Preparing for Divorce

Divorce is never easy. But if you learn the basics, then prepare your facts, the divorce process will go much more smoothly. Here are the fact finding steps you should take when getting a divorce.

New Jersey & Pennsylvania Divorce Law Basics

First, familiarize yourself with a few basic principles about modern divorce laws. In New Jersey and Pennsylvania, which are the two “equitable distribution” states where I practice, obtaining a divorce is now essentially a financial and parental logistics undertaking. The so-called “guilt” or “innocence” of either spouse doesn’t enter into it.

What this means financially is that your marital assets and debts are split fairly and equitably. In practice, this often means equally, but there may be good reasons why one spouse should get more than the other.

However, “whose fault it is” is almost never a reason. New Jersey and Pennsylvania divorce laws look beyond who is the good spouse or the bad spouse, or whether there has been adultery, or who decided to get the divorce. That’s why I said at the beginning it was more a financial matter than a judgment on one person being “guilty.”

The same could be said for custody of children and parenting time. In most cases, decisions on legal and physical custody, and parenting time, should be made focusing on the relationships each parent wants with their children, and should always consider what’s in the best interest of the children. Who triggered the divorce or why usually doesn’t enter in -- though the practical ability of each parent to perform the duties of parenting going forward is an important consideration.

The three main issues in preparing for most divorces are the formulation of a parenting plan, the division of a couple’s assets and debts, and the issues of child and spousal support, or alimony.

Custody & The Parenting Plan

Let’s talk about custody first. Legal custody under New Jersey and Pennsylvania divorce law is the right of both parents to participate in decision making for their children. It is most often shared by couples. Sole legal custody is appropriate only if there is something profoundly wrong with one parent or the parents are so hostile and volatile it makes no sense to expect them to be able to negotiate anything concerning their children.

But legal custody has nothing to do with parenting time, which is physical custody. Once parents separate, unless there is an important reason why not, the children will spend time in each parent’s home. A parenting schedule should include holidays, vacations, long weekends, winter and spring breaks, birthdays, important family events and a variety of lifestyle issues.

In preparing for divorce, one of the most important things you can do is read articles about children and divorce. There has been a tremendous amount of research on how to help your children get through a divorce. You will be surprised that many of the ideas and preconceptions you hold may not be correct. Sometimes what parents do with the best of intentions is not what’s best for their children. In this case, it will take some time, but the more you know, the better you will be able to prepare and negotiate a parenting plan during your divorce that is in everyone’s best interests.

The trend is toward equal parenting time. This is not the best solution for every couple, but there is a widely accepted assumption that it is good for children and their parents to spend substantial and varied time with each parent.

The parenting plan most commonly adopted when I started practicing law, and later mediation was that the children would live primarily with their mother and would spend every other weekend with their father. The weekend might include overnight Sunday, but usually did not. It might include a dinner or an overnight stay during the week, but not always.

We have come to understand that this parenting schedule did not work well for anyone. The mother was responsible for almost all the parenting and was often overwhelmed and exhausted, particularly if she worked outside the home as well. It created an artificial relationship with the father because he was involved in so little of their day to day lives.

Calculate Assets and Debts

There is a very common misperception about marital assets and debts. Assets acquired, and debts incurred during the marriage are the only assets and debts that will be divided in divorce, for the most part. That’s the basic principle under New Jersey divorce laws. Except for two major exceptions, it doesn't matter who paid for something, to whom it is titled, or who primarily or even solely uses it.

The two major exceptions are assets inherited by one spouse either during or before the marriage, or assets gifted to one spouse by a third party – those assets are considered separately and have special rules. Gifts between spouses during the marriage are marital assets.

When preparing to discuss your divorce settlement, the most important thing you can do is create an inventory of assets and debts. Put a value on everything. This may include a market analysis of your home or an appraisal of investment properties. Traditional pensions often have to be valued by experts, which is not difficult or expensive to have done. And there are appraisers who can help you put a value on anything from a piece of jewelry, a work of art, to a business.

In most cases, assets include the following categories:

• Real estate including investment properties, land, some timeshares, options to buy

• Financial assets like bank accounts, stocks, bonds, investment accounts, stock options, royalties

• Vehicles and vehicle type assets including cars, motorcycles, boats, RV’s and other recreational vehicles

• Retirement accounts including pensions, annuities, 401(k)s, 403(b)s, regular and Roth IRAs, and many variations on these types of accounts.

• Personal Property mainly includes household furnishings, art, collectibles, clothing, electronics, sporting goods and jewelry.

• Businesses

In most cases, debts include the following categories:

• Mortgages and home equity loans and lines of credit

• Vehicle loans

• Student loans

• Bank and personal loans including from friends or family

• Loans drawn from retirement accounts

• Credit cards

The bottom line is, before you can resolve these financial issues, you must -- and I stress must -- have a comprehensive list of all assets and debts, what they are worth, or what is owed on them.

For most of my mediation couples, this is not a terribly difficult step in getting divorced. If one spouse has greater knowledge of the family finances than the other, I help them organize the necessary information to level the playing field. Often this is done in conjunction with attorneys and financial experts.

The more of this legwork you can do before you begin the divorce mediation process, the easier and more efficiently your mediation will go.

Child and Spousal Support (Alimony)

There are child support guidelines in most states. The two major components that go into calculating child support are the parents’ respective incomes and the number of overnights the children spend with each parent. New Jersey and Pennsylvania both have child support guidelines. You can find child support calculators for your state online to get a general idea of what child support is likely to be. In mediation, couples often agree to a different support amount, but it helps to know the guideline amount as a point of reference.

New Jersey and Pennsylvania divorce laws do not have alimony guidelines. Pennsylvania seems to be moving toward them. In the court system, the computation of alimony is complicated, but the overriding goal is to allow each spouse to maintain a standard of living that is reasonably comparable to the one they maintained during the marriage.

What you will need to determine an appropriate alimony and child support amount:

You will need to know your and your spouse’s incomes. For W-2 employees, this is pretty straightforward. It gets more complicated when spouses are independent contractors, self-employed, or business owners, but again, with the help of financial or legal professionals, it can be determined.

Then you will need to know what your monthly budget has been, and what you anticipate your monthly budget needs to be after the divorce. What have you and your spouse spent historically to fund the lifestyle you and your children have maintained? I give my clients a budget form that helps them do this.

Then the second budget looks at what their new lifestyle will cost. These budgets take time but area valuable tool to getting divorced by helping the parties clarify what they will need to fund the lives they envision going forward after the divorce.

Once you have prepared concrete figures for all of your assets and debts, for your useable monthly incomes and for your past and anticipated monthly budgetary needs, you will be in a position to negotiate a settlement that makes sense under the law, and meets everyone’s needs going forward.

Mediation Removes Fear from Divorce

You will also find that as you accumulate this knowledge, whether you bring it with you to the mediation table initially or acquire it through the divorce mediation process, much of the fear and anxiety about the future will dissipate. And for many people, as that happens, the anger dissipates as well.

Though it is never easy to create two lives where there was one, you can make this transition easier on yourself by learning and using the steps outlined above when preparing for your divorce. From there, your new life begins.

Contact Transitions Mediation Center to learn how it really can be your divorce and mediation can help you come to a mutually beneficial agreement and move forward with your life.