Sunday, December 23, 2012

Thinking Ahead

It's the time of the year when many people are holding back on making a decision they really want to make.  They are putting off filing for divorce until after the holidays. Nevertheless, they are still thinking about their options.  If you find yourself considering the possibility of divorce, here are some things to think about until the holidays are past.

1.  Counseling.  It's never too late.  Sometimes counseling for you will help alleviate the problems and stress.  Sometimes couples counseling works, if both sides are willing.  Sometimes the party who needs counseling won't recognize it.  If you think it's your spouse who needs counseling, please consult with a counselor to discuss the situation.

2.  If you are going to divorce, there are a number of process options.  For a current review, see my blog post in the Texas Collaborative Law Blog here for the December 22, 2012 post.

3.  What issues will come up in a divorce?  Here are some to think about:
  • Investments
  • Retirement funds
  • Real estate
  • Debts
  • Taxes
  • Businesses owned by the parties
  • Professional careers
  • Personal property
  • Collections
  • Guns
  • Household furniture and furnishings
  • Child custody
  • Visitation
  • Child support
  • Pets
  • Alimony
  • Insurance
These are issues that you should start thinking about if you are considering or facing a divorce.  Your attorney will discuss them with you.  It would also be helpful for you to gather any documents that you can find that relate to any of the issues.  That will help you and your attorney prepare for a settlement or court.  It's also a good idea to gather and copy records before they disappear in the confusion once a divorce is filed.

Wednesday, December 12, 2012

Watch Out for the Side Effects!

I just read about a new App for a smartphone this morning.  This App was developed in California to help people figure out how to divide up their property as they go through a divorce.  It's really intended to replace an attorney's role in the process.

As admirable as that may seem, there is a great potential for creating major problems in some cases.

Full disclosure:  I am a divorce attorney and I am paid to help people undo their marriages.  But, the people who are wanting to do their own divorces don't want to hire me or any other attorney, so their decision has no real effect on me.  I'm not losing any business because they wouldn't have hired me anyway.  I do think people in short-term marriages, with no kids and little or no property, can probably do their own divorces, if they are so inclined.

This post is not to save business for me.   I am writing this so that people with children or some significant assets or debts can make better decisions on the best course of action for themselves.

Here are some possible side effects for an untrained person using some tools and trying to work out their own divorce.

1.  Tax consequences.  No one likes surprises from the IRS.  Unfortunately, tax issues are lurking everywhere in divorces.  Paying the other spouse some money may be alimony or it could be property division.  There can be taxes owed if it's not done right.  Different retirement assets have different tax consequences which can also affect the net value of those assets.  Real estate sales may trigger capital gains taxes, now or in the future, and that may affect the net value of the land. The parties need to consider their tax basis in various investments when they are doing a property division.  Tax consequences probably won't be much of an issue if someone doesn't have any of these assets.

2.  Enforceability.  In divorces, it's not uncommon for disputes to break out post-divorce about whether agreements are being followed.  The terms of the divorce decree must be clearly spelled out with proper language in order for them to be enforced.  In many cases, there needs to be some collateral or something available as a back-up. Again, if there are no significant assets, this is probably not an issue, although people will fight over anything, as you probably already know.

3.  Extra paperwork.  Many people assume a judge will simply divide everything in half.  That's one way to divide things, but it rarely happens in court.  People can decide to agree on their own to do that, but it may cause a lot of extra paperwork to complete the divisions.  There are often simpler ways to do the property division, which can be handled by an experienced attorney, but which a private party may know nothing about.  Extra paperwork means more opportunities to mess things up.

4.  Remaining connected.  As badly as one or both parties may want to be divorced and separate and independent individuals, they may end up connected for a long time due to property or debt issues that are joint.  An experienced attorney may be able to help them come up with ways to be apart.  Doing things on their own, the parties may end up still connected.

5.  Incompleteness.  Maybe the most common problem for people doing their own divorces is the failure to take all the necessary steps.  Forms may be incomplete.  Language in the decree may be incomplete.  And sometimes there are some obvious  problems that are overlooked.  Once again, with no kids and with little or no property, there may not be a problem.  Otherwise, count on problems.

These are not all the problems that can occur when people decide to do their divorce without an attorney.  In very simple cases that may be fine.  In all others, it is risky.  In addition, it is common for one party to take advantage of their spouse when the party has greater knowledge, experience and control.  Divorce is such an important event, it shouldn't be done without a lot of thought and help.

Footnote:  Each state has different divorce laws which can affect the outcome of the case.  Using California, New York or even Oklahoma law for a Texas divorce is virtually guaranteed to be a disaster.

Monday, December 3, 2012

5 Top Myths about Litigation

I often run into a client or potential client who seems unreasonably confident about the outcome of his or her divorce case.  The reason usually is that they have heard and believed some common myths about how the divorce litigation system works.  At the risk of damaging some happy feelings, I find it's necessary to expose some of the worst myths.  Better to be disappointed now than to continue to count on something that will never happen!

1.  The Court will figure out/discover the "truth".  Unspoken is the assumption that the truth found by the Court will be the same one believed in by the party.  In reality, Courts often find facts to be different from what one or both of the parties believe, or a Court may decide it hasn't been convinced by sufficient evidence one way or the other.  Truth is usually in the eye of the beholder, and Courts very often disagree with the parties about what the truth is.  What is obvious to a party may be completely invisible to a Judge, so don't count on a Judge automatically agreeing with your view of the truth.

2.  Justice will prevail.  Just like with truth, there is no universal, indisputable "justice".  Don't assume that a Judge's decision will coincide with your view of justice.

3.  The Court will divide everything 50-50.  There's nothing in the law that requires a 50-50 split of property or debts.  The Family Code calls for a division that is "just and right", a  standard equally as vague and undefined as "justice".  The Judge actually has a lot of discretion about how things are to be divided.  There is no concrete, black-and-white answer.

4.  The easiest solution is to just go to court.  HA!  There's a lot of preparation for both sides and you can expect to wait many months for your day in court.  Settlement, while sometimes emotionally difficult, is much better than preparing and going to court.

5.  I know what will happen because of what happened in my sister's (or best friend's or neighbor's or hair dresser's, etc.) case. No two cases are alike.  The facts are different and the cases are probably in different courts, with different parties, different attorneys and different issues.  Don't assume that what worked for someone else will work for you.

So, what can you do if you can't rely on these handy my?  Talk with an attorney and get some qualified advice.  Follow your attorney's advice.  Do yourself a favor.