New Bill Could Affect Military Divorces

The Uniformed Services Former Spouses Protection Act (USFSPA) allows former spouses of servicemembers to collect retirement benefits based on the servicemember’s work in the military. Basically, the law allows military disposable retired pay to be considered marital property, thus subjecting it to equitable division in a divorce action. A new bill being proposed in Congress could shake up the USFSPA by limiting a former spouse’s claim to the servicemember’s retirement pay.

As it currently stands, the pay that a veteran’s former spouse receives upon the veteran’s retirement is based on the veteran’s rank and years served at the time of retirement. This means that the former spouse would receive benefits based on the veteran’s service that occurs after the divorce. So, if a servicemember gets divorced after the first year in the Navy, for example, and goes on to serve for another 10 years, all of the advancement during those 10 years would factor into the former spouse’s share of the retirement benefits.

If the new proposal goes through, instead of the former spouse receiving benefits for the servicemember’s entire military career, including advancement post-divorce, the benefits would be limited to the service member’s rank and years served at the time of the divorce.

Contact us for your Military Divorce

If you are currently serving in the military or are the former spouse of a servicemember, it would be wise to keep an eye on this bill.

The Denver family law attorneys at Divorce Matters can help veterans navigate the complex issues of retirement benefits in divorce.

Can I Lose My 401(k) To A Divorce?

Senior divorce (you may have heard it called gray divorce or silver divorce) has been on the rise since 1990. Suppose you have a 401(k) you’ve been paying into for many years. You’ve had a happy marriage as well, however, that marriage has been falling apart at the seams. Finally, you are told that your spouse wants a divorce ”“ what happens to that retirement account? Is it yours, or will it be divided between you and your spouse during the divorce proceedings?

The division of retirement funds in divorce needs to be understood by both parties prior to the divorce, because the sudden financial shakeup that results can drastically alter a person’s retirement plans.

Retirement Funds Are Marital Assets

According to a recent survey from the American Academy of Matrimonial Lawyers (AAML), the three most commonly fought over assets for divorcing couples over the age of 50 are alimony (called spousal maintenance in Colorado), business interests and retirement accounts. When it comes to your retirement account, you have some options:

  1. Because marital assets must be divided equitably, you can choose to keep the entirety of your 401(k) while giving up other marital assets of comparable value. When considering this option, you must look at the long-term tax ramifications of such an arrangement as well as the current and long-term value of the assets you are exchanging to keep your 401(k). What may be equitable division now may not look so equitable in the future.
  2. You can split the 401(k) with your spouse. To do this, you must have a Qualified Domestic Relations Order, or QDRO. Your attorney can help explain how a QDRO can help, or you can read our related blog here.
  3. If you are over the age of 59 ½ or have left your company, you can roll over a portion of your 401(k) into an IRA to be awarded to your ex-spouse. This option may be desirable because it allows you to remove the funds from your 401(k) without any tax penalties, as well as giving your spouse more control over the funds awarded to him or her.

Our Denver divorce attorneys can help you determine the best course of action moving forward for clients divorcing after 50.

How Do I Split A Joint Account In Divorce?

What’s yours is mine and what’s mine is yours, right? In marriage, tons of assets get commingled for one reason or another ”“ perhaps the couple likes the transparency joint assets afford, or the convenience of only needing one account to pay all of those bills. But what happens when a marriage turns sour, and suddenly the last thing you want is for your name to be appended to an account with your ex? Before you get divorced, you need to shut down that joint account.

Fortunately, the process of closing a joint account is not all that difficult, although the particulars of your relationship may make it so. Here is some advice to get that joint account split as easily as possible.

  1. Before you do anything with your joint account, create a new one in your name only. This is the account you will use for your everyday expenses ”“ try to limit your use of the joint account, and stop using it entirely if possible.
  2. Generally, it’s best for you and your spouse to bite your tongues and shut down the joint accounts together. Some institutions such as banks and credit unions require both parties to be present for an account to be closed.
  3. If you are not on good terms with your ex, you should speak to your lawyer as soon as possible regarding any funds kept in joint accounts, especially if you are afraid that your spouse might empty the account and leave you high and dry. Once the divorce petition is filed by either party, a financial restraining order is entered. This is a court order that prevents either spouse from making any big changes to financial accounts.
  4. If the joint account is associated with any recurring debits or deposits, you should make sure to halt those before your account is closed. You don’t want people coming after you for money or late fees associated with the closed account. And if the account receives a deposit after it is closed, it may be reopened by the institution that holds the account ”“ and then you’re stuck on that joint account again until you go back and close it.

Our Denver divorce attorneys can help you plan for your financial future following divorce.

Should I Base My Divorce Demands On Other Divorcees’ Settlements?

