Category: Division of Assets

A Qualified Domestic Relations Order, or QDRO (“quadro”), is an order drafted by an attorney that allows retirement funds to be used to pay for things like alimony (spousal maintenance) or portions of marital property during divorce. QDROs can be drafted in one of two ways, known as “separate interest” and “shared payment.” The difference between the two lies on which party’s life expectancy will be used to gauge how the alternate payee receives benefits.

What is an alternate payee? In QDROs, the party whose retirement interest is being transferred is referred to as the “participant,” while the other party (usually the divorcing spouse) is called the “alternate payee.”

The Difference Between Separate Interest and Shared Payment

In a separate interest QDRO, the benefits of the alternate payee are adjusted to his or her own life expectancy. One of the benefits of this approach is that it allows the alternate payee to receive retirement benefits even if the participants has not yet retired; however, because the alternate payee’s life expectancy is taken into account, it is possible for the alternate payee to receive fewer benefits per month. For example, an alternate payee five years younger than the participant would have benefits cut to compensate for those extra years since the Employee Retirement Income Security Act (ERISA) forbids QDROs from providing increased benefits.

With shared payment QDROs, the alternate payee would receive a portion of the participant’s benefits, usually after the participant retires. In this type of QDRO, the alternate payee should be careful to note that they are not guaranteed lifetime payments unless the participant elects a reduced joint and survivor annuity for the alternate payee’s benefit. Without this option, benefits for the alternate payee would end if the participant were to pass away. If, for example, the participant passed away one year after retirement, the alternate payee would not receive benefits beyond that year without the reduced annuity.

For questions regarding QDROs and divorce, a dedicated Denver divorce attorney can help.

Hidden assets create situations where one spouse is inherently being taken advantage of in divorce cases. Especially when one party has significantly more assets than the other, or where the divorce is contentious for other reasons, hiding assets may seem like a good idea to one or both spouses. Assets can be hidden in many ways ”“ false personal loans, lying about tax returns or bills, etc. If hidden assets are discovered ”“ and there are many ways to find them ”“ the dishonest party can find themselves losing much more than they would have had they disclosed assets honestly.

What if Someone Hides Assets Successfully and They Are Not Discovered During the Divorce Process?

The spouse will have to continue to hide the assets indefinitely, because if evidence surfaces, there are serious penalties. Most divorce settlements include a clause requiring full asset disclosure, and violating that clause can land the couple right back in the system to renegotiate the terms of the divorce. Now that one party has shown a lack of credibility, the courts are going to be much less kind to that party when redistributing the marital assets. The dishonest party can face civil penalties, like having to pay for the legal costs of the innocent party. Criminal penalties are also a possibility, such as charges of perjury for lying under oath about marital asset worth.

If the divorce did not include a disclosure clause, the innocent spouse can still petition to reopen the case or file civil charges against the lying spouse for damages.

If you believe that your spouse is deliberately hiding assets, speaking to a Denver divorce attorney can help.

Just about two-thirds of people entering into a second marriage will divorce. For third marriages, the statistic is in the realm of three-quarters. Because of this, it is incredibly important to be prepared to protect your assets when you are getting remarried.

Sign a Prenup

First and foremost, the simplest way to keep your divorce settlement and any assets gained from a previous marriage separate is to sign a prenuptial agreement before you marry your next spouse. It is not an easy conversation to have with your spouse and, in some cases, may be a deal-breaker, but prenups are incredibly helpful and perhaps the most important tool you have available for asset protection.

Other Options

If you have already married and did not sign a prenup, there are still steps you can take to protect your settlement. Keeping your assets separate is how you do this. Commingling separate assets with marital assets makes tracing money so complicated that often, the courts will consider all of the commingled assets to be marital, in which case they will be subject to equitable division. It is not that easy to keep certain assets, such as houses you owned from your first marriage, separate ”“ if you spend any marital assets on home upkeep and maintenance, for example, the courts can find that part of the home’s equity is now considered marital property. Courts can also consider increases in home value as marital property. If you rent the home out, the income from that can be marital property as well. Again, this points to the prenup as the simplest way of protecting your home.

Speak with a Qualified Colorado Family Lawyer

You will want to make similar considerations for other large assets such as vehicles, businesses and inheritances. Before you get married, or as soon into your marriage as possible, you will want to consider talking to a qualified financial advisor as well as a family law attorney.

Our Denver divorce attorneys can advise you on the right path to take to ensure that your property is protected before your second marriage.

Social Security benefits can change drastically when a couple decides to get divorced. Especially in situations where one spouse had a significantly higher salary that the other, or when one spouse stayed at home, one spouse’s benefits could be much lower, which might make it difficult for that person to stay afloat financially once the divorce becomes final.

Fortunately, there are ways for the spouse with lesser benefits to receive additional Social Security benefits based on their spouse’s work history. The key to having a claim to a portion of your spouse’s benefits lies in the 10-year requirement; as long as you and your spouse have been married for 10 consecutive years, you can supplement your own income with part of your spouse’s. The highest possible benefit you can receive is 50 percent of what your spouse would get at Full Retirement Age (FRA).

