Author Archive

Flexibility and Predictability in Your Separation Agreement

 There is a point in many of my divorce cases, whether collaborative, mediation or otherwise negotiated, at which the parties ask, “How many of these details do we need to figure out, and how many can we leave open?”   The general answer is that there are some items that need to be conclusively determined, but many that do not.  But, the more useful answer is that what you nail down in detail and what you leave open to future determination or adjustment is largely a matter of personal preference. 

Knowing Your Divorce Attorney’s Bias

Everybody has a bias. 

 

 

 

That’s not bad or wrong.  It just is.  No one can be completely objective. (Don’t believe me? Read “Thinking, Fast and Slow”!)

 

 

 

The challenge, then, is to understand the bias so that you know how to more accurately interpret information from that person.

 

 

 

Nowhere is this more important than in choosing and communicating with your divorce attorney.   Contrary to popular belief, divorce attorneys are people (at least that’s my working hypothesis).  And, as such, they have biases.  One of your jobs as a discriminating client is to figure out what that bias is, and then interpret the advice, information and counsel you get from your attorney accordingly. 

Therapist Note: Legal Issues of Trial Separations

For mental health professionals, temporary separations can be a useful therapeutic tool for stressed marriages.  But, many marriage counselors are unaware of the legal ramifications that even seemingly temporary separations can produce.  Nonetheless, there are potential legal issues involved, and mental health professionals would do well to have a very basic understanding so that they can advise clients to seek legal advice if appropriate.  This post describes the most common complications.

Passing the Retirement Buck to your Kids

If you are diligent enough to have saved for retirement, then dividing retirement assets can be one of the trickiest parts of divorce planning.  There are countless types of retirement plans, federal and state laws that apply to different kinds of plans and tax consequences that must be considered in dividing retirement accounts.

 

But, perhaps more important is the overall question of whether each spouse will be adequately provisioned in retirement. 

 

It is not uncommon for one spouse to have substantially more retirement savings than the other.  This is especially the case where one spouse has worked throughout the marriage while the other has not. 

 

In some cases the spouse with the greater retirement savings resists dividing the funds.  The most common reasoning for this is “I spent x years working my tail off to get that retirement.  I shouldn’t have to give any of it away.”  I think we can all understand why someone might feel that way.  After all, sometimes retirement savings feel like the only tangible reward that you’ve got to show for decades on the hamster wheel.

 

Nonetheless, there is at least one important fact to consider if you have kids and your spouse is low on retirement savings:  If your spouse cannot afford to support themselves in retirement, then it may well fall to your children to support them.

 

Children are not legally required to financially provide for parents.  But, many adult children feel some obligation to financially support parents who cannot provide for themselves. At the very least it can be a significant stressor to know that a parent is not financially secure, or cannot afford the care that they need.

 

You may not feel a need to ensure that your ex-spouse is financially secure in retirement.  You may or may not be legally required to do it.  But, when considering your options and what’s important to you, you may want to take a longer view of the situation.  If you and your spouse are not able to secure retirement incomes down the road, then you may simply be passing the buck to your children. 

 

Obviously, the facts of any given case will dictate whether this is an issue.  But, the point is that a decision to not provide for your or an ex-spouse’s retirement in some way can negatively impact your children.  And, that is a ripple effect of divorce that few people want to create.  

Authorization of Medical Care for Children

Parents, have you ever wondered how your child will get medical care when they are being watched by a babysitter, grandparents or other child care source?  Have you ever gone on a business trip or vacation (I know, dream on) without the kids and wanted to make sure that the person keeping your kids could get them medical care if something happened? 


 

Well, fortunately, if you live in North Carolina, then the following statute and form allow you to authorize someone else to consent to health care for your child in those situations.  It is important to note that your signature has to be notarized, so make sure you take care of that if you are going to rely on the form.  But, this form provides an easy and effective way to make sure your kids can get medical care when you are not around.  You’ll need to give a properly executed copy to the person caring for your child so that they can provide it to the doctor, hospital or other medical facility.

