Did you know that divorce filings typically spike during the first three months of a new year, right after the holidays? This phenomenon is commonly known as “split up season” by divorce attorneys.
In preparation for “split up season,” we asked Michael D. Stutman, Partner at Stutman Advocate Stutman & Lichtenstein, LLP (SASL) and his team to highlight some of the key issues in divorce matters.
This is what they had to say:
- Gather those documents
Start gathering as many documents as you can lay your hands on. Collect and organize paperwork such as: tax returns, bank statements, credit card statements, credit applications, board approval packages for cooperative apartment purchases, submissions for club memberships, and brokerage statements.
- Give thought to your assets and their value
Think about whether your assets are going up or down in value and if the change in value is related to what you or your spouse does or is it a factor of market forces.
- Reevaluate your cash and credit needs for the next 6 to 12 months
Be aware that many jurisdictions, including New York, impose certain automatic financial restraining orders on the parties immediately upon the filing of a divorce proceeding. These automatic orders can freeze many assets and bar the involved parties from changing names on bank accounts and changing insurance policy beneficiaries, among other actions. Getting relief from these restraining orders can be time-consuming, difficult and costly.
- Consider living situations
Think about the short- and long-term living conditions for you and your family. This is essential if there are children who require assistance in getting from one parent to the other. Also consider the logistics of moving children around with respect to schools and activities.
- Revisit yours, and your spouse’s, social media and internet presence
Change your passwords and consider modifying your profiles on social and business media websites, while taking screenshots of applicable internet and social media postings.
- Take a second look at debt and joint credit lines Consider if it is worthwhile to pay down debt and close access to joint credit lines. These types of activities, in particular, may be restricted once the divorce is effective.
- Consider downgrading your life insurance policies Think about whether it is necessary to maintain your current level of life insurance policies. You will be obligated to provide an amount of death benefit sufficient to cover certain future liabilities (such as unfunded college expenses, unfunded private school tuition, basic child support and spousal support). If you are over insured you may want to consider paring down your coverage.
- Update your legal documents
You may want to consider changing the death beneficiary on instruments that would result in a windfall to your soon-to-be former spouse in the event of your death. If your current will provides your spouse with more than he or she would receive if you had died without a will, you may want to consider revoking your will. If you have given your spouse a health care proxy and/or a durable power of attorney, you should revoke them. These actions may be restricted after commencing the divorce.
- Reconsider any plans to sell assets
Give thought as to whether you should proceed with any plans to sell assets that might bring more in a sale than their value if appraised. Be aware that if you own an asset such as a business, any offers to purchase that business will be discoverable.
- Understand attorney/client privilege
Keep in mind that while meetings with your attorney are privileged, your attorney is obligated, at times, to state that she or he has reason to believe that what you are saying, either in testimony or in a document, is untrue.
Facing a divorce is never easy. In addition to numerous emotional issues, there are many financial and legal aspects to consider. Mazars USA, a leading accounting, tax and advisory firm, has the expertise and industry knowledge to help you navigate this complex transition. Our Matrimonial Services Practice group offers an array of value-added services for your premarital, divorce and post-divorce services. We collaborate with prominent matrimonial attorneys, including the SASL team (please click here for more information about Michael Stutman’s firm).
We hope that these suggestions and tips are helpful for anyone considering, or advising someone who is considering, a divorce.