How much of your marital assets are you owed in your divorce? If it is your first time going through divorce, you might not have any idea what to expect when your assets are divided and the divorce is finalized. Will you get the house? The car? How much of the joint savings will go to you? Retirement funds? Stock options? It’s a lot to think about!

Naturally, your best bet in learning what to expect is to speak to someone who knows ”“ but that doesn’t mean speak to other divorcees to see what they got in their divorce settlements. Maybe your best friend or your sister have gone through this before, and you’re curious to see how well off they were after divorce ”“ but they are not the ones you should be basing your expectations on. Here’s why.

Stop Listening To Your Friends””Every Divorce Is Different

If you start probing into the lives of friends, friends-of-friends or family members who have gotten divorced, you might not stop to think that there is no one-size-fits-all divorce settlement. Maybe you are planning on paying a certain amount of child support, until you hear from your cousin that his friend doesn’t have to pay any at all, despite having less time with the kids than you do. Or perhaps you make much more money than your spouse but don’t think it’s fair that you will be paying temporary spousal maintenance while your brother didn’t have to when he got divorced.

It is important to remember you are only hearing one side of the story, and you are lacking the full set of facts. It’s easy to think that you are being given a bum deal in divorce when it seems like everyone around you is doing great.

You should talk to someone about what you want in a divorce, and what you think is fair ”“ but that someone should be an attorney, not Jane Doe who lives at the other end of your street. Don’t be afraid to ask your attorney questions about how divorce works in Colorado and why the terms of your divorce are the way they are. If you don’t understand the documents, speak up. If you don’t know why you have to pay alimony, speak up. Knowledge is power, and ultimately your goal should be to ensure a fair divorce settlement. Don’t get angry because of the way other peoples’ divorces go ”“ they are not you, and their divorce is not the same as yours.

Our Denver divorce attorneys offer mediation services for prospective divorce clients and are committed to ensuring equitable distribution of assets in your divorce.

The Divorce Ultimatum ”“ A Good Idea or A Terrible Mistake?

The ultimatum ”“ the pinnacle of high-risk-high-reward negotiating tools. If you don’t do X, then Y will happen. In some disputes with your spouse, you may decide that giving an ultimatum is the best way to get what you want. In some situations, it may work ”“ but often, even when you do get what you want, the issuance of the ultimatum can do irreversible damage to your relationship. This is especially true when the ultimatum stake is divorce.

Should I Give A Divorce Ultimatum?

The key to giving an ultimatum is to mean it. Too often, spouses use ultimatums as a sort of “cry for help” ”“ they aren’t truly saying, “If you don’t stop gambling, I am going to leave you,” they are saying, “please stop gambling, I don’t want to have to make the decision to leave you.”

Ultimatums are a last-resort method to change something going wrong in your marriage, not an empty threat that you aren’t fully committed to following through with. Ultimatum = ultimate = final. It’s the last straw, the breaking point, the coup de grâce. Issuing an ultimatum that you aren’t going to enforce will damage your relationship with the person (prolonging the problem) and ultimately will solve nothing for you.

The best way to avoid having to give ultimatums is honesty up front. Be clear about your needs in your marriage and how you are truly feeling, instead of making baseless threats. If you are not yet ready for divorce, try to work out your marital issues with a couples’ counselor or therapist. A third party neutral can offer insight and ideas that the couple is unable to see by themselves.

Our Denver divorce attorneys handle all matters of family law including mediation, arbitration, asset valuation and matters of spousal and child support.

Can You Challenge A Prenup?

An ironclad prenup is the best way for a person to preserve their assets following divorce. While prenups are generally a good idea, there are plenty of ways for someone to end up with one that is unsatisfactory or unfair.

Prenups have to be done a certain way to be valid. You may have grounds to contest the terms of a prenup if any of the following are true:

  • If the terms of the prenup are “unconscionable,” then the prenup cannot be enforced. What does unconscionable mean? Basically, if the prenup is excessively unfair to one party and will leave that party destitute upon divorce, generally, the court will not enforce it.
  • If you are coerced into signing a prenup, whether by your spouse-to-be or even an attorney, you could have the prenup thrown out.
  • If the prenup contains invalid provisions, or terms that violate other laws, the prenup can be thrown out, although it is also possible for the court to strike the invalid pieces and enforce the rest of the prenup’s terms.
  • If you are rushed into signing a prenup, the prenup may be unable to be enforced. In many ways, rushing a prenup is akin to coercion.
  • If you have not read the prenup (if your spouse includes it in a stack of papers, for example, and asks you to sign them quickly) then it is possible to have the prenup nullified.
  • If one spouse lies or fails to provide complete information about income, assets and debts, it is possible to throw out the prenup.

Prenups are a very valuable tool for marrying couples, but they are not infallible. As with all matters relating to property and family law, you should speak to a family law attorney about the terms of your prenup.

Can A Credit Report Predict Divorce?