 

§ 32A‑34.  Statutory form authorization to consent to health care for minor.

The use of the following form in the creation of any authorization to consent to health care for minor is lawful and, when used, it shall meet the requirements and be construed in accordance with the provisions of this Article.

 

“Authorization to Consent

to Health Care for Minor.”

 

I, ____________, of ____________ County, ____________, am the custodial parent having legal custody of____________, a minor child, age______, born________, ____.  I authorize____________, an adult in whose care the minor child has been entrusted, and who resides at____________, to do any acts which may be necessary or proper to provide for the health care of the minor child, including, but not limited to, the power (i) to provide for such health care at any hospital or other institution, or the employing of any physician, dentist, nurse, or other person whose services may be needed for such health care, and (ii) to consent to and authorize any health care, including administration of anesthesia, X‑ray examination, performance of operations, and other procedures by physicians, dentists, and other medical personnel except the withholding or withdrawal of life sustaining procedures.

[Optional:  This consent shall be effective from the date of execution to and including____________,_____].

By signing here, I indicate that I have the understanding and capacity to communicate health care decisions and that I am fully informed as to the contents of this document and understand the full import of this grant of powers to the agent named herein.

 

            (SEAL)

Custodial Parent                                                                                           Date

 

STATE OF NORTH CAROLINA

 

COUNTY OF

 

On this ________ day of__________, ____,  personally appeared before me the named_________, to me known and known to me to be the person described in and who executed the foregoing instrument and he (or she) acknowledges that he (or she) executed the same and being duly sworn by me, made oath that the statements in the foregoing instrument are true.

 

 

 

Notary Public

 

My Commission Expires:

 

 

Top 10 Traps of Handling Your Own Divorce Settlement

Many people want to negotiate their separation and divorce without using an attorney.  The reasons typically revolve around saving money and/or the fear of evil attorneys creating an unnecessary fight.

I am all for people resolving their own disputes whenever possible.  But, in divorce, there are traps waiting for people who want to do it themselves.  Here is a list of 10 the most common traps:

1. Failing to account for capital gains taxes

A lot of people just divide up assets or debts without regard to this issue.  This can provide a nasty surprise if capital gains taxes reduce the value of the assets that seemed “equal” when you agreed on them.

2. Failing to structure financial terms to avoid taxes

Giving money or assets to your ex-spouse can bring on tax liability.  Withdrawing retirement funds can trigger tax liability.  Divorce situations can be excluded from some kinds of taxes, but only if handled correctly.

3. Retirement account division

Dividing these accounts is complicated.  There are federal, state and/or tax laws that must be satisfied to avoid bad surprises down the road.  Special orders from a court may be required to divide up a retirement account.  Also, planning for what happens if the owner of the retirement account dies after separation, but before the account is divided is complex, but crucial.

 4.    Small business and family business ownership

Small business and family owned businesses present special considerations for a divorcing family.  Failing to properly address these issues can lead to future problems with ownership, liability on business debts and other issues impacting the business.

 5. Planning for income changes in support obligations

I have talked to many people who tell me that they handled their own separation agreement and agreed to pay “x” dollars a month but now cannot pay it because they lost a job or took a pay cut.  This is a great way to end up in court and financial trouble.

6.      Agreeing to obligations that are not legally required

You may inadvertently agree to do things that no court could require.

 7.     Agreeing to things that are not enforceable

You may depend on your spouse’s agreement to do something only to later discover that you cannot actually require them to do it under the law of your state.

 8.     Failing to formalize your agreements properly

Creating a legally enforceable divorce settlement agreement in North Carolina is not as simple as a handshake or even a just a written signed agreement.  If it is not done correctly, your agreements may fail.

 9.      Agreeing to numbers without budgeting or planning

Too many people agree to financial arrangements without having the slightest idea of how those arrangements play out long term, or sometimes even short term.

