate the non-custodial parent’s relationship with the children.
One evening a husband comes home and he hears the wife and children upstairs in the bathroom and the wife is bathing both children in the bathtub. As he walked up the stairs, he heard them talking. He can’t hear much of the conversation but he did hear “and your father is an a**hole.” He didn’t say anything at the time and waited until later that evening when it was time to put the children to bed and read them a bedtime story. As he was reading the Velveteen Rabbit, one of the children turned to him and said “Daddy, why are you an a**hole?” That’s when the husband realized that things were not going well in the marriage. Up to this time, he thought everything was fine.
This could have been handled much differently. You never want to involve your children. When I met with the couple, I told them that this was absolutely the wrong way to proceed and made them promise that they would not engage in this kind of behavior, not only for themselves, but for the sake of their children. They may be separating but will continue to be involved as parents in their children’s lives, FOREVER.