THE ABILITY TO PROVIDE for your children after a divorce is an issue that weighs heavily during your divorce case. At Ferraro Law Group we have helped thousands of people get to the other side of divorce in a way that is workable; putting plans in place that make sense. We take very seriously the comfort and well-being of your children, and work tirelessly to make sure their lives remain as normal as possible. Here are three tools to help you ensure your financial stability after divorce with minor children.
- Child Support – Every case with children must involve a child support calculation. The more information available, the better off you and your children will be as you navigate your rights and responsibilities after divorce. Child support is determined with a formula which includes consideration of each parent’s income, the number of children, the number of overnights each child spends with each parent, costs of health insurance for the children and each of the parents and cost of any aftercare. The better equipped you are with the costs of daycare, summer camp, and health insurance, and the more information you can obtain about the other parent’s financial situation, the better off you will be in planning for the future. Keep in mind that child support is a moving target and can change with moderate changes in either parent’s income or in daycare or insurance. This is different than the timesharing arrangement and number of overnights the children spend with each parent which is substantially more difficult to change absent agreement.
- Rehabilitative Alimony – Often, one parent stays home to raise children while the other parent remains in the workforce to provide for the family’s financial well being. After divorce, this arrangement may no longer be tenable. Still, if one parent needs additional training and support to re-enter the workforce, and the other has the ability to pay, the Court may award rehabilitative alimony. This type of alimony is for a specific duration of time until a specific goal has been reached. For example, if the parent has been out of the workforce and is in need of an updated licensing requirement or additional education or training, the other may be ordered to pay for that licensing, education or training with the idea that the improved position in the workforce will increase the standard of living for both the parent and the child and reduce the need for more support for a longer period of time. This type of alimony is more likely as the length of the marriage increases and/or the parent’s employment opportunities become limited due to their exit from the workforce.
- QDRO (Retirement) – Often one party who has not been in the workforce is worried that if they get a divorce, they will lose their entire nest egg. In reality, all money earned during the marriage and interest thereon is a marital asset. This includes retirement assets and pensions. These assets can be divided in a divorce to allow for each spouse to receive a portion without any tax consequence. This is done through a Qualified Domestic Relations Order (QDRO). Retirement assets get split just as any other assets do, however they generally cannot be used without a tax consequence. Some parties choose to keep a pension or retirement account in tact for one party while the other party receives more of another asset to counter balance the equitable distribution. In such a case, an accountant might be a valuable member to your team, to help understand the present day value of each asset after considering any tax effect.
If you have questions about how to ensure that your divorce does not leave you financially unstable, contact us at the Ferraro Law Group for a confidential consultation.