 10.     Failing to structure spousal support for tax purposes

There are very specific tax laws and state laws that apply to spousal support payments.  Failing to structure spousal support payments appropriately can lead to surprising tax and legal ramifications years after you thought your divorce was put to bed.

 If you are facing separation or divorce, then consider consulting a qualified family law attorney before you finalize an agreement.  An ounce of prevention is often worth a pound of cure.

The Echo of Divorce

I heard the phrase “the echo of war” for the first time this week.  An expert on Chechnya was discussing the Boston Marathon bombings as a possible “echo” of the military conflict in Chechnya that began almost 20 years ago, the Iraq Wars or the war in Afghanistan.

 

That got me to thinking about the “echo of divorce”.  These military conflicts, this expert explained, created resentments, hard feelings and explosive emotions among some Muslims.  Once created, these volatile feelings were very hard to contain.  So, years after these conflicts began, we may have heard an echo of them in a most unexpected place.

 

Divorce is simply another form of conflict.  It too has an echo. 

 

And, the echo of divorce can also be heard decades after the fact and in very unexpected places.

 

The echo of divorce can be heard in your children’s emotional well-being, school performance, future romantic relationships, and adulthood.

 

It can be heard in your family life, financial future, your future romantic relationships, your emotional well-being and friendships.

 

It can be heard in your place of worship, job, school, and social circles.

 

It can be heard at holidays, birthdays, graduations, weddings, delivery rooms and custody exchanges. 

 

But, once an echo is created, it is difficult to control.  Just as no one could have foreseen the events in Boston, you will have trouble predicting when and where the echoes of your divorce will sound. 

 

The good news is that you can largely control the sound and volume of the echo of your divorce.  In my experience, noisy divorces create louder, longer more negative echoes.  Quieter divorces create lower volume, shorter and more positive echoes.

 

Determining the echo of your divorce starts with finding a divorce process that reduces anger, animosity and acrimony in favor of respectful dialogue. Diplomacy over combat. It proceeds by not wasting time on argument, but instead invests your valuable time and money in problem solving.  It finishes not by crowning the “last man standing”, but in a dignified de-merger of two whole individuals. 

 

Decide early on what kind of echo you want your divorce to have, and choose your divorce process accordingly.  Otherwise, you may be dealing with unpleasant echoes for a long time.

Bright Spots Are Key to Divorcing Well

Did you know that humans are psychologically predisposed to notice and dwell on problems instead of solutions? 


How does that play into divorce?

 

This phenomenon is explored in Switch:  How to Change Things When Change is Hard.    The Heath brothers wrote this book to give people a user-friendly paradigm for changing habits and dynamics between people and within organizations.

 

The book discusses research indicating that humans are more attuned to negative than positive experiences in almost every area that has been studied.  

 

They suggest that the best way to overcome this challenge is to look for the “bright spots”.  Bright spots are places or times when things went well.  The skill is to not focus on the times that things went poorly, but to focus on the times when things went well

 

It is, in essence, the difference between learning what to do, instead of what not to do.

 

Why would a divorce attorney care and what good would it do for you?

 

I spend a lot of time helping clients learn to change unhealthy dynamics with their spouse and sometimes even their kids.  We have to help them resolve issues that have likely been causing argument for years, and may have even led to the divorce itself:  Parenting differences, money differences, communication problems, etc…

 

But, even in really difficult cases, the spouses are able to have calm, respectful, productive conversations about something.  Those conversations are the bright spots for families in a divorce.

 

So, the key is to look at those good conversations and figure out what goes right in them.   Then, we can try to duplicate the things that make those conversations go well. 

 

All too often, attorneys and clients focus on the problems.  In my experience, that doesn’t get you very far.

 

It’s the focus on what’s working (no matter how small or how hard you have to look) that really helps. 

 

If you are facing a divorce, and conflict between you and your spouse is a problem, then try to find a bright spot.  Find a conversation or topic that you don’t fight about. Figure out why that conversation went well.  Then try to duplicate that in your next difficult conversation. 

 

In divorce, finding the bright spots will help pull you toward the positive changes that you both want to see in your lives.  

