Brian D. Perskin & Associates

Financial Pitfalls during Divorce

How to avoid financial pitfalls during divorce

Last week, we let you in on a little secret: there are hidden financial benefits to divorce. Unfortunately, there are drawbacks, as well. What are the most common financial pitfalls you may face during your divorce, and how can you avoid them?

Paying Your Retainer Fee

The first financial pitfalls of divorce begin as soon as you hire an attorney. Most divorce lawyers require you to pay a retainer fee, which can costs thousands of dollars. The initial cost of a divorce should not dissuade you from filing.

There are a few different ways you can prepare for the financial burden of a retainer fee. If you know a divorce is imminent, but you are not ready to file, you can save money to pay your retainer. Some litigants borrow money from family members, while others choose to finance their divorce with Flexxbuy.

Discovery Costs

The discovery phase of divorce can drain your bank account, unless you get proactive early. Gathering financial documents now, will prevent your attorney from scrambling to send subpoenas to institutions and companies during the middle of your case.

Failing to comply with your ex’s discovery demands will lead to additional court appearances. These court appearances, along with extensive motion practice, are major financial pitfalls during divorce. Save yourself time, and money, and use our free Financial Checklist to start keeping track of your documents.

Tax Implications

While there is a chance your divorce may benefit your taxes, you need to be aware of any financial pitfalls when you file. Your filing status, exemptions, and deductions will change. You are not allowed to deduct child support payments on your taxes, but you can do so with alimony payments.

Understanding exactly how your divorce will affect your taxes will help you avoid the confusing financial pitfall. Discuss your options with your attorney prior to settling, and always have a certified professional file your taxes on your behalf.

Letting Your Emotions Win

Letting your emotions get the best of you is one of the most common financial pitfalls of divorce. You can do serious damage to your case when you let anger, resentment, and hurt cloud your judgment.

Divorce can be emotionally traumatic, but it is best to treat your case like a business process. Be pragmatic, listen to your attorney’s advice, and check your emotions at the door. Never fight with your ex out of revenge, and keep the big picture in mind throughout your case. The sooner you learn to stop being emotional, the sooner your divorce can be finalized.

Dealing with Financial Pitfalls

Regardless of the steps you take, you will most likely experience one of the many financial pitfalls to divorce. You can help minimize the impact of your divorce by hiring an experienced family law attorney.

At Brian D. Perskin & Associates P.C., we understand that each divorce is unique. This is why we create personalized representation plans for every client. Your divorce is one of the hardest things you will ever go through, but the right attorney can make it a little easier.

For more information on divorce and family law in New York City, contact a member of our team at 718-875-7584. Or, visit us on vCita to schedule a free, no obligation consultation today!

The Financial Benefit of Divorce

Hidden financial benefit of divorce

It comes as no surprise that divorce can be a costly endeavor. Legal fees, becoming a single income household, and support payments can do major damage to your wallet. As awful and scary as that all sounds, there is a financial benefit to divorce.

Fresh Start for Financial Responsibilities

You face a big lifestyle change when you go through a divorce, and there is a financial benefit to this. When your lifestyle changes, you have the opportunity to revise your current financial responsibilities. For instance, a big adjustment, like selling the marital home and downsizing, can be great for your financial future.

Financial Benefit for Kids

An often overlooked financial benefit of divorce involves your children and their college expenses. The cost of a Bachelor’s degree continues to rise, and many families turn to the Free Application for Federal Student Aid (FASFA) to help offset tuition costs. FASFA only requires that the custodial parent provide their financial information, which they use to determine the amount of aid a student will receive. This means that your children can get a larger amount of educational aid, which is a huge financial benefit.

Paying Less Taxes

Your taxes will be impacted in a couple of different ways when you get a divorce. Two of the major financial benefits surround your filing status and tax deductions. Your filing status will change from “married, filing jointly” to “single”, which may place you in a lower tax bracket.

The biggest financial benefit during tax season involves your deductions. You may end up paying less for standard deductions, such as medical expenses, but you may be on the hook for support payments. Double check your divorce agreement, and contact your attorney if you have any questions.

Better Returns on Investments

Divorce won’t necessarily make your investments more lucrative, but it can help you make better investment choices. When you get divorced, and are forced to reevaluate your finances, and in doing so, you will become more educated and informed. Knowledge is power, especially when it has such a big financial benefit.

The Right Attorney Can Help

Divorce has the power to wreak havoc on your finances. The right divorce attorney can help make that financial blow a little softer.

At Brian D. Perskin & Associates P.C., we specialize in divorces with complex financial components. We strive to provide expert representation, with an emphasis on securing your financial future. For more information on New York divorce, or to schedule your free consultation, contact us at 718-875-7584 today!

Is Spousal Support Guaranteed in a New York Divorce?

Spousal Support

In a New York divorce, there is spousal support or "temporary maintenance" and then there is maintenance. Spousal support is money that a higher-earning spouse pays to the lower-earning spouse while they are still married and their divorce action is pending in the courts.

On the other hand, once a couple is officially divorced, that financial support is no longer referred to as spousal support, instead it’s called “maintenance,” which is the money paid after a divorce is finalized.

In other words, “maintenance” is the money that an ex-spouse pays their ex-husband or wife after the divorce is official. Sometimes this is called alimony, sometimes it’s called spousal maintenance. Is it safe to assume that spousal support and alimony are always awarded in a New York divorce? No, spousal support and maintenance are not guaranteed in a New York divorce.

Marital Settlement Agreements

If the couple is of high-net worth, the spouses can agree on a spousal support and/or maintenance arrangement, which would be incorporated into their marital settlement agreement. Of course, you don’t have to be a high-net worth couple to have a divorce that involves spousal support and maintenance, but it is more likely when a wealthy couple divorces.

What if a spouse refuses to pay spousal support and/or maintenance? If the higher-earning spouse will not voluntarily agree to pay spousal support and/or maintenance, but the lower-earning spouse wants it, then the spouse who is asking for support can petition the court for spousal support while the divorce is pending and maintenance once the divorce is finalized.

Is spousal support always awarded in a New York divorce?

Even if a spouse asks the court for spousal support and maintenance, that does not mean that he or she will receive it. Spousal support and maintenance are awarded on a case-by-case, as-needed basis.

When deciding whether or not to award spousal support and/or maintenance, the court will carefully review the couple’s financial situation, among other relevant factors, such as:

  • The age and health of each spouse
  • Each spouse’s income and assets
  • The lower-earning spouse’s need for support
  • The higher-earning spouse’s ability to pay support
  • Which spouse will have the children most of the time
  • The lower-earning spouse’s contributions as a homemaker or stay-at-home parent
  • The employability of the lower-earning spouse
  • If the lower-earning spouse needs to go back to school to reinforce their job skills
  • Anything else the court deems relevant

When people are legally married to each other in New York, they are expected to financially support each other. This means that either an ex-husband or an ex-wife can ask for financial support from their ex-spouse.

A soon-to-be ex-spouse has every right to ask for support and/or maintenance, even if they are working full-time, as long as they really need it and their spouse can afford to pay it. If a judge orders support and maintenance, usually he or she will set an end date, but not always.

Even if a judge does not set an end date for maintenance, that does not mean that it cannot end. If there is a significant change in circumstances, the maintenance may be lowered or terminated at a future date.

If you are interested in learning more about spousal support and maintenance in New York, contact Brian D. Perskin & Associates P.C. to speak with an experienced divorce attorney.