Did you know that 67 percent of marrying couples are too embarrassed to tell their significant others what their credit scores are? That’s true, according to a certified financial planner with Delta Community Credit Union. That number is shocking, considering how important financial transparency with your spouse is to a lasting marriage.

In fact, not knowing your spouse’s credit score could be a predictor of divorce.

How Does Credit Score Predict Divorce?

The Federal Reserve looked at 12 million couples over the course of 15 years, studying their credit scores, and found that the higher your credit score is, the more likely you are to stay together. That may seem obvious, as a high credit score may demonstrate person is trustworthy and financially responsible, two positive traits in a partner. (Of course, these are not moral considerations. Many people have low credit scores due to circumstances beyond their control, such as unemployment and medical bills.)

The study also found that the closer your credit score is to your spouse’s, the more likely you are to stay together. For every 66-point difference between your scores, there is a 24 percent chance the marriage will fail within four years. Yikes!

Engaged couples should plan their finances together in a transparent manner and work out their future household budget, establish joint and/or separate bank accounts as well as retirement planning. The best ways to build credit with your spouse are to budget responsibly, set clear financial goals as a couple and meet with your spouse regularly about your finances. Even if your credit is bad, being honest about it and your plans to build credit helps foster goodwill between you and your spouse and help to build a long-lasting relationship.

How Much Alimony Will I Get in My Divorce? Divorce Matters® Can Help

Spousal maintenance, commonly referred to as alimony, is a crucial element in divorce cases where one spouse requires financial assistance to maintain their standard of living after the marriage has ended. In Colorado, spousal maintenance is calculated and determined based on various factors, including the financial situation of both spouses, their earning potential, the duration of the marriage, and other relevant circumstances. If you are wondering, “How much alimony will I get?” these factors will play a significant role in the determination – and Divorce Matters® is here to help.

Maintenance will only be granted if the courts find that the spouse seeking it cannot provide for his or her reasonable needs and lacks sufficient property, including property apportioned to him or her. Additionally, the spouse seeking maintenance must be unable to become self-supporting through employment or be the custodian of a child which prevents said spouse from seeking reasonable employment.

Determining Eligibility

Once the court has decided that a spouse meets the proper qualifications, they will make the following considerations in deciding the length and amount of spousal support to be granted:

  • The spouse’s financial situation, including any assets obtained through the divorce settlement, as well as any child support the spouse is receiving
  • The spouse’s potential earning capacity, including the time it would take for the spouse to receive the needed education and training to facilitate that earning capacity
  • The spouse’s standard of living during the marriage
  • How long the marriage lasted
  • The spouse’s age, as well as his or her physical and emotional condition
  • Whether the person paying for maintenance can afford the maintenance agreement

If you are asking yourself, “How much alimony will I get?” the answer will depend on these factors and how they apply to your unique situation. Let’s dive a little deeper to help you understand Colorado alimony a little better.

Types of Alimony in Colorado

There are two primary types of spousal maintenance in Colorado: statutory and contractual.

  1. Statutory Maintenance: This type of alimony is determined by the court based on the factors outlined in Colorado’s spousal maintenance statute. The court considers the financial resources of each spouse, their earning potential, and the duration of the marriage, among other factors.
  2. Contractual Maintenance: This type of alimony is agreed upon by both spouses outside of the court system. Contractual maintenance can be part of a marital settlement agreement, where the spouses negotiate the terms of support, including the amount, duration, and any conditions for modification. Contractual maintenance offers more flexibility and control for the spouses but is still subject to court approval to ensure fairness and compliance with Colorado law.

There are some cases where if your circumstances change, you could potentially modify your alimony agreement if there are significant and ongoing changes in circumstances. Common reasons include changes in income, financial obligations, remarriage or cohabitation, and retirement. To modify alimony, the requesting spouse must file a motion with the court, providing evidence of the change. This is allowed under statutory maintenance.

Potential Duration of Alimony

The duration of spousal maintenance in Colorado depends on the specific circumstances of each case. In general, the length of support is based on the length of the marriage, with longer marriages typically resulting in longer maintenance durations. It is also important to note – especially for the paying spouse – that alimony payments cannot be eliminated or erased through bankruptcy. Colorado law outlines advisory guidelines for maintenance duration based on the number of years the couple has been married:

  • Marriages lasting 3 years or less: 31% of the length of the marriage
  • Marriages lasting between 3 and 6 years: 46% of the length of the marriage
  • Marriages lasting between 6 and 12 years: 64% of the length of the marriage
  • Marriages lasting between 12 and 20 years: 75% of the length of the marriage
  • Marriages lasting over 20 years: The court has discretion to determine the duration on a case-by-case basis.

These guidelines are not binding, and the court may deviate from them based on the unique circumstances of each case. If you are still wondering, “How much alimony will I get?” consulting with an experienced attorney can help provide a clearer estimate based on your situation.