Can I Be Common Law Married in North Carolina?

Well, that is a fine question.  The answer is both yes and no.  (In law school, you learn to literally speak out of both sides of your mouth at the same time.  Usually, it is a third year course. That’s a joke. Sort of.) 

 

First, it is important to understand what is meant by the term “common law marriage”.  Common law marriage is simply stated a state government recognizing a couple as married after they have lived as though they were husband and wife for some period of time.  It is different than a traditional marriage in that it does not require the licensing and ceremonies typically required to get married under the law.

 

North Carolina does not recognize couples as being married under a common law marriage theory.  So, if you live in North Carolina, then no matter how long you live like a husband and wife, without a marriage license and ceremony, you will not be considered married by North Carolina.

 

But, there is a big loophole to this rule.  Other states do recognize common law marriage.  And, North Carolina does recognize common law marriages created in other states.

 

This issue was recently discussed again by the North Carolina Court of Appeals.  The Court of Appeals reaffirmed that while a common law marriage could not be created in North Carolina, this state would recognize a common law marriage created in a state where common law marriage is legal.

 

So, if you lived in a state that recognizes common law marriage and met the common law marriage requirements of that state, and then moved to North Carolina, then this state should recognize you as married.   

 

If there is a dispute as to whether you are common law married under the laws of another state, the North Carolina court has to apply the laws of that state to determine if you are considered married in this state.  For instance, in the most recent Court of Appeals opinion on this topic, the North Carolina court had to apply the law of Texas to determine whether the couple qualified as common law married under Texas’s rules before they moved to North Carolina.

 

So, why does this matter?  If your common law marriage from another state is found to be valid, then you can be divorced in North Carolina and you can utilize the laws regarding equitable distribution and spousal support. But, this state’s divorce, equitable distribution and spousal support laws do not apply if a common law marriage was not valid in another state.  

If you have questions about whether you can be considered married under the law of another state, consult a family law attorney in North Carolina, or in the other state, to get more information.  

The Truth About Pre-Nups

The recent New York case striking down a pre-nuptial (aka “pre-marital” or “pre-nup”) agreement may scare some people who have signed or are thinking of creating pre-nups in North Carolina.

 

So, let’s get the facts out there before this story causes pandelerium (I know that is not really a word, but Jeff Foxworthy made it up and I like it):

 

North Carolina allows pre-nups and has adopted laws to specifically deal with pre-nups (NCGS 52B for the curious and/or nerdy).  In this state, a pre-nup must be written and signed by both parties. 

 

A pre-nup can deal with a wide range of legal issues in the event of divorce.  However, there are some important limits to what it can control.  A pre-nup cannot control child support in a divorce, cannot control property held as Tenants by the Entirety and cannot control a spouse’s rights in certain kinds of retirement plans. 

 

A pre-nup cannot contain provisions that are contrary to the public policy of this state.  For instance, a pre-nup probably cannot contain terms by which a couple agrees to get divorced at a date or event in the future because North Carolina’s public policy is to support marriage, and discourage divorce.

 

Pre-nups are enforceable in North Carolina.  So, it is generally difficult to get out from under a pre-nup’s terms when you get divorced.  To get out of a pre-nup, a spouse has to show that either they did not execute the agreement voluntarily (more than “I had my reservations…”), or a that the agreement is extremely unfair (not just a little) and that the other spouse failed to disclose something important in negotiating the pre-nup.  It is important to note that if everything was disclosed prior to signing the pre-nup, then it likely does not matter how unfair the pre-nup may be.  It will still be enforced. 

 

It is important for both parties to understand the uses and limitations of a pre-nup prior to signing the agreement.  If spouses understand them well going in, then they are much less likely to experience surprises like the one chronicled in the Today Show story. 

 

If you are interested in pre-nups or post-martial agreements (for people who are married and want to stay married but want to make decisions in advance about what would happen if they divorce), then Collaborative Divorce is an ideally suited process for arriving at your agreement without damaging the relationship.