Marilyn B. Chinitz and Lois J. Liberman
Your client never entered into a prenuptial agreement and when there was a crisis impacting his marriage, he was unsuccessful in broaching the issue of a postnuptial agreement with his spouse. After years of frustration and riding the roller coaster of emotion, he’s finally ready to end his marriage and to ask his spouse for a divorce.
Before your client moves forward and announce his intentions, you should first take steps to arm him with necessary information (both financial and custodial related) to ensure that he’s in a position of strength when negotiating the finality of his marriage. Here are seven recommendations you should make:
1. Get Good Counsel
An essential step in this journey is to have an attorney who knows the law, has experience dealing with these sensitive matters and, most importantly, with whom your client feels comfortable. Whether your client’s been married for a year or twenty years, he must find an advocate who can help him make very important decisions not only impacting himself but also his children, someone who has the ability and temperament to negotiate a settlement and the skills to navigate through the court system, if necessary. Even if you think that your client and his spouse have resolved all of the necessary issues amongst themselves, he may have rights of which he may not be aware. Educate your client with more than one consultation both to get opinions regarding his rights and remedies and to see the attorneys’ different approaches to the issues to ensure that they’re a good fit for your client.
2. Do Your Financial Homework
What you need to piece together is what assets and liabilities were acquired by your client and his spouse during the course of the marriage. What sources of income do family live on? What are the family’s monthly expenses? Look for such documents in the household, such as tax returns, financial statements, bank and brokerage statements, mortgage statements, closing binders, credit card statements, insurance policies and estate planning documents, then copy, copy, copy these important papers.
3. Identify Valuables
Over the course of a marriage, your client may have accumulated important pieces of jewelry, paintings, antiques, rugs, furniture and collectibles. Make a list of such property and make videotapes of what’s located in the residence(s). Locate bills of sale and other evidence of purchases not only for proof of their existence and value but also for potential capital gains if such items are sold. Insurance riders are also helpful in this endeavor.
4. Claims of Separate Property
Separate Property is property that your client came into the marriage with, which was inherited by your client, distributed to your client through a trust or gifted to him (except gifts between spouses, which are marital property). Try to make a list of the items that would qualify as your client’s separate property in order to prevent his spouse from making a claim against such property.
5. What Type of Access Does Your Client (Or His Spouse) Have to Funds
It’s important to have access to funds, whether to hire an attorney or to ensure that your client has a safety net if the spigot of support gets turned off by an angry spouse. If your client has access to a joint account, transfer one-half of the value of the account to one titled solely in your client’s name to ensure that your client isn’t vulnerable to economic pressures. Moreover, if your client is the monied spouse, you want to ensure that your client’s spouse doesn’t attempt to transfer all of the funds that are in joint names into their own name to prevent your client access to funds to pay bills.
6. Speak to a Child Therapist (if there are children involved)
It’s essential to get the advice of a child psychologist regarding how your client and his spouse should tell the children about the divorce and obtain ideas as to how parental access should be shared based on the ages and issues facing your client’s children.
7. Same-Sex Marriage Considerations
Same-sex married couples may find themselves in a vulnerable situation if the parties were in a long-term relationship but were only married a short time. Without a prenuptial or postnuptial agreement expanding the definition of marital property or support obligations, they’ll be constrained to what the law provides both for equitable distribution and support in that short-term marriage. The Court may, under such circumstances and, as a matter of equity, compensate the non-titled spouse by providing a greater distribution of .
“Seven Ways to Help Your Client Prepare for a Divorce,” by Marilyn Chinitz and Lois Liberman was published inWealthManagement.com on September 14, 2015. Reprinted with permission. To view the article online, please click here.