How Divorce Matters® Can Help with Alimony

Navigating the complexities of spousal maintenance can be challenging, especially when emotions are running high during a divorce. A knowledgeable and experienced family law attorney from Divorce Matters® can provide invaluable guidance and support throughout the process. Our experts can help you:

  • Understand your rights and obligations regarding spousal maintenance
  • Negotiate a fair and reasonable maintenance agreement
  • Ensure compliance with Colorado’s spousal maintenance laws
  • Advocate for your interests in court if a dispute arises

If you’re searching for answers to “How much alimony will I get?” Divorce Matters® can help. Not only do we have the experience you need, but we also have an app for it! This free app provides a simple and portable method for quickly estimating how much you might be expected to pay for spousal maintenance and child support in Colorado. By using this app and consulting with our experienced attorneys, you can approach your divorce with confidence and clarity. You can find it by going to the App Store (if you’re on iOS) or on the Google Play store (if you’re on Android) and searching for Divorce Matters® Colorado Spousal Maintenance and Child Support Calculator, or you can click the links on this page.

Understanding the ins and outs of spousal maintenance is essential for anyone going through a divorce in Colorado. With the guidance of a skilled attorney from Divorce Matters® and the convenience of our spousal maintenance calculator app, you can navigate this challenging process with greater ease and peace of mind. For help with alimony, contact the experts at Divorce Matters® today.

What Are My Options For Dividing The Marital Home In Divorce?

Following divorce, there are a lot of considerations to make with the family home. Who gets to keep it? What’s the easiest way to get one spouse’s name off of the mortgage so they won’t be held liable for the home in the future? Where will the departing spouse live afterward?

You have options, but some are easier than others. Here are three possible ways to deal with property division on the marital home:

  1. Often, the simplest way to split the home is for both parties to wash their hands of it entirely. Selling the home and splitting the money gives both parties equal (or at least, equitable) footing with which to begin their new lives. Additionally, this means that you will no longer have your name on a document with your ex-spouse. However, realize that there are some complications you might have to endure when selling the home. The economy can have a huge effect on whether selling the home is a worthwhile endeavor; if the housing market is down, it may make more sense to rent the property out instead. If the market is up, there are tax implications to consider for capital gains that are affected by your filing status (married couples get a bigger tax exclusion, so it might make sense to sell before the divorce).
  2. For couples that decide not to sell, it may be prudent for one party to buy out their half of the home. This is a good way to keep the home in the family (for the benefit of children, for example, or for sentimental purposes) but it may not always be financially feasible. Both parties in this situation should seek appraisals on the home ”“ it’s always best to have a second opinion before committing to something so important. If the departing party cannot afford at the time of divorce to buyout his or her half, then the couple can consider a delayed buyout, but there are some long-term headaches associated with this method (keeping both names on the mortgage post-divorce, namely) so it’s not usually recommended due to potential financial and credit ramifications.
  3. There’s always cohabitation if you and your ex-spouse split amicably. On one hand, it could be a good idea for both parents to be around for the kids; on the other hand, you just got divorced from the person who is now your housemate, with all the potential baggage this situation brings up.

How Can A Trust Protect My Adult Child’s Inheritance During Divorce?

On Monday we talked about the importance of discussing prenups with your adult children as they prepare for a wedding, especially for high-asset families. Prenups are not always the most comfortable thing to bring up with a fiancée, but they are very important tools for protecting one’s property in case of divorce. But parents with high-assets who wish to ensure that their estates transfers to the desired party (in this case, an adult child) without any hang-ups related to divorce or the lack of a prenup can rely on another tool to preserve their estates: creating a trust.

Benefits Of A Trust To Protect Inheritance In Divorce

A trust gives you much more control over your adult child’s inheritance. You decide the terms of the trust and can order the trustee to only pay out to your son or daughter in certain circumstances. Here are just a few terms you can throw into a trust to ensure that the assets go where you desire:

  • You can name a trustee other than your adult child. This makes it so that a future ex-spouse of your adult child has no claim whatsoever over the assets. You can then declare that the trustee only distribute funds to the beneficiary in a separate account that is strictly used for their inheritance and to monitor all transactions the account is used for; this helps prevent commingling of assets in joint accounts held by your adult child and their spouse (commingling can give the spouse a claim, as joint assets are generally considered marital property)
  • You can tell the trustee that assets are for specific uses in the future, such as your grandchildren’s educations or other expenses.
  • You can tell the trustee that assets are not to be distributed to your adult child without the existence of a comprehensive prenuptial agreement or postnuptial agreement that ensures that assets remain with your adult child and not their spouse.
  • You can even declare that certain assets are not to be distributed contingent upon expectations that you set forth.

If you do decide to create a trust, you must make sure that the terms of the trust leave no room for loopholes or leeway. An estate attorney can help you do just that.