If, God forbid, one party has passed away, can the divorced spouse still benefit from the decedent’s Social Security benefits? Fortunately, the answer is yes, as long as the couple has been married for 10 years or more. Social Security has a rule allowing surviving divorced spouses to claim up to 100 percent of the amount the decedent was receiving before he or she passed away.

These rules only apply, however, if you have not remarried. If you are remarried, in typical circumstances you will not be able to claim benefits on your ex-spouse’s record unless your new marriage ends, either by death, divorce or annulment.

The Denver divorce attorneys at Divorce Matters are committed to assuring that you receive your full share of your marital assets after divorce.

That Powerball lottery jackpot got pretty big, didn’t it? At over $1 billion, it was the highest lottery jackpot in U.S. history. And despite the slim to impossible odds of actually striking gold, it is always fun to fantasize about what you would do with all of that dough. But Powerball winner beware ”“ if you are undergoing divorce, you could very well find your winnings sliced and diced by your spouse and the courts.

Whether or not a spouse can dip into your lottery earnings depends largely on what stage of the divorce you are in. If, for example, your divorce is already final, you will probably not have to worry about your winnings being taken away, since the lottery ticket will not have been purchased with marital funds. This could, of course, change if you have some sort of continuing financial obligation to your former spouse such as maintenance (alimony).

If you are still married when the lottery ticket is purchased, under Colorado’s equitable distribution rules, the winnings would be considered marital property and thus subject to the division based on the judge’s discretion.

What about situations where the ticket is purchased following separation, but prior to divorce? Typically, the ticket would still be considered marital property. Again, the distribution of the lottery winnings would be up to the judge.

If you did end up being one of the lucky three Powerball winners, even if you are in a happy marriage, it would be wise for your first phone call to be to a trusted attorney. There are plenty of family law matters you will want to take care of just in case your incredible luck turns sour.

At Divorce Matters, our experienced Denver attorneys fight to protect your property during the dissolution of your marriage.

When you are getting divorced in Colorado, you must disclose the value of all marital assets to be fairly divided between spouses. When it comes to ownership of a closely-held business, it is not always simple to value a company for divorce.

There are three commonly-used standards that can determine the value of a business:

1. Fair market value: This is how much a business would be worth to a hypothetical, knowledgeable buyer in a competitive and open market.
2. Fair value: Used most often when there is no market to offer a comparison.
3. Investment value: Essentially the market value for a specific investor with the capability of putting the business to its highest and best use.

Colorado Law and Your Business

Under Colorado law, there is no standard of value specified for closely-held businesses in divorce. That said, there is some case law precedence. In the 1985 case In re the Marriage of Martin, the courts decided that the value of a business is not necessarily dependent on the price set by a willing buyer, but rather dependent on whether the business has more value to the spouse than other tangible assets. This line of thinking was reaffirmed in the 1994 case of In re the Marriage of Graff.

Based on this case law, trial courts are allowed to adopt either fair market standard or investment value standard for valuation of closely-held businesses. Additionally, there may be other factors that affect a valuation in divorce that would not necessarily apply to an arms-length transaction. This might include a variation for lack of marketability, lack of control, minority discount, or other factors that affect the end price.

Work With an Experienced Divorce Modification Lawyer in Denver

If you are going through a divorce, you must present evidence of the value of your business. This can sometimes be a point of contention between spouses. If spouses do not agree on a price, our law firm works closely with independent business valuation experts to prove the case in court.

Our Denver divorce attorneys are skilled in the matters of property division, including the division of closely-held businesses.

It’s 2016 ”“ time flies, doesn’t it? And since it is a new year, many people are going to be making a New Year’s resolution. If you are married and do not have a resolution yet, consider using 2016 as your way of making sure that money does not ruin your marriage.

Every January, there is a roughly 33 percent increase in divorce filings. This could be due to a number of reasons ”“ perhaps the passing of the year makes more couples reevaluate their situations and realize that divorce is in the cards, or maybe couples who have already decided on divorce wanted to get through the holiday season without causing unnecessary stress on the family. But for many couples, money matters are the big cause for divorce. No matter what a couple’s level of income is, arguing about money is a huge indicator that trouble could be on the horizon.

Steps to Take to Ensure That Money Does Not End Your Marriage

• Have an honest conversation about spending habits. Often, the disparity between spending and savings can create a rift between spouses.
• Budgets are key. This ties into the first step, especially when one spouse is more of a spender and the other is more of a saver. Openness about expenditures, especially discretionary spending, can prevent those uncomfortable moments where the numbers don’t line up right and you find that you are in danger of not meeting your financial obligations. A monthly budget accessible by both spouses keeps everything centralized and transparent.
• Plan for forever. Create a roadmap of your financial goals, and plan as far in the future as you can. A one-year plan, a five-year plan, even a ten-year plan including your prospects for home purchasing, vehicles, vacations and your child’s education are best made far in advance.
• Schedule your financial discussions. Every month, depending on your schedules or when bills are due, plan to speak candidly with your spouse about what you are going to do about financial goals and obligations.
• Consider having multiple bank accounts: a joint account to which you both contribute a certain percentage of income to pay mutual expenses, and smaller sole accounts so each spouse can spend money without the other second-guessing the choices.
• If you can afford it, use the services of professionals to help. This may be a financial planner and/or a couple’s therapist to offer ideas for resolving money disputes.

Our divorce lawyers in Denver have the experience and resources to ensure your family law case is resolved in the most efficient and cost-effective manner possible.

If you are getting divorced and wonder what is going to happen to the assets in your Locked-In Retirement Account (LIRA), the good news is that the process is not overly complicated. Like any other marital asset, the funds in your LIRA will be divided according to your state’s policy for division of marital assets. Colorado, for example, is an equitable distribution state, so the funds in the LIRA will be divided equitably by the judge in your divorce case.

It is possible for you and your spouse to come to an agreement outside of court if you wish to adjust your shares in the LIRA’s value to accommodate for other marital assets that you might obtain, such as the marital home. If an agreement cannot be reached, however, it is up to the judge to decide who gets what percentage of the LIRA’s assets. Often, the judge will split the assets 50/50, but depending on other awarded assets, the judge may decide that a greater or lesser portion of the LIRA is more equitable for the spouses. The funds received after division can be taken as a lump sum payment with tax consequences or rolled into another LIRA.

Contact a Top Legal Team in Greenwood Village

One thing to consider post-divorce is that the spouse of the policyholder is no longer eligible for death benefits. However, it is possible for the couple to work out a different arrangement if both parties agree or a judge deems it necessary.

At Divorce Matters, our family law attorneys are dedicated to providing exceptional client experience throughout Denver and the state of Colorado.

Life insurance is used to protect loved ones from the financial ramifications of lost income in the event that a family member passes away. In many life insurance policies, a person will name their spouse as the primary beneficiary, but when the marriage goes south, figuring out what to do with the life insurance policy is very important, and often overlooked in lieu of other divorce considerations such as spousal support and division of property.

After divorce, in all likelihood you will not want your life insurance benefits passed to your ex-spouse, unless you have children; often, if the divorcing spouses have children and a life insurance policy, the parties will agree (or a court may order) that the other parent will be the beneficiary of the policy until the children reach the age of majority.

Fortunately, if you do decide to change beneficiaries, most life insurance policies are revocable, meaning that you are able to, at any time, change who your beneficiary will be. You can do this by contacting your life insurance agent, who can verify that the policy is revocable and help you through the process of changing your beneficiary.

Is Life Insurance Marital Property?

To determine whether your life insurance is considered separate or marital property, you have to figure out what type of life insurance policy you have, as well as whether your state is a common law or community property state. Colorado is a community property state.

In community property states, the type of property your policy usually depends on when you acquired the policy and how you paid for the premiums. If you acquire your policy prior to marriage and pay into it using funds separate from marital assets, then usually it is considered separate property. If you acquire the policy during the marriage and pay into it using community funds, it is typically considered community property subject to equitable division.

Contact the Highlands Ranch Alimony Lawyers at Divorce Matters Today

The attorneys at Divorce Matters handle cases relating to family law in the greater Denver area and throughout Colorado.

After divorce, in all likelihood you will not want your life insurance benefits passed to your ex-spouse, unless you have children; often, if the divorcing spouses have children and a life insurance policy, the parties will agree (or a court may order) that the other parent will be the beneficiary of the policy until the children reach the age of majority.

 Fortunately, if you do decide to change beneficiaries, most life insurance policies are revocable, meaning that you are able to, at any time, change who your beneficiary will be. You can do this by contacting your life insurance agent, who can verify that the policy is revocable and help you through the process of changing your beneficiary.

Asset division in a divorce is a process that gets more and more complicated the more property you own. In situations where you and your spouse share a high net worth, expensive homes or even just a long marriage, one thing you will want to consider doing before filing for divorce is finding a financial planner.

Suppose you already have one, someone your family has worked with for years. Continuing to use that planner is fine ”“ but only if one spouse finds a new one. Why? Because financial planners, unlike attorneys, are not bound by rules preventing them from advising both sides of a divorce. This presents a major conflict of interest; you want an advisor who is dedicated to you and you only, not your spouse. And often, your family finance manager will try to subtly suggest that both of you use his or her services to save money.

There are plenty of other situations where you can benefit from a personal financial advisor. Perhaps you were never involved in the budgeting or bill-paying process during your marriage, or perhaps you worry that your current advisor has a better relationship with your spouse than with you.

Why Find a Financial Planner before Filing?

Waiting too long to replace your spouse’s financial responsibilities to your family can be detrimental to your divorce process. A financial advisor can help you get your ducks in a row, as it were when it comes to planning your new single life.

If you have already begun your divorce proceedings, you will not be able to benefit from the advice of a financial planner when it comes to things like short-term cash needs, insurance, child support, trusts and any retirement assets you have tucked away. Having your financial advisor’s advice when you finally do begin the process of property division can be valuable in determining how to get the most equitable share of your marital wealth.

The Denver family law attorneys at Divorce Matters can help you develop a legal strategy to meet your financial needs and to protect your rights and your assets.